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Sele Raya Merangin Dua | Mr Juchiro Tampi
Mr Juchiro Tampi

For a growing company such as ours, innovation implemented through cooperation with international partners can prove to be instrumental in becoming more efficient

Mr Juchiro Tampi, President Director

PT Sele Raya is a well-established player in Indonesia’s energy sector with a current focus on upstream crude oil and gas. What more can you tell us about your company’s history and its main strategies going forward?

My father, Mr Eddy Tampi, founded Sele Raya in 1971 and he started the company as a seismic surveyor catering to businesses in Irian Jaya. We also served as a workover unit for offshore projects for multiple multinational energy companies such as Chevron, and in addition to this we also have a drilling division. From this foundation, in 1984 we evolved as a business to prioritize oil EMP exploration and production. With our upstream activities based at the Sembakung Oil Field in East Kalimantan, we were able to produce 4,000 barrels of oil per day. In 1992, we became involved in BWP Meruap, which has a peak production of 3,800 barrels per day.

Success in carrying out these projects and our growing reputation as a strong player in the upstream oil and gas industry contributed to us winning a contract from the Indonesian government in 2003 for three assets: the Merangin Dua Block, the Belida Block, and the Blora Block located in close proximity to Exxon Mobil Cepu. Until now, we have been concentrating on these three oil and gas assets, as well as pursuing diversification by entering the forestry industry and establishing a tin smelting facility. Through this strategy, we have sought to position ourselves as one of the fastest growing private oil and gas companies in the region, drawing upon our flexibility to find low risk assets with high upside potential.

How does Sele Raya differentiate itself from its competitors in the oil and gas sector?

In addition to an advanced ability to identify low risk assets, our streamlined organizational structure allows for an efficient decision making process that can prove crucial in the industry given that one day of drilling operations can cost upwards of $15,000 USD. We also offer an advanced understanding of the local market and take advantage of a level of expertise accumulated over the last four decades in the energy sector.

Indonesia’s crude oil industry has in recent years been seen as an industry on the decline, following the country’s transition from being a net exporter to a net importer. What is your outlook for the future of Indonesia’s oil and gas sector?

The current government already has the right idea and political will to increase Indonesia’s oil and gas production. However, we as a nation need to change that will into real action. The problem at the moment that we are facing is permits; it can often be the case that waiting for one drilling permit can take up to between three months and a year. Moreover, there are around 258 different permits for the oil and gas sector. We thus need to shorten the amount of time needed to obtain a permit to no more than two months, as well as cut down on the range of permit types to a more manageable number below 20.

Our outlook for the future also hinges upon the steps taken to address issues related to overlapping working areas between oil companies, coal companies, and plantation companies. The government needs to take an active role in helping the public and house representatives realize that the oil and gas industry needs to be prioritised because the split of oil production equity is 89% to the government and 11% to oil companies. Hence, there is no other industry in Indonesia that contributes more to the country and its ability to have a positive cash flow.

Sele Raya is positioned not only as a leading oil and gas company in Indonesia, but also as a company with an emerging presence on the regional stage. What can you tell us about your regional strategy and goals?

At the moment, there are only six oil companies in Indonesia that are actively producing: Pertamina, El Nusa, Medco Energy, Energy Mega Persada, Benakat Petroleum and Sele Raya.

With this in mind, my target for the next three years is to conduct an IPO. The capital generated from this public listing will be allocated towards our expansion beyond Indonesia and Asia.

Where does Sele Raya stand today from an innovation point of view in terms of furthering your field of expertise?

In the Merangin Dua Block, one of our partners used to be Shell Technology Ventures, from whom we benefitted from technology transfers. When this partnership ended in 2008, we sought to work with other multinationals and eventually began collaborating with Tata and Sinochem to ensure that we have access to the latest technology. For a growing company such as ours, innovation implemented through cooperation with international partners can prove to be instrumental in becoming more efficient. As an example, in the past drilling a 5,000-foot well would have taken us thirty days but with new technology we were able to cut this down to twenty days.

Can you elaborate upon your plans to diversify into the forestry industry?

At the moment, forestry companies in Indonesia still view wood plantations as a means to manufacture plywood, and see plywood as a means to make furniture. Sele Raya goes beyond this as an energy company that understands the importance of finding viable sources of renewable energy. It is our plan to move into wood pellet energy - one of the cleanest forms of energy currently available that is already used in developed markets such as Korea, Japan and Europe.

How is your company positioned towards further cooperation with foreign investors and international partners?

As a growing company, we are always open to new joint ventures with multinational entities. This encompasses the oil and gas sector as well as opportunities in the non-oil and gas sector. We are most interested in working with partners able to expedite our expansion into Indonesia’s eastern areas where there exists an abundance of offshore resources. As an established local player, we offer a wealth of knowledge and stability to those looking to enter Indonesia. In return, we would expect to work with a partner able to provide the latest technology and bring in new ideas and geological concepts that we can adapt to the local market.

Prospective partners should be aware of our goal as a company to produce 20,000 barrels per day by 2020 and become a brand name recognized across Asia Pacific.

As a final message, what would you like our readers at Global Business Guide Indonesia to remember about your company?

This is an excellent period of time for foreign investors to invest in Indonesia. Sele Raya Group itself has already diversified and is intensely investing in forestry, palm oil, tin and the hospitality industry. Our new government is determined to work harder and with more transparency to reach 6.5% economic growth next year. The construction of new infrastructure projects will go a long way to meeting this target, as will investing in education and the ‘mental revolution’ to improve upon the skill level and productivity of Indonesian professionals.

Global Business Guide Indonesia - 2015