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Indonesia’s Ministry of Finance introduces Geothermal Drilling Program

Drilling rig on site at Tulehu, Indonesia (source: PLN)
Alexander Richter 18 Sep 2019

To encourage investment and speed up geothermal development, Indonesia's Ministry of Finance is introducing a geothermal drilling program that would take early stage risk.

As reported today from Indonesia, the country’s Ministry of Finance is preparing a risk mitigation facility through a geothermal drilling program to encourage exploration and investment into geothermal development.

“This program assists the government in new well exploration which is currently considered costly and risky,” Director General of State Wealth, Isa Rachmatarwata said in a discussion in Jakarta.

The private sector remains reluctant to invest in geothermal development due to the risk of exploring for geothermal resources.

The government has now prepared a Government Drilling Program that aims to mitigate risks in each of the activities of exploration.

The program involves three special mission vehicles of the Ministry of Finance, namely PT Sarana Multi Infrastruktur (SMI), PT Geo Dipa Energi, and PT Penjaminan Infrastruktur Indonesia (PII).

The three entities will adopt applicative approaches and industrial governance in the explortaion for geothermal energy resources, so Antara News. This includes planning, budgeting, procurement, operation and the execution.

Following the discovery of resources, they could then be offered to investors interested in developing geothermal projects in the country.

“When a well is found and is economically sufficient to generate electricity, it will be offered to parties that are willing to conduct explorations,”, so the government. How much of the exploration will be covered by the government under the scheme is unclear, but it can be assumed it only includes only a limited amount of exploration.

“This does not mean that private companies are not allowed to find energy sources. They can do it but their numbers are not large if not zero. The government is willing to take the initiative to attract investment and help speed up development.

Similar news last week, talked about that “Exploration has been carried out in Wesan, East Nusa Tenggara, and subsequently in Jailolo Halmahera Barat, North Maluku. The drilling was funded by the government after that, and then auctioned off to the developer,” said Director General of New, Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources, FX Sutijastoto.

Source: Antara News, Antara News (10 Sep. 2019)