The Ministry of Energy and Mineral Resources (ESDM) is set to increase investment in the upstream oil and gas sector by simplifying the permitting process.
“Currently, we have about 300 permits, which is excessive. We will streamline and cut these down,” ESDM minister Bahlil Lahadalia told the Detikcom Leaders Forum on Wednesday, September 11, 2024.
In addition to cutting red tape, the government will engage in discussions with contractors to address ongoing challenges in the sector.
“We will provide substantial support or incentives that the government can offer to attract investors,” Bahlil added.
The Upstream Oil and Gas Regulatory Task Force (SKK Migas) reported that upstream oil and gas investments in the first half of 2024 reached US$5.6 billion (Rp86.3 trillion). This figure represents about 75 percent of the government’s target for the first half of the year.
“We expect total investments to reach US$15.7 billion by the end of this year,” SKK Migas Chief Dwi Soetjipto said on July 19, 2024.
The investment target for the first half of 2024 was set at US$7.43 billion, with an annual target of US$17.7 billion.
Despite falling short of mid-year goals, Dwi remains optimistic that this year’s realization will exceed 2023’s performance.
“We expect a 15percent increase in investment in 2024 compared to 2023, a higher growth rate than the global investment increase, which is around 5 percent,” he noted.
In 2023, the oil and gas sector investment reached US$13.7 billion, which fell short of the target due to challenges in developing drilling wells.
However, Dwi anticipates better performance in 2025, with an investment target of US$15.7 billion, aligned with the government’s long-term goals.
