Cabotage Implementation May Reduce Oil and Gas Production

Kamis, 23 Mei 2013 | 10:26

The cabotage principle implementation in upstream oil and gas industry could potentially reduce national production, because there must be an additional investment to comply Law No.17/2008 regarding Shipping.Head of SKK Migas Rudi Rubiandini said the availability of seismic vessels, drilling and Indonesian-flagged pipeline deployment is very limited. The condition becomes obstacle to upstream oil and gas industry, because it must include capital as majority to make supporting Indonesia-flagged vessels.


“There are only 3 drilling Indonesian-flagged vessels, by 2015 at least 64 vessels are required. So there’s need breakthrough to meet cabotage principle requirements that has been set,” he said in the opening National Convention Oil and Gas Support, Bandung, Wednesday (5/22).


Rudi said cabotage implementation should pay attention to the actual condition, so it can be effective. The inclusion of supporting oil and gas exploration equipment in cabotage principle is contra productive to the production target and oil and gas intensification.


He said all this time upstream oil and gas industry has applied cabotage principle by using Indonesian-flagged vessels for transportation. “It needs specificity for the upstream oil and gas supporting tools. If the cabotage principle was applied without compromise so oil and gas production will be hampered,” he explained.


Based on SKK Migas data, until end of this year as many as 41 derrick/crane, pipe/cable/surf laying barge are needed for production and 22 vessels for exploration, while by end of 2012 there was only 1 Indonesia flagged vessel.


By the end of 2014, at least 12 seismic survey vessels are required for production and 4 vessels for exploration, while last year there were only 10 vessels. Thereafter, 25 vessels drilling vessels are required of by end of 2015 for production and 39 vessels for exploration, whereas in 2012 only 3 drilling vessels.


The Ministry of Transportation has granted dispensation period of cabotage principle implementation in drilling vessels until end of 2015. Therefore, SKK Migas agreed memorandum of understanding (MoU) with Directorate General of Sea Transportation related to upstream oil and gas activities licenses.


Secretary General of Sea Transportation Erwin Rosmali said he will follow Shipping Law mandate. It means the directorate will continue to implement cabotage principle in supporting equipment of oil and gas exploration activities by 2015.


However, the Ministry of Transportation would also consider the national interest of national oil and gas sector. “We will follow the existing regulations,” he said.


He also ensures the Ministry of Transportation has no plan to propose the Shipping Law revision to include oil and gas exploration supporting tools in cabotage principle. Because, the existing Law is still relevant to the current domestic shipping condition. (t08/aph/tw)

by Lili Sunardi, Elok Ani Riani