SPEak Up! CCUS: Remarkable to Support Emission Reduction

Early in 2024, there is a heightened risk of disruptions to the global oil supply due to the conflict in the Middle East —a region that supplies one-third of the world's seaborne oil trade— especially for oil flows that pass through the Suez Canal and the Red Sea. The International Energy Agency (IEA) has warned that the US and UK airstrikes on Houthi targets in Yemen in response to attacks on tankers in the Red Sea have expressed worries  about the potential for an escalation of the conflict. This important trade route handled almost 10% of the world's seaborne oil commerce in 2023, or about 7.2 million barrels per day (mb/d) of crude and oil products, as well as 8% of the world's trade in liquefied natural gas (LNG). The primary alternate shipping route around the Cape of Good Hope in Africa prolongs voyages by up to two weeks, which puts strain on international supply systems and raises the cost of freight and insurance.Stable oil prices despite escalating tensionsOil companies are taking a cautious stance in response to these escalating geopolitical tensions in the Middle East. Mike Sommers, CEO of the American Petroleum Institute, has expressed worries about the growing chance of the crisis intensifying and derailing oil supplies. And although Oil prices have stayed comparatively steady despite the tensions; some experts attribute this to the impact of economic considerations on oil prices. Thus far, the Houthi raids and other Red Sea disruptions—such as the diverting of supplies away from the Suez Canal—have not had a substantial effect on energy prices. Experts have cautioned that tensions in Iran, particularly around the Hormuz, may have an impact on oil prices and that the longer the violence in Gaza continues, the more likely it is that a regional crisis may break out. The closure of important trade routes, which would have previously led to a significant increase in energy prices, has not had the same effect due to the market's confidence in the availability of supply.Assessing Supply and DemandThe World Bank's Commodity Markets Outlook in October 2023 provided a preliminary assessment of the potential near-term implications of the conflict. In a "medium disruption" scenario, the global oil supply would be reduced by 2-4 million barrels per day, initially increasing oil prices by 21% to 35%. In a "large disruption" scenario, with a reduction of 5-10 million barrels per day, oil prices could increase by 56% to 75% initially. Additionally, The IEA has revised its forecast for oil demand upward, anticipating a larger increase in global oil demand in 2024. The IEA's forecast indicates a balanced oil market, with world oil demand expected to grow by 1.1 million barrels per day in 2024, and non-OPEC supply growth projected to reach 1.2 million barrels per day. This balanced outlook is significant, considering the potential impact of the geopolitical tensions and disruptions in the Red Sea on the global oil supply. The agency's assessment of a "comfortable" oil market in 2024, despite the disruptions in the Red Sea, reflects the resilience of the oil market due to factors such as ample oil and gas supply, weaker demand in certain countries, and the ability of tankers to find alternative routes to deliver oil and gas products. ConclusionWhile the present upheavals and wars aren't having a big effect on the world energy markets, the international community should still be prepared and pay close attention to the Middle East's ongoing volatility. The developing scenario in the region could result in further escalation and have an effect on the energy landscape. Thus, in 2024, it will still be imperative to keep an eye on Middle Eastern geopolitical developments and any potential effects they may have on the energy markets.Written By: Arya Nugraha Aulia Rahman YusupReferences:Oil prices steady despite Middle East tensions, but risks are rising | Oil and Gas News | Al JazeeraOil Market Report - January 2024 – Analysis - IEAConflict in Middle East Could Bring ‘Dual Shock’ to Global Commodity Markets (worldbank.org)Geopolitical tensions in Middle East bear risks for oil supplies — IEA - Business & Economy - TASSIEA's Birol predicts 'comfortable' oil market despite Red Sea disruption | Reuters

