By: Eleine Pramesti *)
Indonesia, as one of the countries with quite large oil and gas reserves, is actively opening new doors for foreign investment, including to strategic markets such as the United States (US). This step not only reflects the spirit of dynamic economic diplomacy, but also becomes a concrete strategy in strengthening Indonesia’s position in the global energy supply chain. In the midst of the global shift towards clean energy, Indonesia remains aware that the oil and gas sector still has an important role as a pillar of the national economy and energy, especially during the energy transition period.
The great opportunities that are wide open in the United States do not just come by themselves. This is the result of a combination of the Indonesian government’s proactive strategic approach, relatively maintained political stability, and policy reforms in the energy sector that increasingly provide legal certainty and ease of investment. The United States, as one of the countries with a mature investment ecosystem, high technology, and strong global financial networks, provides great opportunities for Indonesia to not only attract investment, but also transfer technology and expertise.
Indonesia’s move to look to the US market can also be read as an effort to expand the diversification of funding sources and energy partnerships. So far, investment in Indonesia’s oil and gas sector has mostly come from East Asia and the Middle East. Opening an investment corridor with the United States means opening up opportunities to introduce Indonesia’s oil and gas reserves, which are still very large but have not been optimally explored. In the long term, this will encourage efficiency, transparency, and sustainability of the national oil and gas industry.
Deputy Minister of Investment and Downstream/Deputy Head of the Investment Coordinating Board (BKPM), Todotua Pasaribu, said that the oil and gas sector is one of the strategic commodities that has the potential to become an entry point for Indonesian companies’ investment to the United States. This was conveyed in response to the government’s plan to encourage Indonesian companies to invest in the US as part of the negotiation material for reducing the US reciprocal tariff on Indonesia by 32 percent.
Todotua also explained that the form of investment can vary, starting from the acquisition of oil and gas wells, activities in the upstream sector, and midstream such as the construction of offshore refineries. He also emphasized that Indonesia’s overseas investment strategy, including to the US, will be more flexible with the presence of the Danantara Investment Management Agency (BPI). He hopes that the investment strategy in the US that will be implemented will still involve state-owned companies.
Responding to this plan, Pertamina’s Vice President of Corporate Communication, Fadjar Djoko Santoso, said that his party is still waiting for government direction. Pertamina is opening up opportunities for cooperation or investment with partners, including US companies for the benefit of both parties.
On the other hand, energy observer and founder of the ReforMiner Institute, Pri Agung Rakhmanto, said that this plan is positive as long as it is managed properly. According to him, Pertamina has a great opportunity to acquire US oil and gas fields that are already in the production stage. This step, he continued, will not only strengthen Pertamina’s position globally, but can also support national energy security by increasing oil and gas production from abroad.
Investment collaboration between Indonesia and the United States in the oil and gas sector can also be a catalyst in improving the quality of human resources domestically. With the entry of American oil and gas companies, Indonesia has the potential to gain technology transfer in managing oil and gas blocks in a modern and efficient manner. Horizontal drilling technology, advanced geological mapping, and operational digitalization systems can accelerate the exploration and production process, which in turn increases the contribution of oil and gas to state revenues.
Chairman of the Investment Committee of the Oil and Gas Companies Association (Aspermigas) Moshe Rizal, reminded the government to be more careful in encouraging oil and gas investment to the US. According to him, the oil and gas sector is a high-risk industry, especially if it enters an area that is not yet familiar to Pertamina. However, Moshe reminded that foreign investment must be balanced with improvements at home.
This investment opportunity is increasingly open with increasingly conducive regulations and legal frameworks in Indonesia. The Indonesian government has shown its commitment to improving the investment climate by issuing more flexible, transparent, and investor-friendly regulations. Simplification of licensing, implementation of a more attractive gross split scheme, and guarantees of investment security are a special attraction for American oil and gas industry players.
LangIs Indonesia opening up the huge potential of oil and gas investment in the United States ultimately part of a long-term vision to realize national energy independence. In the midst of efforts to transition to renewable energy, Indonesia still needs a careful strategy in managing its fossil energy wealth. By establishing strategic cooperation with the United States, Indonesia is not only expanding its market and strengthening the competitiveness of the oil and gas industry, but also accelerating the transformation of the energy industry towards a more modern, efficient, and sustainable direction.
With all the potential, readiness, and opportunities available, now is the time for Indonesia to take bolder steps in positioning the oil and gas sector as the driving force of global economic diplomacy. Making the United States a strategic partner is not just a pragmatic choice, but a necessity in responding to the challenges of the world’s energy future.
)* The author is an Energy Journalist at the Greenpeace Resources Institute
