Jakarta, May 10, 2017 - The ongoing global oil price crisis has brought a tremendous domino effect to various sectors in Indonesia, such as slowdown of economic growth in certain regions, struggling oil and gas supporting industries, significant worker lay off and other social impacts in the community. SKK Migas’ data shows 27% year-on-year decline in upstream oil and gas investment, from 15.34 billion USD in 2015 to 11.15 billion USD in 2016. The government and relevant parties must take immediate action for Indonesia to avoid a wider and prolonged energy crisis. A comprehensive long-term solution, that starts with fit-for-purpose policy reform, is much needed.
Marjolijn Wajong, Executive Director of IPA, stated, "I can not stress enough the urgency of the current situation. No significant discovery of new reserves due to low exploration activity will hit Indonesia’s production capability in immediate future. Production decline will get worse if we only rely on existing maturing producing areas. We need to find new reserves in new areas. We need massive investment to do that.”
IPA President Christina Verchere, said that "Indonesia is competing for capital regionally and globally, and therefore it must be attractive enough to attract investment.”
In that spirit, the Indonesian Petroleum Association (IPA) will convene its 41st Convention & Exhibition (Convex) on 17-19 May 2017 at the Jakarta Convention Center, with the theme “Accelerating Reform to Re-Attract Investment to Meet the Economic Growth Target”. This is a forum for policy makers, industry leaders, potential investors and experts to jointly seek actionable solutions which will spur the growth of the industry, which will then induce economic growth across various sectors in Indonesia.
Multiplier Effects and Challenges of the Indonesian Oil and Gas Industry
“The Indonesian oil and gas industry, combined with all its supporting sectors, has a large multiplier effect on the Indonesian economy. According to Katadata, every million USD invested in upstream generates 1.6 million USD added value, creates around 100 jobs and adds 700 thousand USD to GDP,” explained Tumbur Parlindungan, IPA Board Director.
Such significant economic impact, unfortunately, is still constrained by various challenges currently faced by upstream oil and gas industry in Indonesia such as legal certainty, competitiveness of fiscal regime, regulatory reform (revision of Government Regulation No. 79 of 2014 and the economics of gross split scheme), and cost of capital. This resulted in declining oil production, alarmingly low reserve replacement ratio, slow investment in domestic gas infrastructure, and lack of interest in new blocks offered by Indonesia.
IPA, according to Marjolijn Wajong, is keen to actively contribute in the formulation of policies to increase investment and productivity of upstream oil and gas industry in Indonesia.
Looking for Immediate Solution for Oil and Gas Crisis in Indonesia
Without further significant investment, critical exploration activity will continue to decline and Indonesia’s oil and gas potential will not bring any additional value and benefits to the state and its people. IPA believes that building a positive oil and gas investment atmosphere should be a priority for the Indonesian government to re-attract investment in this sector. This will be discussed in depth at the IPA’s 41st Convex.
IPA Convex is the largest convention and exhibition event in Asia Pacific which is a place for Collaboration, Cooperation and Coordination among stakeholders of oil and gas sector in Indonesia. "At the IPA Convex, the relevant stakeholders will discuss key topics to find immediate solutions for the challenges facing Indonesia’s upstream oil and gas industry," said Michael Putra, Chairman of IPA Convex 2017.
The three Plenary Sessions: Re-Attracting Upstream Oil and Gas Investment amidst the Global Capital Efficiency Drive; Beyond Revenues: The Indispensable Contribution of the Upstream Industry to Local Industry and Economic Growth; and Priority Reforms to Re-Attract Investment, are expected to dissect the challenges from many angles to then recommend a comprehensive and immediate actionable steps to re-attract investment. A Special Session will be convened to discuss the important human capital aspect of the industry. The topic “Investing in Indonesians: Impact of the Current Landscape” is to be discussed by representatives of various Indonesian oil and gas’ professional associations.
Scheduled to be opened by President Joko Widodo, more than 100 exhibitors from the oil and gas industry and various relevant sectors including service companies, contractors, government organizations, media, chambers of commerce, etc., have confirmed their attendance to showcase the latest technologies and industry best practices at the exhibition.
There will be more than 110 oral papers and 60 poster that will emphasize the achievements and the breakthrough of the latest developments within the industry, which will be delivered in technical sessions and poster sessions.
