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Spescial Interview
11-02-2015
Dirgo D Purbo: Govt should focus more on national interests

Of the many oil experts, Dirgo D Purbo is a living dictionary. The man popularly called as Dirgo, has also paid more attention to other strategic issues, especially in terms of the national interests. "Let us awaken the spirit of Indonesia's national interests," said the former Deputy Secretary General of the National Security Council (Wantannas).


His outstanding and clear views related to the issues of oil, are insparable from his background for having worked for a dozen years in several multi-national oil companies. One of which was in 1990. In the time he worked in PETRCORP-Fletcher Challenge, a New Zealand-based oil company.

He was of the opinion that if talking about energy and food, Indonesia should refer to theso-called 3G, namely: geopolitics, geostrategy, and geoeconomics. "These three aspects should always be our consideration  as a country, no matter who governs it," said the graduate of New York Institute of Technology, USA.

According to him, the three elements (3G) should be used as tools to esablish economic policies in the country in addition to establishing security and defense ones in the country and abroad.

The author of "Geopolitik Perminyakan (The Geopolitics of Oil) said oil has the aspects of national security and foreign policy (foreign policy) of a country. "If we talk about oil and gas business, the most fundamental thing we must understand is the strength from upstream to downstream as vertical Intergration. It's basic. Well, the understanding of the so-called vertical integration means whoever controls the crude oil, controls anything under it," said Dirgo.

While lighting his cigar, Dirgo continued, "Today, Indonesia only has the ability of producing national oil of 800,000 bpd. To meet the needs of domestic consumption we have to import from more than 16 countries in a combination of crude oil and fuel amounted to 1.6 to 1.8 million bpd. My 10-year-ago prediction has came true, the increase in consumption by 5-8% per year has now reached 2.5 million bpd. With a consumption of 2.5 million bpd, Indonesia has become one of the 10 countries having the effect of triggering the international oil price."

It is time for Indonesia to launch a strategy as a solution to deal with various problems related to the national petroleum business. Dirgo said  there are three aspects that must be addressed as a strategic move by the government, namely: legality, net oil importer and national stock.  Firstly, in the realm of oil and gas the most important entry points are, especially the aspect of legality, and then exploration, exploitation and tax. Oil companies are very related to a contract. If in the contract it is called a, b, c, d - the oil companies are sure to follow the contract and could not get out of it. Just how after signing the contract the government has to protect and guard the oil companies to the location and produce oil. When I compare Indonesian oil and gas law with Malaysia and Vietnam, I see there is no a significant difference. The difference is only in the tax and financial scemeS. Well this is the great of Indonesia, in which it has been the most difficult, complicated and rambling but there have been some 276 oil and gas companies "operating" though not all are aggressive. What does it mean? Indonesia is very attractive right! So Indonesia must have a  crear, hard and firm oil and gas law that is based on the spirit of Act No. 8 of 1971 so that Indonesia will become oil state company along with its  Pertamina.

Secondly, Indonesia should declare itself first as a net oil importer. Since 2004, Indonesia has already been predicted to become a net oil importer. Unfortunately it was never echoed, even as if we are ashamed of being a net oil importer. Though most of the G20 countries or industrialized countries are net oil importers. We take a positive course that net oil importer is a symbol of the prosperity of a nation, he said with a smile. For that reason, Dirgo warned that when a country has been categorized as a net oil importer, it should have designed a grand national strategy, especially energy security.

Thirdly, Indonesia must fill the national stock. "Let's not talk about crude oil anymore, because it is impossible to speak of it. We need to address the  national stock first, by filling some 460 depots in Indonesia. Because the national stock of fuel means a symbol of the nation's economic and defense strength. Never ignore this, "said the founder of the Center of Strategic Studies for the National Interest (PASKAL).

Amid clouds of cigar smoke, Dirgo said there is one more thing we need to do as a scheme to address our oil trade dependence, that is by building the spirit that the results of our earth has to be paid with our currency. It is not difficult. Let Bank Indonesia (BI) determine the mid-rate. When we simulate, for example, today the production of 800 thousand barrels, has already been booked by the buyer. If you want to lifting you must pay with rupiah amounted to Rp 12,000 times 800,000 barrels, approximately 10 billion. The value is to be paid by oil companies for the booking of oil per day. Tomorrow there are more buyers, they should pay like that. What will happen? The buyer will be confused for having to look for rupiah. Of course there will be a rush to the demand of rupaih which will strengthen the exchange rate. This is one of the efforts to fight for our national interests, he said.

"Imagine! now the position of Indonesia must prepare USD 110 million per day. Where should we look for? Imagine the price of oil has been played, the exchange rate ahs also been played - obviously those who will get more profits are traders in Singapore who already understand the needs of Indonesia, Dirgo said.

As an energy security expert, Dirgo knew how fragile the state sovereignty is. He pointed out that Indonesia has to import oil from Algeria. Although the tanker from Algeria to Indonesia is by using ships owned by Pertamina. However, he regretted for the monitoring was not guarded by the national military (TNI), but guarded by Sri Lanka troops. "This should not happen. It should be monitored by our military, because this is a symbol of the nation's sovereignty or resilience. People pay taxes to keep the symbol of our sovereignty," said Dirgo.

When asked about fuel subsidies, Dirgo directly interrupted, "the fuel subsidy is clearly nothing. Because Indonesia has become a net oil importer. People has never enjoyed fuel subsidies. The subsidies are only a political language on the surface. I am more inclined to interpret it by building subsidized petrol stations in bus terminals or building gas stations in markets and fish market, "he added.

According to Dirgo, economy is related to energy, transportation, oil and fuel. And if you want to build an aqua culture, there should be three elements, namely ships, nets and solar. "No solar, what is its power. Talking about maritime power, where its its solar. Foreign (parties) have  seen Indonesia. You want to build anything, if its fuel is nothing, what can you do? The key is the solar," he said.

As the man consistent with the national interests, Dirgo boldly stated that Indonesia is a superpower. His statement was once made while giving a lecture in front of senior military officials. But it was 'questioned' by the attendees. Finally, he also provided a straightforward explanation. "What have we done (Indonesia makes defense pacts with other countries. The US has also made defense pacts with all countries. All this is due to we do not have energy security and we do not prioritize the needs," he explained.

In regard with plans of taking over the Mahakam block by Pertamina, he gave a positive appreciation, saying it is the best step and should have been taken. Dirgo believed Pertamina will be able to manage the Mahakam block and it should no longer extend its cooperation contract with Total E & P Indonesia (France) and Inpex Corporation (Japan). "Indonesian people can do it. Technologically there is no problem. Oil industries in Indonesia could operate up to 100 years. Those who manage the oil from A to Z now are Indonesians. Never stunt our people in the management of oil from a to z," he said.

Besides, according to Dirgo, Pertamina instead does not understand the issue but the state-owned enterprise is in a battered condition. "World  companies should learn from Pertamina. Pertamina was owed trillions by PLN, the TNI and Garuda. Pertamina must distribute the international oil price and it is purchased and distributed at subsidized prices. Is there a company like this?," Dirgo said proudly.

What stated by Dirgo related to Pertamina has reminded us of the statement made by the Great Commander General Sudirman, "..... trust the strength of your own nation." That's how we as a nation should take sides and be proud, for the sake of national interests of the Republic of Indonesia. (Rusman / Murnia Tanuwijaya)

*It was previously published in NUSANTARA tabloid Edition 2



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