Image source : Suara.com/Ema RohimahThe recent hike in the price of fuel oil has left the public infuriated. On the same day when President Joko Widodo and the ministers held a press conference last September, the official fuel price increased by 30 percent. The hike—the first in eight years—raised the Pertalite's price from Rp. 7.650 to Rp. 10.000 per liter, diesel price from Rp. 5.150 to Rp. 6.800, and Pertamax from Rp 12.500 to Rp 14.500. This then begs a question, why did the price of gasoline rise?One thing we should know, anything that impacts crude oil will affect gasoline. The price of crude oil, however, always fluctuates.  One of the factors that can influence the recent price of crude oil is the supply and demand of crude oil.The principle of supply and demand is the same as what we’ve learned at school, when demand increases, oil prices rise (or supply decreases), and vice versa. For example, Brent crude oil, a type of crude oil, plummeted to $22.58 a barrel in March 2020, reaching its lowest level since 2002 due to the COVID-19 pandemic. That can happen because a lot of businesses closed, which caused the low demand for oil.Geopolitical events in any of the major oil-producing countries might also result in oil trade wars and affect oil prices. Oil prices can skyrocket as a result of conflict or crisis. This is because traders are concerned that it will limit the oil supply, causing prices to rise. The recent Russia-Ukraine conflict made oil prices top $100 per barrel for the first time since 2014 in February. What a number.In addition to crude oil, outside factors may also contribute to raising the price. Retail prices for fuel oil can be influenced by production costs and government regulations, too. The components of production costs that must be considered are the cost of crude oil, the cost of refining, the cost of distribution and marketing, and the cost of taxes. According to the Finance Ministry, Sri Mulyani, the economic price (crude oil price + production cost combined) for Pertalite is supposed to be Rp. 14.450 per liter while diesel is Rp. 13.950 per liter. Of course, the retail gasoline prices that we pay in SPBU are already subsidized by the government.Difference between subsidized prices at the pump and economic prices in Indonesia. Source: Investor Daily Source: U.S. Energy Information Administration, Gasoline and Diesel Fuel UpdateGovernment policy plays a vital role in ensuring that the price is reasonable for both the people and the country. According to President Joko Widodo, the energy subsidy had tripled this year from its original budget, triggered by rising global prices of oil and gas. So, rather than increasing the number of subsidies, the decision to raise fuel prices appears plausible for the time being. But why isn't the price of gasoline rising in neighboring countries like Malaysia?Well, despite having similarities in many aspects, the production and distribution of energy are structurally quite different due to factors like market size and domestic supply. Indonesia has not recently made significant profits because the domestic market has become the primary market, which is more political and economical to people than profit-driven. This presents a challenge because consumers are used to the days of cheap, plentiful oil, while Indonesia is producing less than it once did. Oil production and consumption in Indonesia Source: BP Statistical Review of World Energy, various yearsPertamina’s limited refinery capacity means that it has become ever more reliant on imports and thus more sensitive to swings in global energy prices. Contrarily, Malaysia has consistently generated profits and has managed to hold gasoline prices steady despite volatility in the world energy markets. It is difficult to compare the two countries since Malaysia has a much smaller domestic market than Indonesia.The rising of fuel prices is a really sensitive issue, any changes will have a significant impact on households and small businesses. Indonesia probably needs to allocate more spending toward human resources investment, like creating more jobs and improving education, in order to be resilient to the swings of global energy. It must do more than just raise the prices to benefit from its demographic transition.References: https://thediplomat.com/2022/09/why-the-price-of-petrol-increased-in-indonesia-but-not-in-malaysia/https://www.thebalancemoney.com/how-are-oil-prices-determined-3305650#:~:text=What%20affects%20the%20price%20of,supply%2C%20and%20expected%20global%20demand.https://www.investopedia.com/articles/investing/072515/top-factors-reports-affect-price-oil.asphttps://www.investopedia.com/articles/economics/08/determining-oil-prices.asp

Indonesia has taken a significant step in reshaping its upstream oil and gas landscape, with the government formally announcing 118 potential new oil and gas working areas as part of a broader push to accelerate exploration and grow the country's reserve base. The announcement was made by Director General of Oil and Gas Laode Sulaeman on May 28, referencing a presentation delivered by Energy and Mineral Resources Minister Bahlil Lahadalia at the 50th Indonesian Petroleum Association Convention and Exhibition (IPA Convex) on May 20.The initiative comes as Indonesia seeks to reverse a long-term decline in oil production while strengthening domestic energy security. The 118 potential working areas were developed through contributions from the Geological Agency of the Ministry of Energy and Mineral Resources, Lemigas, and existing contractors, with costs funded through the state budget.As of May 20, 2026, 25 of the 118 areas had already attracted formal interest or progressed to contract signing, with an additional 43 in the joint study phase. The remainder are being