The event functioned as an icebreaker between government and the private sector, gathering top-level executives from across Indonesiaâ€™s oil and gas value chain. Representatives from BP, Pertamina, Statoil, ConocoPhillips, Medco, Vico, Ophir, Chevron, Petronas, Mandiri Oil, Talisman, Baker Hughes-GE, Schulmberger, among many others, joined a comprehensive discussion on the oil and gas investment climate in Indonesia and increasing attractiveness in local and international markets.
The panel of speakers comprised Deputy Minister of Energy and Mineral Resources, Mr. Arcandra Tahar, International Petroleum Association President, Mrs.Christina Verchere, Bimasena Energy Executive Team, Mr. Ari Soemarno, World Bank representative, Mr. Nathaniel Adams, ConocoPhillips President Director, Bijan Agarwal, SKK Migas Vice Chairman, Mr. Sukondo, Ministry of Finance representative, Mr. Suryo Utomo and Medco Energi COO, Mr. Ronald Gunawan.
One of the main subjects of the ceremony discussion was the gross split scheme, now gaining momentum after its revision. The Industry positively received the changes and efforts to improve the competitiveness of the Indonesian upstream sector.â€œWhen we apply consistent assumptions regarding ICP, field profile and tax treatment, our preliminary modeling suggests that investor IRR and NPV under Gross Split is likely to be no worse than under Cost Recovery â€“ and in some cases may be marginally higher,â€ stated Nathaniel Adams from the World Bank.
However, while it is extremely reassuring that the Indonesian government has revisited the terms of the gross split PSC, there is still great expectation by the industryregarding which specific tax terms the Ministry of Finance will apply to it. "We hope that when the oil and gas auction closes on November 20th, the PP-related Gross Split tax has been completed",commented the Deputy Minister, adding "Based on recent communication with the Ministry of Finance, it is still in process and we believe the results and timelines will be as expected."
The participation of governmental bodies in the discussion signals a welcome willingness to listen specific concerns raised by the upstream industry. At the end of the dialogue, Mr.Tahar insisted, "In the future, I hope that all parties are part of the solution, not part of the problem, I believe that by listening everything can be clarified and resolved. I am also trying to listen more than speak".
Its eminency Professor Dr. Subroto closed the ceremony inviting the parties, government and private sector, to always find channels of dialogue and to work together to find win-win solutions to the oil and gas challenges that the country is facing. The professor also expressed that by working together we will ultimately benefit the people of Indonesia by ensuring future energy security in the country and this should be everyoneâ€™s mission.â€œThe important thing that we learned from today is that problems are there and they have to be solved finding win-win solutions. The openness of the discussion from Pak Arcandra representing the government shows that they are ready to listen from the suggestions provided by the industry. There is also a clear willingness from the industry and the government to sit together and improve the communication channels,â€ Professor Subrotoâ€™s stated in his closing remarks.
About The Oil & Gas Year
The Oil & Gas Year (TOGY) provides business intelligence, strategic communication and networking opportunities to the international energy industry. TOGY sends teams of researchers to more than 35 territories in the Americas, Asia, Africa, and the Middle East to conduct exclusive face-to-face interviews with the global oil and gas elite.
Javier N Blassiotto
The Oil & Gas Year