“Equally important with the policy discussions, the IPA Convex will also convene its signature knowledge transfer sessions where hundreds of young Indonesians participate in dozens of technical sessions. Over the many years, IPA Convex has accumulated over 3,400 international-quality technical papers – all were done by Indonesians. In addition to nurturing technical knowledge, this year we proudly introduces Business Case Competition to our portfolio of program. The industry faces more and more non-technical challenges, and we are keen to see our young talents getting ready to address them. Over 200 participants took part to test their business acumen in solving the complex set of commercial, political, and societal issues,” explained Michael.
About The Indonesian Petroleum Association (IPA)
The Indonesian Petroleum Association (IPA) is a non-profit organization that was established
in 1971 and is the primary oil and gas industry association in Indonesia, consisting of 42
companies members, 107 association members and more than 1.000 invidual members.
The IPA is the “Partner of Choice” for government to promote the upstream oil and gas
industry through the formulation of appropriate policies and to facilitate consultation,
coordination, and collaboration between all stakeholders, government and its agencies, to
advance the development of the oil and gas industry in Indonesia.
The IPA also promotes the continuation of education and knowledge transfer as a key
contribution towards the development of national capacity through technical courses,
workshops, site visits and the annual IPA Convention and Exhibition.
About the IPA Convention and Exhibition
The IPA Convention and Exhibition is the most prominent oil and gas annual event in the
Southeast Asia region and has been held for the past 40 years.
The IPA Convention and Exhibition brings together policy makers, regulators, experts,
investors, operators and support sectors to exchange ideas, learn of new advanced
technologies and partner together to enhance future investment in the oil and gas industry
For more information, please contact:
Executive Director, Indonesian Petroleum Association
Email: [email protected]
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In the last week, global crude oil price benchmarks have leapt up by some US$5/b. Brent is now in the US$66/b range, while WTI maintains its preferred US$10/b discount at US$56/b. On the surface, it would seem that the new OPEC+ supply deal – scheduled to last until April – is working. But the drivers pushing on the current rally are a bit more complicated.
Pledges by OPEC members are the main force behind the rise. After displaying some reticence over the timeline of cuts, Russia has now promised to ‘speed up cuts’ to its oil production in line with other key members of OPEC. Saudi Arabia, along with main allies the UAE and Kuwait, have been at the forefront of this – having made deeper-than-promised cuts in January with plans to go a bit further in February. After looking a bit shaky – a joint Saudi Arabia-Russia meeting was called off at the recent World Economic Forum in Davos in January – the bromance of world’s two oil superpowers looks to have resumed. And with it, confidence in the OPEC+ club’s abilities.
Russia and Saudi Arabia both making new pledges on supply cuts comes despite supply issues elsewhere in OPEC, which could have provided some cushion for smaller cuts. Iranian production remains constrained by new American sanctions; targeted waivers have provided some relief – and indeed Iranian crude exports have grown slightly over January and February – but the waivers expire in May and there is uncertainty over their extension. Meanwhile, the implosion in Venezuela continues, with the USA slapping new sanctions on the Venezuelan crude complex in hopes of spurring regime change. The situation in Libya – with the Sharara field swinging between closure and operation due to ongoing militant action – is dicey. And in Saudi Arabia, a damaged power repair cable has curbed output at the giant 1.2 mmb/d Safaniuyah field.
So the supply situation is supportive of a rally, from both planned and unplanned actions. But crude prices are also reacting to developments in the wider geopolitical world. The USA and China are still locked in an impasse over trade, with a March 1 deadline looming, after which doubled US tariffs on US$200 billion worth of Chinese imports would kick in. Continued escalation in the trade war could lead to a global recession, or at least a severe slowdown. But the market is taking relief that an agreement could be made. First, US President Donald Trump alluded to the possibility of pushing the deadline by 2 months to allow for more talks. And now, chatter suggests that despite reservations, American and Chinese negotiators are now ‘approaching a consensus’. The threat of the R-word – recession – could be avoided and this is pumping some confidence back in the market. But there are more risks on the horizon. The UK is set to exit the European Union at the end of March, and there is still no deal in sight. A measured Brexit would be messy, but a no-deal Brexit would be chaotic – and that chaos would have a knock-on effect on global economies and markets.
But for now, the market assumes that there must be progress in US-China trade talks and the UK must fall in line with an orderly Brexit. If that holds – and if OPEC’s supply commitments stand – the rally in crude prices will continue. And it must. Because the alternative is frightening for all.
Factors driving the current crude rally:
Already, lubricant players have established their footholds here in Bangladesh, with international brands.
However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.
For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands.
Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market.
The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.
The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.
A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.Why “Lubricants shelf” is key to monitor engine oil market?
The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.
And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.
You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.
Regularly, lubricants retailers have to welcome the representatives of newly entered brands.
And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.
On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.
However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
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