Sambutan Presiden RI pada "33rd Annual Indonesian Petroleum Association", 05-5-09
SPEECH BY
H.E. DR SUSILO BAMBANG YUDHOYONO
PRESIDENT OF THE REPUBLIC OF INDONESIA
AT THE
33RD ANNUAL INDONESIAN PETROLEUM ASSOCIATION
CONVENTION AND EXHIBITIONÂ
JAKARTA CONVENTION CENTER, 5 MAY 2009
Bismillaahirrahmaanirrahiim,
Assalaamu'alaikum warahmatullaahi wabarakaatuh,
Salam sejahtera untuk kita semua,
Peace be upon us,
Excellencies, Ministers, Members of the Parliament, Ambassadors,
Mr. Roberto Lorato, the President of IPA,
Distinguished Participants and Business Leaders,
Ladies and Gentlemen,
Let me begin by bidding all of you a warm welcome. To our friends from abroad, I extend a special Selamat Datang.
I am pleased to be here with you today, for this Convention is a very important annual event in the industry. I am delighted that we have managed to organize this event in the midst of a busy and exciting political season. I am therefore very grateful for your support as well as your consistent trust and confidence in Indonesia.
I would like to commend the Indonesian Petroleum Association, IPA, especially the IPA Organizing Committee, for bringing together all the industry's stakeholders to this important forum. The convention theme you have chosen, "Managing Resources and Delivering Energy in a Challenging Environment," goes right to the heart of our concerns.
I look forward to fruitful discussions on the challenges we must overcome in order to support Indonesia's energy diversification policy, in particular the optimization of oil and gas development and utilization. I expect also that during this Convention, you will unveil the opportunities that the oil and gas sector has to offer in the kind of environment that prevails in Indonesia today. That environment is radically different from what it used to be.
In the last five years, we have achieved so much progress in carrying out a democratic transition. We have strengthened our democracy and embraced reforms that are exemplary to other nations. The elections we are holding this year are characterized by assertive campaigns that reflect our immense diversity as a nation. While they are free-wheeling, they also uphold the law. Our people continue to actively promote and practice tolerance, pluralism, and respect for human rights. They also demand good governance.
When my term comes to a close later this year, it will mark the first time since we launched the era of reformasi in 1998 that a government completes a full term. I don't know whether God will grant me an opportunity lo lead this country again in the second term. This means that we have finally succeeded in marrying democracy with stability, not an easy thing to do for a country going through democratic transition. All these reflect the maturity of our democracy.
During my campaign in 2004, I pledged to do everything possible to make Indonesia more democratic, more prosperous, more just and more secure. Today Indonesia is just that. We have peace in Aceh and Papua. Our local officials are elected and accountable to their constituents. Our anti-corruption campaign has scored spectacular successes. We have tremendously reduced the incidence of poverty. We have a respected place in the community of nations. And we are regarded as a source of global stability and a part of the solution to various systematic global problems.
Excellencies, ladies and gentlemen,
I am grateful for what Indonesia has become. One of the things that I am most grateful for is the resilience of the Indonesian economy today. The economic situation of the world is so dismal that the IMF has forecasted that the global economy will suffer a negative growth of 2.7% this year. Yet, we in Indonesia are confidently aiming for a 4.5% positive growth.
Factories all over the world are closing down by the hundreds. Scores of millions of jobs have been lost. But in our case, even our darker economic indicators have a lot of silver lining, the Rupiah lost a fifth of its value against the US dollar but the slide has been put to a halt and inflation is down. We are witnessing, for example, in the past three weeks the Rupiah continue to strengthen and also our Indonesian stock. Our banking system as a whole is healthy. The crisis had a little impact on the informal sector, while job losses in the manufacturing sector were far less than expected.
We are also fortunate that in the midst of crisis we are still able to have a tremendously productive agricultural sector. Last year our rice production was at a surplus and we hope that this year we can export rice to other countries.
We see the future as full of promises. Yesterday, when I open the Annual Meeting of ADB held in Denpasar, Bali, I meet my statement that probably we are now at the beginning of the end of the crisis. Of course we have to be more united and working together in overcoming the present crisis. In fact, the Nielsen Company has rated Indonesia as having the world's highest consumer confident, with a positive 104 points. In the months ahead a great number of Indonesians intend to spend money on durable commodities, mostly technology products. With such consumer confidence, I have no doubt that our stimulus package, which we are just beginning to implement, will work and make national economic growth even more certain.
Another basis of our optimism is the performance of our oil and gas industry, which remains one of the key pillars of Indonesia's economy. It accounts about 21% of total merchandise exports and 32% of total government revenues. Its commodities play strategic roles as critical sources of energy and feedstock for industries in the domestic market. The export of oil and gas continues to be an important source of revenue for the state.
For entrepreneurs, investing in the Indonesian oil and gas industry remains attractive. In the oil and gas sector investments reached US$ 12.9 billion in 2008 as has been said by the Minister Purnomo Yusgiantoro. We are targeting oil and gas investment to reach US$ 16.6 billion in 2009. We have to work harder to achieve those objectives.
