Newly appointed renewables, oil and gas directors face difficult tasks
The newly appointed Energy and Mineral Resources Ministry’s renewables director general Dadan Kusdiana and oil and gas director general Tutuka Ariadji have tough challenges ahead. Dadan has the responsibility of accelerating clean energy development that has been sluggish, amounting to less than 10 percent, of the targeted 23 percent, of renewables in the primary energy mix in 2025. Meanwhile, Tutuka is tasked with ramping up oil production that has been dampened by the COVID-19 pandemic.
Dadan is expected to speed up the economic recovery post-COVID-19 pandemic through the green economy.1 The government has been offering retail green sukuk series ST007 from Nov. 3 until Nov. 25, targeting to raise Rp 2 trillion (US$142.08 million) to finance projects such as those focusing on renewable energy, energy efficiency, sustainable transportation, and waste and energy management.2
Among the renewable energy projects highlighted is Energy and Mineral Resources Minister Arifin Tasrif’s plan to conduct massive geothermal exploration. Dadan will have to reach the target of generating 683 MW electricity from 20 geothermal working areas (WKP) from 2022 to 2024. He is also tasked with accelerating the development of other types of renewables such as hydropower, bioenergy, wind power and solar power. The installed capacity for renewable energy has only reached 10.44 GW.3 Therefore, the government will have to produce on average 7 GW of electricity generation from renewables per year in the next five years to reach the 45.2 GW target in 2025.4
In order to achieve the target, Dadan will oversee the completion of two important regulations that will significantly change the country’s renewable energy industry: a Presidential Regulation (Perpres) on green electricity offtake prices and a new and renewable energy bill.5 Foreign companies and investors are closely watching the regulation change as it is expected to be a market changer in Southeast Asia.
Meanwhile, Tutuka must overcome challenges that are no less difficult. Indonesia’s oil production has been steadily declining over the past decade. In the past three years alone, production fell from 803,000 barrels of oil per day (bopd) in 2017, to 778,000 bopd in 2018, before falling further to 746,800 bopd in 2019.6 For this year, as of Sept. 30, production had reached 706,200 bopd. Tutuka faces a difficult task of raising this level of production to 1 million bopd by 2030.
In order to achieve the oil lifting target, Tutuka will have to boost investment and exploration in oil and gas, especially after the industry saw two global oil giants, US-based Chevron and Royald Dutch Shell, exit the nationally strategic Indonesia Deepwater Development (IDD) project and the Masela Block, respectively. As an enhanced oil recovery (EOR) expert, Tutuka is expected to be able to implement the EOR method to lift oil and gas more effectively to increase production.7 Furthermore, he has to ensure the smooth handover of the Rokan Block in Riau from Chevron to state-owned oil giant Pertamina, something he admitted was his most difficult task.
Not only that, on the downstream side, Arifin also hopes that Tutuka can accelerate oil refinery development. With the development of refineries, the country could reduce its imports of fuel oil (BBM) and liquefied petroleum gas (LPG).
Both Dadan and Tutuka went to the Bandung Institute of Technology (ITB) in West Java, many of whose alumni hold strategic positions in several ministries in the country. In fact, Minister Arifin also went to ITB. Both Dadan and Tutuka have the qualifications for their positions.
Dadan is a long-time official in the ministry. He previously served as the ministry’s research and development agency (Litbang) head, expert staff for economy and natural resources, communication, public information services and cooperation bureau head, and the directorate general’s bioenergy director.8
Meanwhile, Tutuka is a petroleum engineering professor who has conducted numerous studies on EOR. He met with the government and oil and gas players at the Coordinating Maritime Affairs and Investment Ministry office in December last year. During the meeting, Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan requested that oil and gas companies prepare EOR work programs.9
Tutuka did his master’s and doctoral degrees in petroleum engineering at Texas A&M University in the United States. Known for his competence in petroleum, exploration and exploitation10 , he is believed to have defeated a number of names for the oil and gas director general position, namely Ir. Agus Cahyono Adi MT, Alimuddin Baso ST, MAB, Dr. Ir. Eko Budi Lelono, Ir. Harya Adityawarman, Muhammad Ibnu Fajar ST, MSi, Dr. Ir. Patuan Alfon Simanjuntak MM, MKKK, and Prahoro Yulijanto PhD.11
A number of sources in the government said that Dadan’s appointment as renewables director general was not too surprising given the internal circle in the Energy and Mineral Resources Ministry. According to a source in the ministry, Dadan had been on the radar for a long time and was often mentioned by Arifin.
One of the considerations was that Dadan used to occupy several posts in the ministry. In addition, Arifin wanted the renewables directorate general to be led by an official from within the directorate. Compared with other names in the directorate general, Dadan's was the most prominent.
Dadan is the first staff member of the directorate general to occupy the position of director general. In the past, this directorate was one of the echelon II units under the electricity and energy utilization directorate general. Dadan's main task after being appointed is to complete the renewable energy presidential regulation.
Meanwhile, Tutuka was appointed as the oil and gas director general because he was considered qualified when he was the chairman of the Indonesian Association for Petroleum Engineers (IATMI). In his colleagues’ eyes, he is known as an ambitious figure. Tutuka is recorded to have nominated himself unsuccessfully to be rector of ITB four times. Before being selected as IATMI chairman, he had run for the chairmanship of the professional organization twice, also unsuccessfully.
"He has high determination even though he often fails," said a source. The source added that Tutuka was not a typical lecturer who "sought food through politics." Tutuka also prefers to distance himself from politically wired ITB alumni.
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