After a series of discussions involving the IPA and relevant stakeholders, the Government of Indonesia issued the MR 52/2017 as the improvement on the MR 8/2017. Two significant things changed as is found in MR 52/2017, namely: changes of progressive and variables split, and the opening of incentive limits which the Minister can provide to maintain the economic level of a working area.
Another achievement that is considered significant by the IPA in 2017 is the issuance of GR No. 27 Year 2017 which is a change from the GR 79/2010. Compared to the GR 79/2010, this new regulation does provide some improvements especially for contracts after 2010. But such improvements are not as attractive as the Assume and Discharge principle as for contracts pre-2010.
In addition to being involved in the drafting of regulations, the IPA has also recorded success at the 41st IPA Convention and Exhibition held on 17-19 May 2017, at the Jakarta Convention Center. As part of the event, the IPA also published a series of infographics describing the current condition of the upstream oil and gas industry in Indonesia.
Finally, the 46th Annual General Meeting also introduced the IPA Supervisory Board and the Board of Directors for 2018. The structure of the IPA Supervisory Board and the Board of Directors is shown below:
Evita Herawati Legowo
President - Ronald Gunawan, MEDCO ENERGI INTERNATIONAL, TBK, PT
Vice President - Dan L. Wieczynzki, EXXONMOBIL CEPU LTD.
Vice President - Bijan Agarwal, CONOCOPHILLIPS (GRISSIK) LTD.
Secretary - Christina Verchere, BP INDONESIA
Treasurer - Tumbur Parlindungan, SAKA INDONESIA PANGKAH LIMITED
Director - I.Tenny Wibowo, SANTOS (SAMPANG) PTY. LTD.
Director - Nico Muhyiddin, INPEX CORPORATION
Director - Fabrizio Trilli, ENI INDONESIA
Director - Arividya Noviyanto, TOTAL E&P INDONESIE
Director - Gunung Sardjono Hadi, PERTAMINA (PERSERO) PT – PHE
Director - Charles A. Taylor, CHEVRON INDONESIA
Director - Kevin S. Moore, HUSKY ANUGERAH LTD.
Director - Moh. Zaini MD Noor, PETRONAS CARIGALI INDONESIA OPERATION
Please save the date for the above agenda and we look forward to seeing all the IPA Company and Associate Members at the meeting. (*)
As informed by the committee, the Asia Pacific Oil & Gas Conference and Exhibition (APOGCE) 2017 will be moved Jakarta, Indonesia, due to the recent developments in Bali with regards to the imminent threat of the Mount Agung volcano eruption. This decision was made by the SPE and IATMI which been monitoring and assessing these critical developments in Bali. The event will remain take place on the original dates, namely 17 - 19 October 2017.
The Ethics & Compliance Committee (ECC) of The Indonesian Petroleum Association (IPA) held its first meeting, on 20 September 2017 in Jakarta. The meeting appointed Mr Ronny Siahaan (MedcoEnergi) and Krishna Ismaputra (ENI Indonesia) as the new chairman and vice chairman of the committee. The committee, which was known before as the Compliance Knowledge Exchange Forum (CKEF), merged and became an IPA committee in the 3rd quarter of 2017 and changed its name to the Ethics & Compliance Committee
First of all, on behalf of the Indonesian Petroleum Association, we would like to thank you for your contribution at the 41ST IPA Convention & Exhibition held on 17 - 19 May 2017, which attracted 20,000 visitors and 114 companies/institutions during the three-day event.
Despite the current oil and gas industry's condition in which most companies are looking ways to control costs and apply efficiency, we highly appreciate your participation in this event to show that the industry remain resilient and we hope that your presence within the event was successful in showcasing your company and that everyone involved has benefitted well from the valuable exposure to the oil and gas world.
As part of the IPA Exhibition, we have always had the Best Booth Contest From year to year. Improvements in judging criteria have been made for a couple of years. For the past two years, we have divided into awards for booth content and booth design, whereas this year, in particular, we had six independent judges from each category.
Judges for Best Booth Design :
The special session commenced with an overview of the talent base in Indonesia, noting that 95% of positions in the industry were filled by Indonesians. This positive situation has happened over several decades, involving the intake of graduates, training and in many cases filling of strategic positions in upstream companies by nationals. It was noted that in the period of decline that was occurring, efficiencies are key, and this applies to people as well. Activities are, however, declining and this has led to significant layoffs of staff, particularly amongst upstream project teams. This has been inevitable, despite the best efforts of the industry.
The 2nd session was opened by Mariatul Aini from the Ministry of Finance, who stressed that if the country wants to attract investment, infrastructure is key and the Ministry is making efforts to fund and develop infrastructure around the country, particularly in remote areas, so that the oil and gas industry can utilize these facilities in the search for more reserves. The Ministry is also pushing to simplify bureaucracy and regulations to encourage investment. She also stressed that the economic indicators in the country are good at present, with inflation at 3-4% per annum and the ease of business index showing Indonesia jumping 15 places to 91 out of 170 countries worldwide.
The session was opened by highlighting that it was known that reforms are required and that the Gross Split scheme has been introduced to re-attract investment but that it remained to be seen if contractors would respond positively.
The focus discussion session examined the ways in which energy reform in Mexico has succeeded in attracting USD 70 Billion in new investment into the energy sector in Mexico since the reforms were introduced in 2013. This occurred as a result of a move from a nationalistic, inclusive business environment to a more open, market-oriented oil and gas sector. Nicole Palau outlined in her presentation how energy reformation had included not just the oil and gas sector but the entire energy value chain, from government to operators, investors and service companies. Since reform in 2013, 46 companies had invested in Mexico as opposed to the previous structure where two state owned enterprises were doing everything relating to hydrocarbons and electricity, including Pemex. This period of reform has been carried out to change the paradigm and focus on the benefits for Mexico in the long term, to improve energy security and create a long-term vision for the industry in Mexico.