Low Probability High Consequences Oil Spill Response Plan: Promoting
Cooperation and Networking Emergency Respond
I Gusti Suarnaya Sidemen
Good morning. It is an honor for me to be here to participate in the Petroleum Oil
Spill Workshop 2017 hosted by Petroleum Association of Japan. Before I started mypresentation, on behalf of Directorate General of Oil and Natural Gas of the Ministry ofEnergy and Mineral Resources of the Republic of Indonesia, I would like to extend ourthank to Petroleum Association of Japan for inviting us to join this very important forum.

Oil spill is the risk that our society should deal with in modern life. The impact ofoil spill could be devastating. In addition is almost impossible to remove oil spill risk fromour life. There are a lot of effort has been in place to reduce oil spill from oil and gas
production or crude oil transportation. We witness the continuous global declining trend
both on the number and volume of oil spill. However, we still witness a major oil spillsuch as Macondo and Montara oil spill. I believe form the PAJ annual workshop wecould learned together and to seek collaborative effort to improve our capacity inmanaging oil spill disaster. A low probability with high consequence accident.

I will share my view on we improve Low probability high consequences Oil spill
respond plan. Main focus will be how cooperation and networking emergency response
will work better in the future.

I will start by elaborating potential risk of oil spill in Indonesia and explain theexisting emergency response strategies. Growing demand on energy especially oil,lead Indonesia moving to explore and produce oil and gas from deep water in Easternpart of Indonesia as oil fields located in shallow water in western part of Indonesia going
to be mature. More remote location and deep water will certainly change thecircumstances on how oil exploration will be conducted. The changing in circumstancelead the changing in potential risk of sources of oil spill. After explaining the changing
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circumstances then the new imperatively more appropriate oil spill response strategy
will be discussed.

There two condition that determines the risk of oil spill in Indonesia. First, the roleof oil in Indonesia energy supply and demand. Indonesia oil demand is projected toincrease from 425 million barrel 2015 to 625 million barrel in 2025 to 700 million barrel
by 2030. Oil demand mainly growing in transportation, commercial and industry.
Growing demand of oil will be translated into more domestic exploration and production,
increasing refinery capacities and more crude and oil product transportation.
Indonesia’s refinery capacity expected will increase by 300 MBOPD in 2021. Anotheradditional capacity expected come on stream by 2025. By 2050 Indonesia refinery
capacity projected to be doubled form current capacity.

To meet current oil demand, Indonesia produces oil from 29 domestic producing
fields. 40 percent of 860 MBOPD produced oil come from offshore fields located inoffshore North West Java, Offshore North East Java, Natuna Sea, Macassar Strait, andPapua. Currently, about 40% of produced from domestic field exported. While to meetdomestic demand Indonesia import crude oil about 140 million barrel and import fuelproducts about 27 million kiloliter.

Domestic refinery nameplate capacity is 1.050.000 BOPD distributed in 5 major
refineries located in Cilacap, Balongan, Balikpapan, Dumai and Plaju and several small
refinery such as Sungai Pakning, TWU in Tuban, and Kasim.

Fuel products distributed around Indonesia to 109 fuel depots with 49 oil tanker.
Among 49 tankers, 10 are small tanker (1500-3700 MT DWT), 12 small of 6500 MT
DWT, 6 General purpose tanker (15000-17000 MT DWT), 12 medium tanker( 30.000-40.000 MT DWT) and 9 large oil tankers (88.000 – 107.000 MT DWT).
Indonesian water, especially that part of the Malacca strait, Sunda strait sea laneand Lombok strait sea lane are the main passages of international oil transportationfrom producing country in Middle East, Africa and Australia. Currently, According to the2survey launched by Nippon Foundation and the Institution for Transport Policy Studies
about 127,000 vessels passed Malacca/Singapore straits in 2012, and the oil tanker
shared 6.5% of it or about 8,300. Capacity of oil tanker pass through Malacca strait
usually 1.1 Million Barrel. While VLCC tanker will travel Sunda Strait and Lombok Strait.