positioned for joint studies or direct designation as new working areas, suggesting meaningful industry appetite across the board.On the optimization side, the government has expressed strong support for PT Pertamina Hulu Energi's (PHE) push to bring idle structures back into productive use through Operational and Technology Cooperation arrangements (KSOT), under Ministerial Regulation No. 14 of 2025. PHE has prepared around 41 idle structures for KSOT, of which 22 were publicly announced at IPA Convex 2026, spanning all four operational regions: 8 in Regional 1 (Sumatra), 4 in Regional 2 (Java), 7 in Regional 3 (Kalimantan), and 3 in Regional 4 (East Java and Eastern Indonesia). The remaining structures are expected to be opened for cooperation in the near term.The scale of the initiative, covering new working areas, idle structures, idle wells, and community production schemes simultaneously, signals a coordinated government posture aimed at closing the gap between Indonesia's hydrocarbon resource potential and its current production levels. With drilling activity and partnership processes already in motion across multiple fronts, if executed as planned, the initiative could unlock new reserves and accelerate production growth from both frontier exploration areas and previously idle assets over the coming years.  Writer: Timothy Evan

On the 13th of October 2023, the Society of Petroleum Engineers (SPE) Institut Teknologi Sepuluh Nopember (ITS) Student Chapter hosted an inspiring event titled 'Delegates Talk 1.0.' The objective of this program was to provide a platform for successful delegates to share their experiences and tips with members interested in excelling in the competitive world of oil and gas competitions.Asta Raziq, the PIC of the event, explained that the idea behind this was to meet the curiosity of numerous members who were eager to learn how to succeed in competitions. This program aimed to fulfill that desire by arranging face-to-face discussions with speakers who have excelled in oil and gas competitions. Asta Raziq stated, "Our main goal is to shed light on competitions since many members have shown an interest in this field. However, we also want to introduce them to SPE ITS SC on a deeper level. With this delegates' talk, we aim to demystify oil and gas competitions while showcasing fields that may be suitable for our members."The event commenced with presentations by two accomplished speakers, Samuel Zagota and Haya Aqila, who had previously achieved success in various oil and gas competitions, including being the 1st Winner in the Petroleum Business Case Competition at IPFEST ITB 2023. They shared insights into the structure, technicalities, and distinctive characteristics of case studies and business case competitions, providing valuable information to the enthusiastic members.Following these informative presentations, an engaging Q&A session was conducted where several members took the opportunity to ask the speakers about various competitions in the oil & gas field, such as oil rig design and paper competition. Many of the participants were freshmen, new to these competitions and unsure of where to begin. They sought advice and tips from the speakers on how to kick start their journey in these competitions. The exchange of questions and answers fostered a dynamic and engaging atmosphere, making it a valuable part of the event.The event continued with Asta Razqi, the Project Officer for the 2023 SPE ITS SC's Petroleague, presenting the 'Petroleague Roadshow.’ Petroleague is the annual internal competition of SPE ITS SC, this competition is suitable for beginners who want to start their competition journey. The highlight of the event was the Focused Group Discussion (FGD), where both speakers delved into their personal experiences and journeys in the oil & gas competitions. They patiently interacted with the members, addressing their questions and providing insights into their journeys in competitions. The speakers' willingness to discuss the hurdles they had overcome, the strategies they had employed, and the moments of inspiration that had fueled their success not only served as a source of motivation but also demystified the often intimidating world of oil and gas competitions.Through 'Delegates Talk 1.0,' SPE ITS SC not only catered to the interests of its members but also expanded their knowledge about the diversity of competitions within the oil and gas sector. Importantly, it encouraged members and delegates to participate in competitions organized by SPE ITS SC, including the annual Petroleague, and to explore many competitions outside of ITS. “Moreover, there will be a series of introduction series events with various competitions such as Oil Rig Design Competitions, Business Case Competition, Paper & Poster Competition, and Case Study Competitions with hope that members will be able to understand more about the competition and be able to take part in events that will be held in the future.” Asta concludedWritten By: Arya Nugraha Aulia Rahman Yusup