IPA PROFESSIONAL DIVISION LUNCHTIME TALK DATE : Thursday, December 1, 2005 TIME : 11:45 Hrs. VENUE : Songket + Tapis Room Four Seasons Hotel Jakarta Jln. H.R. Rasuna Said Jakarta 12920
SUBJECT : "The Urgency of Building Competitiveness to Attract Oil and Gas Investment in Indonesia – An Industry Survey on Investment Issues and Opportunities to Enhance Upstream Investment" SPEAKER : William Deertz, PricewaterhouseCoopers ABSTRACT The petroleum industry in Indonesia has been a key contributor to the Government of Indonesia (GOI) budget and total exports (16% and 25% respectively in 2004). Indonesia's oil and gas production has been declining in recent years, which ironically caused Indonesia to become a net importer in 2004. The recent declines in oil and gas production are the direct result of the absence of significant new oil and gas reserve discoveries as well as the lack of development of existing proven oil and gas reserves. Various parties perceive that the lack of significant new oil and gas discoveries has been primarily due to inadequate exploration activities by oil and gas investors over the years, this despite the fact that Indonesia continues to be viewed favorably for geological prospectivity. Investors' declining interest in conducting exploration activities may pertain to various issues and the climate of uncertainties brought about by significant developments in recent years such as: • Frequent changes in Indonesia's political leadership; • The enactment of a new oil and gas law but slow enactment of implementing regulations; • The issuance of new laws many of which conflict with the existing regulatory framework; • The ongoing restructuring of Pertamina; • The organizational development of BP Migas/BPH; • Emerging issues related to regional autonomy and taxation; and • Efforts by the GOI to increase tax revenues from the upstream oil and gas industry. The GOI has recently reacted to many of these concerns by offering fiscal incentives such as investment credit on marginal fields and increased equity splits but it is too early to determine if these measures alone are sufficient to increase investment significantly. In mid-2005 PricewaterhouseCoopers jointly undertook a survey with the IPA of oil and gas executives who have production or exploration activities in Indonesia to gain their perspective on the current issues which confront the Indonesia petroleum industry, relationships amongst industry and GOI organizations, actions which could spur further investment and improve their outlook for the Indonesia oil and gas industry in 2005 and beyond. The perspectives shared by these executives are insightful and are critical to address the issues facing the oil and gas industry in Indonesia. The Indonesian oil and gas industry as at a critical juncture. The survey results present a mixed picture for future upstream oil and gas industry capital investment plans in Indonesia over the coming years. While Indonesia's geological prospectivity continues to garner relatively high ratings, the resolution of the issues raised by industry investors may impact whether the country has the financial resources and latest technology to discover and develop new oil and gas reserves to fuel Indonesia's economy for years to come. COST: Rp. 185.000,00 (IPA Prof. Div. Member) or Rp. 205.000,00 (Non IPA Prof. Div. Member) excluding drinks, payable at the entrance of the Songket + Tapis Room; payment in cash is preferred. • Reservations and cancellations will be accepted until 15:30 hours on November 30, 2005. Phones: 572.4284-4286/4161; fax: 572.4259/4159; e-mail: [EMAIL PROTECTED] or [EMAIL PROTECTED] • No reservations and cancellations will be accepted after this time. • Members of the Ikatan Ahli Geologi Indonesia (IAGI), Himpunan Ahli Geofisika Indonesia (HAGI) and Ikatan Ahli Teknik Perminyakan Indonesia (IATMI) are welcome.