The second factor is the fact that Indonesia is an archipelagic state.

It’sextending 5,120 kilometers from east to west and 1,760 kilometers (1,094 mi) from
north to south. The land area is about 1,919,317 square kilometers distributed in 17.508
islands with total 99.000 km coastal line. While the water area is about 5 million
kilometer square in which includes 93,000 square kilometers of inland seas, territorial
sea and exclusive economic zone. The geographical nature of Indonesian water put it
on rich in biodiversity. It host mangroves, sea grass, coral reefs and hundreds fish
species. It richness also put Indonesian water venerable from oil spill.

There was several notable tanker accident in Indonesian water such as Showa
Maru in 1975 that spilled 54.000 barrel crude oil, Todutsu in 1978 that spilled crude oil
293.000 barrel, Nagasaki Spirit and Ocean Blessing 1992 spilled 100.000 crude oil.

Oil spill response and preparedness in Indonesia started not along after offshore
oil operation. Although awareness of oil spill in refining could be traced back to 1904
when the first Indonesian refinery was built by Shell. In 1973, after the first oil production
from offshore field known as Cinta field in North West Java and increasing activities ofexploration and production of oil offshore area stimulated the promulgation of Ministerof Mines Regulation No. 04/P/M/1973 regarding Prevention and Mitigation of Marine
Environment from Oil and Gas Exploration and Production. Under the regulation,companies conduct exploration and production in Indonesian water is obliged to have oilspill response plan in place. The oil spill responses consist of recovery equipment,
trained personnel and reporting mechanism.
The requirement to have oil spill emergency response emphasized again in
Government Regulation No. 17/1974 concerning Supervision of offshore oil and gas
activity and Government Regulation No 11 / 1979 concerning Refinery Safety.

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Experiencing detrimental impact from Showa Maru and Todutsu oil spill in 1975 and1978 respectively, Government of Indonesia issued Joint Decision/Regulation between
Directorate General of Oil and Gas ( DGOG)

and DGSC: DKP/49/1/1 No.

01/KPTS/DM/MIGAS/1981 Permanent Procedure concerning Protection of Strait
Malacca again Pollution. The regulation stipulated collaborative action among
stakeholder to response oil spill in Malacca strait.

Oil spill responses in oil industry both upstream and downstream are evolving bythe promulgation of new Oil and Gas Law in 2001. Each oil companies mandated toprepared oil spill response plan and submitted it for approval to Ministry of Energy andMineral Resources. In practices the response plan developed together between theMinistry and Oil companies. During the preparation every oil

spill scenario will beidentified. Risk based responses will be determined based on sensitivity of the area,
trajectory or oil spill movement and possible sources of spill. Containment equipment
are required to deal with foreseeable worst case spill scenario. Pre-approved dispersantconsidered as a tool in mitigating impact of the spill.

Considering growing risk of oil spill for sea transportation and oil production
Government issued President Regulation No. 109/2006 concerning Emergency
Response to Oil Spill in Indonesian Water. The regulation is to facilitate stakeholder’scoordination in responding oil spill. Oil spill response tiered into three tier local, regionaland national. The regulation mandated regional government to set up tier 2 emergency
response. Tier 3 oil spill will be handle by National Response team headed by Ministerof Transportation with Ministry of Environment and Ministry of Energy and Mineral
Resources and related institution as a members. Regular exersice conducted to test thereadiness of emergency response. Exercises are conducted for tier 1, 2 and 3.

SKKMIGAS special task force under the Ministry of Energy and Mineral
Resources issued Guidelines for upstream oil companies to set up cooperation among
the companies in the adjacent working area. The guidelines provide direction for mutualagreement to assist each other in need.

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In 2013, Ministry of Transport Issued Minister Regulation No. 58 concerning Oil
Spill preparedness in waters and port/terminal. It cover oil and gas terminal. Under theMinister Transportation’s régulation emergency response of oil and gas terminal jointly
developed between Ministry of Energy and Mineral Resources and Ministry of Transport
and the cpmpanies.

