Jakarta, Portonews.com - The loss of production at the Sengkang CA since September 12 2022 will have a negative impact on efforts to achieve the gas lifting (channeling) target in the 2022 State Budget and loss of state revenue. Until now, there is no certainty when the gas of 40 million cubic feet per day (MMSCFD) will be reused to meet the needs of the electricity sector in South Sulawesi, especially Wajo Regency where the Sengkang WK operates.
Prior to the end of September 2022, most of the Sengkang CA production was allocated and channeled for electricity in the South Sulawesi region after being deducted by gas supplies for household jargas in Wajo Regency. At this time, gas production from the Field cannot be distributed for electricity because there is a disagreement between PLN and the independent power producer (IPP), in this case PT Energy Sengkang.
"The impact of not channeling gas production at the Sengkang CA not only results in potential gas production being restrained, but also that the state no longer receives revenue from the sale of gas. More than that, we are worried that the Government's hard work to encourage increased investment in upstream oil and gas will be constrained," said SKK Migas Deputy for Finance and Commercialization Kurnia Chairi in Jakarta, Monday (19/12/2022).
Kurnia added that the Government's policy that favors the electricity sector with low gas prices should be used as well as possible to support the provision of relatively clean energy in order to improve the Indonesian economy in the current energy transition era.
SKK Migas and Cooperation Contract Contractors (KKKS) fully support the Government's policy to prioritize gas to meet domestic needs. Therefore, we hope that buyers, including PLN, will implement the policies set by the Government. "In the midst of high world gas prices and supply constraints due to the Russia-Ukraine war, actually selling gas on the international market is very profitable and provides foreign exchange for the country. However, we emphasize that SKK Migas and PSC Contractors fully support the Government's policy to prioritize domestic gas production. We hope that other parties, particularly gas buyers, will realize their commitments and participate in implementing government policies," said Kurnia.
SKK Migas requests the parties to the dispute to immediately resolve the problem so that gas from the Sengkang WK can be immediately channeled and resold in order to meet the lifting target and optimize state revenue and maintain a conducive upstream oil and gas investment climate.
"The need for oil and gas in the future will be greater as stipulated in the National Energy General Plan (RUEN). SKK Migas and PSC Contractors have formulated a plan and strategy for Indonesia Oil and Gas 4.0 in order to be able to support the supply of oil and gas energy which continues to increase with a target in 2030 of oil production reaching 1 million barrels per day (BOPD) and 12 billion cubic feet of gas per day (BSCFD) , with an investment requirement of around US$ 179 billion until 2030," explained Kurnia.
"We all don't want that in the future, because the lack of investor confidence has resulted in sub-optimal investment targets for the upstream oil and gas industry, as a result, amid the increasing demand for oil and gas, national oil and gas production is unable to fulfill it. As a result, the country has to import and of course burden the current account deficit," concluded Kurnia.
