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Sri Mulyani calls oil production decline a 'challenging situation'

Tempo - November 30, 2021

Francisca Christy Rosana, Jakarta – Finance Minister Sri Mulyani said Indonesia is facing the fact that oil and gas production continues to decrease every year. The production decline is affecting the macroeconomic sector because it will affect the trade balance.

"So this oil and gas is definitely a challenging situation," Sri Mulyani when speaking at the 2nd International Upstream Oil and Gas 2021 event streamed on the SKK Migas' YouTube channel, Tuesday, November 30.

The decline in oil and gas production, especially oil, has narrowed the gap between energy demand and supply. Even though Covid-19 has reduced demand for oil and gas use, Sri Mulyani said Indonesia still has a huge demand for energy because of its large population of more than 260 million people.

If domestic production cannot meet the demand for energy needs, the possibility for imports will be even greater as Indonesia is a "developing country with a large population and economic size, and so the demand for fuel energy will continue to rise," she said.

Referring to data from the Energy Ministry's Oil and Gas Directorate General, Sri said that 2020's oil lifting volume was 707 MBOPD, exceeding the target of 705 MBOPD, which was lowered from the initial goal of 755 MBOPD. Meanwhile, natural gas lifting volume was 975 MBOEPD, below the targeted 992 MBOEPD.

Sri Mulyani continued, the declining oil and gas production is a shared concern among various countries amid the global plan to reduce carbon emissions. This situation is seen as the right momentum to transition to renewable energy sources that are environmentally friendly and in line with the COP21 and COP26 commitments.

"The commitment to preventing climate change by curbing the planet's temperature increase also has a direct impact on the oil and gas industry. As the world's largest CO2 importer, Indonesia can change its path to zero emission," Sri Mulyani said.

Source: https://en.tempo.co/read/1534269/sri-mulyani-calls-oil-production-decline-a-challenging-situatio