With the globalization effect impact almost every county in this world it is now more clear the race between countries to create energy security for each nation’s interest. China currently imports about 60% of their oil demand from foreign source such as Africa and Middle East. Indonesia now also faced almost the same challenge, oil import of an average 400,000 barrels of crude oil and 400,000 barrels of oil fuels from the Middle East. It is not arguable anymore the important role of Indonesia’s energy diplomacy.
Indonesia’s energy diplomacy is not a traditional protocol and consular activity conducted by the Ministry of Foreign Affairs. It is on a broader dimension involving Pertamina, Ministry of Energy and Mineral Resources, BP Migas, and other non state actors such as Medco, etc. It is now also have a greater impact the role of big energy multi-national companies such as Exxon, BP, Shell, and Chevron. This article will focus on how the Government of Indonesia policy towards energy security. The foreign policy of energy in Indonesia is carried out by the energy diplomats of Indonesia.
The role of an energy diplomat mainly focused to build image of national energy capacity and also as an active promoter and tough negotiator on energy issue. A good negotiation has to be built in the future so a good contract could be made for the betterment of Indonesian people. Indonesia currently not in a favorable position in energy sector related with foreign investment. Take a look at some examples like Tangguh LNG, Donggi Senoro or Exxon Cepu.
Tangguh LNG has some few issues such as (i) The contract to sell gas to China with upper limit price (3$ mmcfsd) so the price of Tangguh’s gas couldn’t follow market price mechanism. This is a long term contract also. (ii) Frankly, Pertamina and Elnusa have the capability to operate Tangguh LNG. The case in Badak LNG proves that Indonesian company could operate such facility. (iii) One of the reasons BP sell Tangguh gas to China is supported with the fact that BP have its branch in China (syndicate).
Concerning Tangguh LNG, actually this is not the domain of Ministry of Foreign Affairs again because Tangguh already in production phase. But as a diplomat, it is obligatory to protect national interest. In writer’s personal view, this obligation could be translated in promoting Indonesia to the right investor. In order to know which one is right, diplomats have to know about national energy situation first. From the regulation until the daily practice of energy sector in Indonesia.
It is highly advisable for Indonesia to start to engage nations like Venezuela, Russia and Iran and start to make less dependence on industrial countries like America and the European Union. This makes room for diplomats to act as a bridge builder between big industrial and oil importing countries such as China and United States with oil and gas exporting countries such as Venezuela and Russia.
The function of Indonesian diplomat abroad is to do a thorough market research so the product of Indonesia’s energy could get the right buyer abroad, especially our coal and gas product. The diplomats also have to play a role of creative opportunity seeker to seek good prospect in technical partnership on energy issue, mainly in renewable energy. Indonesia is in an interesting country for foreign investment in renewable energy, especially geothermal.
Approximately 40% of world’s geothermal potential is located in Indonesia, added to it is the value of 35% Indonesian people who still haven’t got access to electricity. This will attract foreign investor to develop geothermal plant in Indonesia. Foreign fund is still needed in this area considering the high investment cost (to create one Mega Watt electricity is equal to approximately 3 million USD investments). The rapid growth of Indonesian people is causing rapid growth on energy consumption. With the population around 200 million people, Indonesia is clearly a big energy market. Indonesian diplomats clearly have to play a role as a confidence builder so foreign investor want to invest in Indonesia, especially for energy infrastructure. This effort already resulted in foreign company invested in geothermal plant like Chevron in Darajat plant.
According to the Article 4 of Act no 37 year 1999 regarding International Relations, Indonesia’s energy diplomacy should be creative, active and anticipative, be strong to defend national interest but flexible enough to attract foreign investment. That’s why it’s now a need for Ministry of Foreign Affairs, Pertamina, Ministry of Energy and Mineral Resources and other related government’s institution to build the capacity of future Indonesian energy diplomats.

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