Energy Transition and Its Impact on The Oil & Gas Industry Key Players, According to The Expert

Mr. Herman Darman is currently a Principal Geoscientist at PETRONAS, who has been trusted to responsible for the Asia-Pacific region. He was a graduate of Institut Teknologi Bandung majoring in Geology and was active as a Chief Editor of ITB Geological Students magazine entitled “Suara Gea”, which received a notable award from Tempo Magazine. Mr. Herman then continued his studies in Petroleum Geology at the University of Aberdeen. In terms of his work experience, he worked at Shell, PT Eksindo Pratama, and also as an adjunct lecturer at Universiti Teknologi PETRONAS. On top of that, he is also an advisor and founder of Indogeo Social Enterprise.

In this interview, the Journalism team of the Society of Petroleum Engineers ITS SC 2020/2021 took the opportunity to dig deeper about energy transition plans from the perspective of an expert, Mr. Herman Darman.

From the perspective of a geoscientist, is it true that oil and gas will deplete soon?

In my opinion, oil and gas will not deplete any time soon. Instead, it is the falling economy that will end the triumph of the industry. Oil (and gas) cannot easily run out, there will always be an “extra” or amount that is left out. Even the wells that are not used anymore still have oil in them because oil cannot be extracted 100%. We can certainly come back to those wells to extract more with advanced technology, but we often forget that when we are talking about geophysics and geology exploration, we are actually talking about business that revolves around money and time. Another factor that contributes to the end of the oil and gas industry is regulation. For example, in other countries such as France and New Zealand, activities of oil and gas exploration is banned due to environmental issues. As we all know, there is a global agreement to minimize carbon emission and one of the ways is to stop exploration activities. 

How do these environmental issues lead to the transition to renewable energy?

As of right now, Indonesia’s oil and gas industry is in great need of investors. What’s happening is that these investors have averted their attention to something else, namely renewable energy. For example Shell and BP who have committed to transform their business and invest in geothermal, wind, etcetera. Thus, we have no other choice but to follow this energy transition rather than not getting any investors and buyers. 

What should oil and gas industry players consider in order to follow the energy transition plans?

In order to follow the transition, companies should change their focus. Take Shell as an example, as I have worked at Shell for over 20 years, it is true that Shell started as an oil and gas company. But now they have committed to focus on being an electricity company. Shell has invested and will continue to do so into renewable energy by hosting competitions such as the Shell Eco-Marathon in support of hydrogen cars. Well, I must say that if companies want to survive, they have to transform their businesses. 

What is the role of the Geoscience field in the energy transition?

Well, as of right now, we are only getting the impact. When I was in Shell, Shell had a block in New Zealand. When we were planning its exploration and other processes, all of a sudden, New Zealand started implementing its regulations to stop oil and gas exploration activities. Also, it is very hard to find a partner to collaborate with. But there is also an opportunity in the midst of all these. We realize that big key players in the industry have lessened their activities, which then paves the way for medium and small businesses, such as Petronas itself. With all that said, I still feel like there is a lot of potential in Geoscience. Personally, I am currently studying Geothermal. 

How is the prospect of renewable energy in Indonesia?

The future of renewable energy in Indonesia is actually quite bright. But the problem is, not many can see that. Indonesians still focus their path on oil and gas, when actually, we are being left behind by other countries such as New Zealand. This happens because there is a lack of promotion and guidance for renewable energy in Indonesia, especially for the students. From what I know, the majority of university students studying Geoscience are targeting to work in the oil and gas industry, which is hand-in-hand with the lecturers’ aim to prepare their students to work in that industry as well. Meanwhile, the field of Geothermal is not socialized well because the market now is not that much yet on top of the government’s lack of knowledge on how to develop geothermal energy. We are still too invested in the oil and gas industry. In actuality, the oil and gas industry in Indonesia rarely develops new concepts and theories, we do things commonly based on England.