My Government is committed to continuously making Indonesia's investment climate ever more attractive. Domestic and international investors can depend on that. We have developed a package of investment incentives and established a prudent fiscal policy. We are formulating ways to overcome tax problems in the oil and gas resources investment. We have made vigorous efforts to ensure legal certainty and effective regulation.
We have also reformed and restructured the regulatory framework for the energy industry so that it will develop an oil and gas sector that benefit all. As it is now, the regulatory framework promotes a favourable business climate and equal opportunity for all stakeholders. It fosters growth in the markets for oil and gas. It seeks to ensure that oil and gas resources are managed properly for the benefit of the nation and investors. It promotes safe, efficient, and environmentally friendly operation and also transparent business practices. And it is also aimed at providing the poor access to energy.
We are determined to boost our oil production. This means that we will expand and intensify exploration. We have many basins yet to be explored. At the same time, we are looking to gas, besides coal, as the fuel of the future.
Distinguished participants, ladies and gentlemen,
The new paradigm in our gas policy is to increase our domestic market for gas. We are giving the highest priority to that effort. Indonesia's domestic energy demand for and consumption of refinery products are increasing year to year. This is mainly due to increases in consumption by the transportation, power generation and industrial sectors. Domestic gas demand has steadily increased due to the reduction of the fuel subsidy coupled with economic and industrial growth.
We also recently introduced a program to encourage households to switch from kerosene to LPG. This program will shift Indonesia's natural gas consumption and trade. In recent months, 46% of our natural gas production was consumed domestically. With the new energy policy and the kerosene-LPG conversion program, some 52 million Indonesian households or 70% of the total households in Indonesia will soon be consuming 70% of Indonesia's total gas production.
The development and the expansion of the manufacturing and petrochemical industries will increase demand for energy in the future. A large part of that demand can be met by natural gas. Major industries near gas production areas need to be developed to ensure an efficient supply of feedstock.
As the appetite for energy in the country grows, we will also need to set medium and long term objectives for the national energy mix. And we will have to define the role that natural gas will play in that mix. We will not stop exporting, of course. For almost three decades, Indonesia played a critical role in supplying the energy needs of the region, through LNG and piped gas exports. We will maintain that role, and take advantage of our strong competitive advantage as a source of liquefied natural gas to regional and international markets.
We are very much experienced in an extensive economic and business cooperation. Our relationships with our traditional buyers are exceedingly successful. We also have the advantage of being geographically closer to these markets than other major LNG suppliers. Moreover, we are blessed with a variety of energy resources, which increases Indonesia's leverage.
We have major gas development projects that are expected to secure a steady supply of natural gas from domestic and export needs. They will also bring about multiplier effects by creating employment and business opportunities. These include offshore Mahakam, Senoro Donggi, Masela, Deep Sea Makassar, and Tangguh development.
Of course, in meeting our commitment to ensure sufficient gas supply for the domestic market, my Government must contend with some realities in the field. We must take into account the distance between the fields and the domestic markets, and the availability of infrastructures and the need of the state for revenues.
We recognize that investments in gas networks are capital intensive and that they have very long economic lives. We know that public and private investors want to be assured of a reasonable rate of return on their investments during the lifetime of the asset.
In the grand scheme of our national development, the oil and gas sector is crucial. It fuels the economy and is a major source of state revenue. When I assumed office in 2004, I immediately realized that we had to reform our energy policy. The right policy could be a big boost to our economy, while the wrong policy could impose a heavy burden on our people and hamper our economic development.
Alhamdulillah, in five years we have made considerable progress. We have made the oil and gas sector an even more important contributor to our national development. I am also pleased that we have transformed the industry from a monopolistic to a competitive one. We know we are on the right path. We will continue to enhance our investment climate and make it more attractive to investors, both domestic and foreign.
In fact, we will continue to enhance every aspect of our national life. We will continue to fine-tune our political institutions and processes. We will continue to build a culture of peace, probity and good governance, a culture of dialogue, tolerance and mutual solicitude. We will continue to strengthen our economy and address the challenges of food security and energy security among our people. We will strive to eradicate poverty whenever we encounter it.
And we will also keep on contributing to the solution of such global challenges as climate change and the ongoing global economic and financial crisis. And as we worked hard to work for peace within our borders, we will keep on striving to contribute regional and global peace through various peacekeeping and diplomatic initiatives.
Thus, when you invest in our oil and gas sector, when you invest in any part of the Indonesian economy, you are investing not only in the future of this nation but also in the better world that we are trying very hard to help achieve. Thus, you are our partners not only in business, but also in a great political, socio-economic and cultural vision, an Indonesia that keeps getting better every day and contributing in various ways to the shaping of a more peaceful, more just and more prosperous world.
Finally, ladies and gentlemen, by saying bismillahirrahmanirrahim, I formally declare the 33rd Annual IPA Convention and Exhibition, open.
I Thank you.
Wassalaamu'alaikum warahmatullaahi wabarakaatuh.
Biro Naskah dan Penerjemahan
Deputi Mensesneg Bidang Dukungan Kebijakan
Sekretariat Negara RI