Oil and gas companies have warned the government to take more concrete action to revive the country's oil and gas industry, which has suffered not only from a decline in production, but also in terms of new investments.
Speaking during the annual convention and exhibition of the Indonesian Petroleum Association (IPA) on Wednesday, the association's president, Craig Stewart, said President Joko "Jokowi" Widodo's government had done a lot to remove exploration and production bottlenecks.
However, he added that the government needed to do more to improve the business climate in the oil and gas sector.
Stewart said the sector had been marred not only by the decline in oil production but also a drop in exploration activities.
He said the industry faced slow moving and inefficient bureaucracy that had caused delays in approval and permission processes for exploration and production activities.
"The government has done a lot in a short time, such as in transparency, bureaucratic streamlining and decisions on expiring blocks. However, we have a lot of work left to do to meet these challenges," Stewart said.
Under the current government, which took office seven months ago, the Energy and Mineral Resources Ministry has tried to overhaul the sector and build a better image, partly in response to corruption cases linked to the ministry.
Under current Energy and Mineral Resources Minister Sudirman Said, the ministry dismissed under-performing personnel, put the top posts of director general in open selections, and issued several regulations including on expiring blocks.
In the latest move, the ministry handed over on Wednesday the licensing process in the oil and gas sector to be managed under a one stop service by the Investment Coordinating Board (BKPM).
The move followed a previous attempt earlier this year in the electricity sector.
In the hand over, 42 permits that used to be handled by the Energy and Mineral Resources Ministry's oil and gas directorate general will now be processed at the BKPM.
"The 42 figure is only part of the total licensing process. However, we have started to simplify it and we hope this will encourage local governments to do the same," Sudirman said.
There used to be 341 licenses that had to be obtained by oil and gas companies, of which 52 were licenses managed by the oil and gas directorate general, while the remainder were from other ministries and institutions as well as local administrations. The ministry was able to cut the number to 42 licenses, which were then handed over to the BKPM.
BKPM head Franky Sibarani said the implementation of the one stop service in the oil and gas sector by the investment body would be easier compared to the electricity sector, as prior to the transfer, the ministry had reduced the number of required permits at the oil and gas directorate general.
"We're glad to see the licenses have been simplified before the transfer. However, it is also necessary to note that we also need to improve the speed of the licensing process," Franky said over the telephone.