Oil and gas giant Chevron-Shell withdraws from RI, this is the culprit

Jakarta, CNBC Indonesia – A number of global oil and gas companies, starting with Chevron, Shell and ConocoPhillips, have declared their exit from upstream oil and gas projects in Indonesia.

Chevron Indonesia Company (CICO), for example, decided to leave the Indonesia Deep Water Development (IDD) gas project in East Kalimantan, then Shell decided to leave the Abadi Field gas project, the Masela Block in Maluku, and ConocoPhillips has exited the Grissik Field gas project, Corridor Block, South Sumatra.

So, what prompted this world-class oil and gas company to leave the country’s upstream oil and gas projects?

PKS Fraction Commission VII DPR RI member Mulyanto assessed that the lack of legal certainty in Indonesia’s upstream oil and gas sector was one of the reasons for the abandonment of this major global oil and gas company.

Indeed, Indonesia needs these investors to boost domestic oil and gas production.

“Amidst these conditions, there is legal uncertainty, which has led to the departure of oil companies such as Total, Chevron, ConocoPhillips and Shell into the Masela bloc,” Mulyanto said at the VII DPR RI Hearing Meeting (RDP) Commission meeting with SKK Migas, Wednesday (16/11/2022).

This condition actually occurred because the discussions on the revision of law no. 22 of 2001 regarding Oil and Gas (Migas). Therefore, he also encouraged the seriousness of the government in the immediate impetus of the discussion on the revision of the oil and gas law.

“Especially encouraging the seriousness of the government, don’t let it be like the EBT bill again, there is no DIM. We prepared it without DIM, how about it, the goods are fake so they can’t be discussed,” he said .

Mulyanto also hopes that the revision of the oil and gas law can be completed soon. In particular, to strengthen the legal legitimacy of SKK Migas which is currently only temporary.

“We need to change the oil and gas law, form an ideal institution in the middle of the twilight of the oil and gas industry. This is what we need to handle properly. I am afraid Andaman will repeat the Abadi Masela case due to legal uncertainty “, he said.

As is known, the incomplete discussion on the revision of the oil and gas (oil and gas) law is considered one of the factors of the unattractive investment climate in the oil and gas sector in RI, especially for oil companies and of global gases.

Upstream oil and gas industry professional Tumbur Parlindungan also encourages the government to complete the revision of the oil and gas law immediately. The reason is that investors will continue to hold onto their investments until RI has permanent legal power.

“More and more confirmed. Uncertainty even getting bigger. Investors wait and see. Options there are investors, they want to invest in Indonesia (with everything uncertainty) or to other countries Certainhe told CNBC Indonesia on Thursday (3/11/2022).

Furthermore, Indonesia’s upstream oil and gas investment ecosystem is no longer as attractive as that of other countries. For example, such as Malaysia, Brunei and several ASEAN countries.

“Perhaps they give more priority to these countries, which are still many International oil and gas company invest,” he said.

[Gambas:Video CNBC]