Government will never abandon upstream oil, gas industry: Minister

Government will never abandon upstream oil, gas industry: Minister

Pertamina's oil wells off Balikpapan coast in East Kalimantan ANTARA/Novi Abdi/aa.

The upstream oil and gas industry will not spontaneously be abandoned because this industry is one of the pillars of the Indonesian economy.
Badung, Bali (ANTARA) - The Indonesian government will never abandon the upstream oil and gas industry despite a global trend in renewable energy development,” Energy and Mineral Resources Minister Arifin Tasrif stated.

“The upstream oil and gas industry will not spontaneously be abandoned because this industry is one of the pillars of the Indonesian economy," the minister remarked at the International Convention on Indonesian Upstream Oil and Gas (IOG) 2021 in Bali on Monday.

As one of the supporters of low carbon emissions, Indonesia remains committed to achieving carbon neutrality in 2060 or earlier and is seeking to intensify the development and use of renewable energy, he noted.

During the energy transition period, several issues must be taken into account, including the reliability of new and renewable energy that necessitates the use of technology to maintain intermittency, he stated.

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The low carbon upstream oil and gas industry is expected to play its role during the energy transition, according to the minister.

Tasrif noted that the low carbon upstream oil and gas industry constitutes the vision of the fossil-based industry in energy transition in the future.

The upstream oil and gas industry has a double impact that was felt in the supporting sectors, he noted.

“I observe that the use of national capacity in the upstream oil and gas sector is quite large, in terms of both percentage and value. For instance, the use of national capacity had reached 57 percent, with the procurement value touching an estimated US$2.54 billion,” he stated.


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According to the results of a study conducted by the University of Indonesia (UI) on the impact of upstream oil and gas businesses in the 2003-2017 period, the multiplier effect of the upstream oil and gas industry had continued to increase.

The upstream oil and gas industry, which was initially designed to offer maximum contribution to state revenue, had emerged as one of the drivers of supporting activities, such as banking and hotel industries.

Minister Tasrif remarked that any single US dollar investment contributes US$1.6 to supporting industries.


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In addition, the upstream oil and gas industry, particularly natural gas, will support energy transition in the country, he stated.

The government is seeking to develop gas as a substitute for coal that produces more carbon and significantly increase natural gas consumption in the future, he remarked.

“Oil and gas fields need to be developed. The existing potentials must be explored to ensure energy supplies in future. Likewise, the potentials of non-conventional oil and gas fields must also be explored in order to meet gas requirements in future,” he stated.


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