The upstream oil and gas industry continues to commit to empowering local entrepreneurs. In doing so, one of the concrete efforts made by the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and Contractors of Production Sharing Contracts (PSC Contractors) of Java, Bali and Nusa Tenggara Region (Jabanusa) was by conducting Vendor’s Day on 27-28 July 2017 in Malang, East Java.

In his speech, SKK Migas’ Deputy for Procurement Management, Djoko Siswanto said that SKK Migas and PSC Contractors are committed to using local goods and services. On the other hand, SKK Migas expects entrepreneurs (vendors)’ active cooperation in creating quality domestic products, competitive in price, and timely in delivery. “This effort will optimize multiplier effects to the upstream oil and gas industry on the national economy,” he stated on Friday (28/7).

Djoko Siswanto further explained that the global upstream oil and gas industry is currently facing a serious challenge, that is the unstable global price of crude oil. It remains affected the upstream oil and gas operations. In order to take on such challenge, it is required to increase the local content of goods and services procurement and to change the pattern of utilization of goods or services from import into local use.

“An example of prioritizing local content is the Masela Project that changes from offshore to onshore so as to improve the local capabilities of Maluku,” Djoko Siswanto said.

The Vendor’s Day event conducted annually aims to provide new knowledge to vendors of PSC Contractors in the procurement of goods and services in the upstream oil and gas industry. The event primarily relates to the currently applicable regulations, and provides training for the fulfillment of these regulations, as well as extends appreciation to local vendors who have delivered their best performance.

In general, the event consists of two agenda items. The first day is dedicated for sharing information on the regulations, and a moment of appreciation. The second day is dedicated for training to improve the vendors’ capacity. This year, the vendors are given a general overview of the Regulation of Procurement of Goods and Services as outlined in SKK Migas’ Administrative Procedure Manual (PTK) 007 Revision 4, Local Content policy, as well as customs aspects to goods for petroleum operations, and bonded logistics centers. Subsequently, the vendors are provided with training on centralized integrated vendor database (CIVD)  and direction on how to fill in local content, and they must participate in e-procurement.

The event was attended by approximately 250 local companies from East Java which became vendors of eight PSC Contractors of the Jabanusa region, namely JOB Pertamina-PetroChina East Java, Pertamina EP Cepu, PHE WMO, Petronas Carigali, Santos, Kangean Energi Indonesia, HCML and Lapindo Brantas.

SKK Migas’ Head of Goods and Services Procurement Management Division Erwin Suryadi explained that the basic concept of change in the PTK 007 revision 4 is the acceleration of tender process, efficiency of supply chain and obligation to use domestic products. SKK Migas encourages the parties involved in the procurement of goods services to be more efficient and competitive in order to survive in the current condition faced by the upstream oil and gas sector.

“The joint synergy among supporting industries, PSC Contractors and SKK Migas is needed to address the challenges faced by the upstream oil and gas industry,” Erwin added.

SKK Migas’ Manager of National Capacity Empowerment, Bayu Murbandono re-emphasized the importance of SKK Migas’ and PSC Contractors’ programs to support the obligation to use domestic products. The programs include joint assessment and product evaluation so that PSC Contractors and the supporting industries are more confident in the capacity of domestic products to support upstream oil and gas operations.

Bayu thinks that events like Vendor's Day are not only held in the Jabanusa region; instead, a similar activity will also be conducted in other upstream oil and gas operation regions. “The goal is to achieve and maintain efficiency and benefits in the procurement of goods and services in the upstream oil and gas industry,” Bayu concluded.