IPA: Strengthening Upstream Oil and Gas Crucial to Face Geopolitical Challenges

The Indonesian Petroleum Association (IPA) considers strengthening the national upstream oil and gas sector vital for Indonesia in addressing various challenges arising from the current global geopolitical situation. IPA Executive Director Marjolijn Wajong stated during a press conference in Jakarta on Tuesday that the war in the Middle East not only impacts the increasingly fluctuating prices of energy commodities but also poses new challenges for Indonesia in achieving its national energy security mission. “The current global situation shows that the energy supply chain is highly vulnerable to geopolitical turmoil. Indonesia needs to anticipate this by strengthening domestic production to avoid over-reliance on imports,” said Marjolijn. This, she continued, has the potential to create risks to the national energy supply, especially since Indonesia still depends on energy imports to meet domestic needs. Marjolijn assessed that this condition necessitates collaboration between the government and industry players to strengthen national energy resilience through increased production and accelerated exploration in the upstream oil and gas sector. She added that the current global geopolitical dynamics should serve as a momentum for Indonesia to enhance national energy resilience through boosting domestic oil and gas production. According to her, Indonesia still has significant opportunities to increase national oil and gas production. “More than 50 percent of Indonesia’s oil and gas basins remain unexplored, although most are located in eastern Indonesia and deep seas that require high technology and substantial investment,” said Marjolijn. She noted that the current challenges in the upstream oil and gas industry lie not only in technical aspects but also in the need for investment and the high risks of exploration. Therefore, she added, consistent government policies, legal certainty, accelerated permitting, and competitive fiscal schemes are the main keys to attracting investors. “The discovery of new reserves is key. Relying solely on existing projects is insufficient. Aggressive exploration and close collaboration between the government and industry players are required,” said Marjolijn.