Reinstating Oil and Gas as Driver for Economic Growth: A Call to Action to Reform the Industry

Reinstating Oil and Gas as Driver for Economic Growth: A Call to Action to Reform the Industry

JAKARTA, 19 May 2017 – The Government emphasized its commitment in providing the much needed support to all business players in the oil and gas industry to attract investment in order to boost exploration production activity.

Speaking at the closing ceremony of the 41st Indonesian Petroleum Association (IPA) Convention and Exhibition today, the Vice Minister of Energy and Mineral Resources (ESDM) of Indonesia, Arcandra Tahar, said that government will listen to input from industry and is open for further dialog to create a positive impact on increasing the level of investment.

Christina Verchere, President of IPA, said: “The IPA Convex is just a starting point. There have been exchanges of good ideas and examples of best practices from other countries. We need to continue by working together with government to execute policy reform that is beneficial for both government and investors.” In addition, Christina recommends to approach it in a comprehensive manner.

“The Minister is committed to streamlining the bureaucracy by reducing permits. But, the industry needs to deliver the government’s target, and by being efficient,” said Vice Minister, Arcandra.

One aspect of the industry which can not be overlooked was the value of human capital. The Special Session highlighted that the industry was proud to be staffed by around 90-95% Indonesians, but extensive job losses may occur if investment continues to decline. There is a real threat of skills shortage and loss of technical expertise and it is important that government and the upstream sector work together on a long-term human resource strategy. Industry associations also need to collaborate to maintain the high level of Indonesian expertise within the country. The Plenary sessions and associated discussions highlighted the need for new reforms to re-attract investment and it was agreed by all participants that government and industry must continue to work together to make Indonesia globally competitive during this extended period of low oil prices.

During the closing, the Director General of Oil and Gas also announced the Oil and Gas Bidding First Round 2017. 

The Convex brings together key stakeholders in upstream oil and gas industry, including policy makers, regulators and other government agencies, investors and service sectors to drive and reform more investment to the country.   “The IPA would like to once again thank all the contributors and attendees for the active participation that made the 41st IPA Annual Convention and Exhibition a success. We plan to make every effort to provide an outstanding event for the 42nd IPA Convention and Exhibition,” she said.

In his speech, Michael Putra, Chairman of this year’s IPA Convex stated that he is pleased with the outcome of this year, total visitors were close to 20,000 people. “The number was the lowest in the past five years reflecting the current industry condition, nevertheless we are proud to announce that close to 1,000 young Indonesian talents took part in various technical and business competitions as part of the IPA Convex. They are some of Indonesia’s best talents. Part of the reason we have to re-attract investment is actually for their future,” said Michael. This year, the event was also covered by 450 journalists from print and online media, radio as well as broadcast stations.