Pertamina CEO Presents Strategic Recommendations for Revised Oil and Gas Law

Strengthening Upstream Regulations and Investment

PT Pertamina (Persero) CEO Simon Aloysius Mantiri addressed DPR Commission VII regarding the revision of the Oil and Gas Law (RUU Migas), presenting four critical recommendations to enhance Indonesia's oil and gas sector. The proposals aim to address current challenges in the energy sector, particularly the growing gap between energy consumption and production.

Key Recommendations for RUU Migas

1. Institutional Strengthening in Upstream Oil and Gas: The first recommendation focuses on establishing a state-owned enterprise (BUMN) for managing oil and gas resources through cooperation contracts, as suggested by the Constitutional Court.
2. Comprehensive Planning Framework: The proposed National Oil and Gas Master Plan (RUMGN) and Oil and Gas Master Plan (RUMG) would provide a legal umbrella for investment in the sector, similar to the Electricity Supply Business Plan (RUPTL) in the power sector.
3. Fiscal and Tax Certainty: Pertamina suggests adjusting fiscal and tax policies to suit specific project economics, particularly for deep water, enhanced oil recovery, non-conventional resources, and mature fields, as well as initiatives for decarbonization and refining.
4. Establishment of Petroleum Fund: The proposed Petroleum Fund, to be managed by state-owned oil and gas enterprises, would support various activities such as exploration, infrastructure development, and decarbonization efforts.

Addressing Indonesia's Energy Challenges

Simon emphasized that Indonesia faces a growing disparity between energy consumption and production. While energy demand continues to rise, domestic oil and gas production has been declining, leading to increased reliance on imports. He stressed that without robust regulatory support, investment attractiveness in the upstream sector will continue to weaken, jeopardizing national energy security.

The proposed revisions to the Oil and Gas Law are seen as a strategic solution to address these challenges by creating a more conducive investment climate and ensuring the long-term sustainability of Indonesia's energy sector. The recommendations put forth by Pertamina reflect a comprehensive approach to balancing economic, security, and environmental considerations in the energy transition.