In case oil spill escalate to tier 3 where oil companies, regional emergency
response team could not provide an appropriate responses a tier 3 National Emergency
Response Plan will be activated. Oil spill response ships owned and operated by Portauthority under auspices of Ministry of transport will deployed, in addition all availableresources will be used. Regional and International cooperation will be requested ifneeded.

In addition to oil companies, refineries, ports and terminals who developed tier 1
emergency response there are several private oil spill response organization who
developed its capacity in oil spill equipment, personnels and experiences in combating
oil spill. Oil spill Combat Team (OSCT) is the leading private sector in the area. The
private companies built capacity to be able to provide service in various aspects of oil
spill to industries including oil industry and petrochemical. The company not only
provide it services to Indonesia but also overseas. The other companies is LeadershipIndonesia with smaller capacity and competency.

Existing oil spill responses found work quit well in dealing tier 1 oil spill. Oil spillcame from pipe line leak, fail in loading, collision etc. However, we have no experiencein dealing with tier 2 or 3 oil spill accidents.

Our effectiveness is responding oil spill may be in question as the circumstanceof oil industry changing. Indonesia offshore oil industry is moving to deep and deeper
water, as the conventional oil fields in shallow water is mature. The deep water oil
production era in Indonesia started in 2013 when West Seno oil field went on stream.

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The production from oil field 1000 meter below sea level employed Tension LegPlatform and Floating Production Facility. Another deep sea field went on production in2017 is Jangkrik field located in water depth more than 400 meter. The next deep waterproduction will Krueng Mane field located in 650 meter depth offshore North Aceh,Gendalo, Gehem, Ganal and Rapak fields located in 1000 m – 2000 meter water depthin Makassar strait.

Indonesia share the global trend of oil exploration and projects going to deepwater (125-1500 meter) and ultra-Deepwater (more than 1500 meter).

This changing circumstance is likely increase the tier 2 and tier 3 oil spill risk as
experienced by the USA, Australia and Brazil.

Currently we experiencing more severe weather as a result of climate changes
that may also contribute to the growing oil spill risk. Early of this month severe weather
just caused problem to the mooring system FPSO MV 8 at Langsa Field in Aceh.
Fortunately, we successfully prevent oil spill. Oil spill response team was deployed to beready in case the situation become worsened. Recently the weather also caused toproblem to Japan’s flagged MV Centaurus Dream when the ship approaching the port inwest Java. The weathers impact to oil and transportation industry could be increase inthe future.

In term of international oil trade Indonesia especially Malacca strait, Lombok
Strait and Sunda strait will continuously become main passage of oil flow from Middle
East, Africa and Australia to East Asia. Projected doubled demand of oil in Indonesia
will increase fuel traffic around Indonesian waters. This situation strongly suggest thatoil spill risk is also growing.

Internationally, we observes the declining oil spill in oil industry in USA, UK orEurope. Low oil price lead to growing pressure to oil companies to operate more
efficiently. Emergency response capability to deal with oil spill considered as low

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probability to happen could become a victim of improving efficiency. Oil Company may
leave emergency oil spill preparedness to consultants or government institution.
Those changing circumstances need new strategy in regulating and developing
oil spill response plan. Experience from Montara and Macondo strongly indicated thatavailable seemingly workable emergency response was fail to response real situation.
The problem is not that there is no capacity or technology available. But, more likely on
how industry perception on risk, communications and coordination. The development of
new technology need to be assessed thoroughly to ensure risk are appropriately
identified and mitigation toll are prepared. The development of new technology such as
underwater dispersant, well capping is in need. Complexity of system such as
production system, logistic system lead to the need of complex response. In thiscircumstance, single effort from government o companies will be not effective. All
stakeholders need continuously do our utmost to prevent oil spill ad its impacts.
Indonesia has embarked to this new circumstance. A new strategies to response oil spillfrom new circumstance is needed. We seek collaborative work on this endeavor.

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