President Joko “Jokowi” Widodo has called for an urgent increase in the country’s oil lifting amidst concerns over declining domestic production.
He emphasized that the recent downward trend in oil lifting, also known as volume of oil transported, is placing financial strain on the nation as it leads to higher petroleum imports, depleting foreign exchange reserves.
Addressing the 79th Anniversary of Mining and Energy in Jakarta on Thursday, October 10, 2024, Jokowi stressed the importance of reversing the current decline in oil output.
He urged state-owned enterprises like energy company PT Pertamina to collaborate with private or even foreign oil and gas companies to boost production and reduce reliance on imports.
“I ask that oil lifting must increase, in any way possible. If we don’t address this, the state will lose a lot. Even a small drop of 50 or 100 barrels can lead to trillions of rupiah lost in foreign exchange due to higher imports,” Jokowi said.
To achieve this, Jokowi highlighted the need for regulatory reforms that would streamline the process and make it easier for investors to engage in the oil and gas sector.
He pointed out that simplifying bureaucracy and improving regulatory efficiency are key to enhancing Indonesia’s competitiveness on the global stage.
“Without simplifying permits and regulations, it will be difficult for us to compete with other countries. A streamlined process will also create jobs and bring much-needed investment,” he added.
The Upstream Oil and Gas Regulatory Task Force (SKK Migas) had already forecasted this year’s decline in oil lifting.
Dwi Soetjipto, SKK Migas head, announced in July that by the end of 2024, oil lifting is expected to reach only 595,000 barrels per day (bpd), which is 94 percent of the government’s target of 635,000 bpd.
Similarly, the country’s gas lifting is also projected to fall short, reaching only 5,554 million standard cubic feet per day (mmscfd), compared to the target of 5,785 mmscfd.
This underperformance has been attributed to operational delays at drilling sites, which have hindered production efforts.
Jokowi’s call for increased oil lifting comes at a critical time as Indonesia faces the challenge of balancing domestic energy needs with economic stability.
By improving collaboration, reforming regulations, and accelerating investments in the oil and gas sector, the government aims to mitigate further losses and secure the country’s energy future.
