Abstract
Under the existing regulation in Constitution Number 22 Year 2001 (UU No 22 Tahun 2001), Production Sharing Contract (PSC) continues to be the scenario in conducting oil and gas upstream mining activities as the previous regulation (UU No. 8 Tahun 1971). Because of the high costs and risks in upstream mining activities, the contractors are dominated by foreign companies, meanwhile National Oil Company (NOC) doesn’t act much. The domination of foreign contractor companies also warned Indonesia in several issues addressing to energy independence and energy security. Therefore, to achieve the goals of energy which is independence and security, there need to be a revision in upstream oil activities regulating scenario. The scenarios will be comparing the current scenario, which is PSC, with the “full concession” scenario for National Oil Company (NOC) in managing oil upstream mining activities. Both scenario will be modelled using System Dynamics methodology and assessed furthermore using financial valuation method of income approach. Under the 2 scenarios, the author will compare which scenario is better for upstream oil management in reaching the goals mentioned before and more profitable in financial aspect. From the simulation, it is gathered that concession scenario offers better option than PSC in reaching energy independence and energy security.
Highlights
THE domination of oil, coal, and gas happened in Asia – Pacific region, including Indonesia, which still mainly rely on those resources
All the energy needs are projected to be rising for the years ahead due to the growth of Indonesian Gross Domestic Product (GDP) which is composed by the energy user sectors
After the simulation of both scenario, it can be interpreted that the concession scenario offers better option for upstream oil management in Indonesia because it resulted in the distinctive difference to achieve the goal of energy independence and energy security
Summary
THE domination of oil, coal, and gas happened in Asia – Pacific region, including Indonesia, which still mainly rely on those resources. Oil dominates the usage of energy in Indonesia for around 32%, followed by coal for 23% and natural gas for 13% in 2014. Industrial sectors dominated the energy usage for 48%, followed by transportation sectors for 35%, household sectors for 11%, commercial sectors 4% and other sectors 2%. The needs of oil will increase up to 40.7% in 2050 due to the high usage especially in transportation sector. The needs of natural gas will only increase up to 13.8% in 2050. The certain increase in energy needs, especially oil and gas, not followed by Indonesia’s ability in fully supplying both oil and gas.
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