Upstream Oil and Gas Industry Efforts to Reach 1 Million BOPD & 12 BSCFD: New Vision of Governing the Ungovernable

The downward trend in production that occurs from year to year is inseparable from the condition of the production field, which generally has entered the mature phase. Current condition is in line with the decreasing number of oil and gas working areas. 

Based on data from SKK Migas Annual Report in 2019, the number of oil and gas working areas has decreased since 2013. 

There were 199 working areas that was recorded in 2019, a decrease from the previous year of 216 working areas. Taking into account this downward trend, efforts to increase production are urgently needed, especially since production from the fields in the working area currently has the potential to decline due to the relatively mature field and also massive efforts in alternative energy industries development.

Reflecting on these various evaluations, new vision is needed for the upstream oil and gas industry in Indonesia. The production target of 1 million BOPD  and 12 BSCFD by 2030 is the vision launched by Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi to increase the number of domestic production. 

Judging from the potential of oil and gas reserves, Indonesia still has a lot of potential which can support the achievement of this vision. The number of 128 basins in Indonesia, of which 20 are producing basins while 68 basins have not been explored, is evidence that Indonesia still has the opportunity to get production gains. 

The addition of the number of oil and gas working areas can be another effort to change this downward trend. The change in the status of the working area from the exploration stage to the exploitation stage is a solution that also can be chosen to increase domestic oil and gas production.

So what first needs to be done to support the achievement of this target? Governing the ungovernable is the key. Seen from the domestic context, as a developing country that still relies heavily on fossil-based fuels especially petroleum, Indonesia needs to improve systems and policies to address the challenges faced by the upstream oil and gas industry today. 

According to the explanation of Dwi Soetjipto, Head of Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi, it is known that the oil and gas industry is currently facing the challenge of complicated licensing and overlapping central and regional regulations which can certainly make difficulties for field development in certain areas. 

It is no stranger that the management of oil and gas fields for production is sometimes constrained by obstacles in the area of operation, such as land acquisition constraints which can further slowdown the oil and gas monetization process. 

Legal certainty and flexibility in the fiscal system are needed to further facilitate the development of operations and production in existing oil and gas fields. 

One other thing to be concerned, especially in the development of the current digital era, is related to the availability of data. Improving the availability of data is still a big homework for Indonesian government. The role of data accuracy is quite important in decision making, not least in the oil and gas industry.