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from the Chairperson of Purnomo Yusgiantoro Center

In the last couple of months, several events have been successfully held by Purnomo Yusgiantoro Center (PYC), building upon PYC vision to serve as a leading center in energy and natural resources.

Following our last research collaboration with the Indonesia Defense University (UNHAN), it comes to an end by holding a seminar on the study of “The Impact of Seabed Maritime Infrastructure in Natuna Sea of Indonesia on National Security” in Nusantara Hall, Urip Sumoharjo Building, Ministry of Defense of the Republic of Indonesia. The seminar was also attended by the Minister of Defense of the Republic of Indonesia. The result was presented and in hope that the research output could provide a new perspective of seabed maritime infrastructure to stakeholders and increase both investment and national security in the near future.

Our first conference, PYC International Energy Conference (IEC) 2017, has been held successfully and attracted hundreds of participants with various backgrounds. The conference was attended by Mr. Ignasius Jonan as the current Minister of Energy and Mineral Resources of Indonesia, Prof. Boediono and other professionals with diverse arrays of background and nations. IEC held parallel sessions from the chosen submitted research paper and conduct competitions to attract young generation in a particular topic of sustainable energy in developing countries.

PYC has also launched a journal entitled Indonesian Journal of Energy (IJE). This journal will cover a wide range of energy topic and aiming to become an authoritative source of information, review, analysis, and evaluations in a complete gamut of the energy field.

Coming to the end of the year of 2017, we would like to extend our warm “thank you” to all contributors for the help and support in PYC’s program. This year was a very successful year for us as a numerous events were held and as shown in our Kaleidoscope 2017. We were able to exceed our goals, expand our program and partnership because of some tremendous contributions and supports from those who shared the same goals with PYC.

Lastly, on behalf of Purnomo Yusgiantoro Center, we wish you all a very happy holiday and looking forward to a more continued success in 2018. This New Year may we continue to share the genuine fellowship that adds happiness and warmth to a better of Indonesia’s energy and natural resources future.





The Minister of Defense of the Republic of Indonesia, General (Retired) Ryamizard Ryacudu delivered his speech as a keynote speaker

On October 10, 2017, Purnomo Yusgiantoro Center (PYC) with the Indonesia Defense University and Bandung Institute of Technology held a joint research seminar on the study “The Impact of Seabed Maritime Infrastructure in Natuna Sea of Indonesia on National Security” in Nusantara Hall, Urip Sumoharjo Building, Ministry of Defense of the Republic of Indonesia. The seminar was attended by the Minister of Defense of the Republic of Indonesia as the keynote speaker.

Research reports presented by Rear Admiral Dr. Amarulla Octavian as the leader of the researcher team. The seminar was also attended by Dr. Arif Havas Oegroseno (Deputy of Maritime Sovereignty of The Ministry of Maritime Coordinator), Dr. Bebeb Abdul Kurnia Nugraha Djundjunan (Director of Political Agreement of The Ministry of Foreign Affairs) and Dr. Andi Widjajanto (Academician and Defense Science Expert from University of Indonesia) as responders of the research results.

The seminar was opened by the Rector of Indonesia Defense University, Lieutenant General Dr. I Wayan Midhio, Mphil. In his opening speech, he said that in this study involving multidisciplinary and cross-institutional experts. This research has benefits for the development of state defense programs in Indonesia's foremost areas such as Natuna. Mr. I Wayan Midhio hopes that this research can benefit the government and relevant stakeholders.

The Minister of Defense, General (Retired) Ryamizard Ryacudu in his speech stated that Indonesia has a unique and strategic geographical position because Indonesia is the world's largest marine state that lies between two oceans and two continents. Therefore, Indonesia has an interest in looking at the development of situations that threaten world peace and stability in the region to take concrete and solutive steps and becomes the security interest of other countries. Minister of Defense hopes this research can provide input to various stakeholders related to maritime-based marine infrastructure issues to develop policy instruments that can increase investment but also consider national security.

Dr. Arif Havas Oegroseno in his response to this research delivered that currently worldwide means of communication almost 98% use submarine communication cables. But in this case, Indonesia is the fourth-ranked country in the world with the longest duration in the granting of submarine communication cables license. He also added that Natuna region consists of two areas namely archipelagic waters and territorial sea. The United Nations Convention on the Law of the Sea (UNCLOS) 1982 has arranged for the deployment of Sea Cable Communication System. So for example, if a country wants to install seabed cables passing through the Natuna Sea, it must first apply to the Indonesian government following  Article 51 paragraph 2 UNCLOS 1982. 

Followed by a response submitted by Dr. Bebeb Abdul Kurnia Nugraha, he said that an understanding of how the recommendation on diplomatic relations between Indonesia and Malaysia is needed. Thus research results should also be involved in taking this particular perspective.

Dr. Andi Widjajanto highlighted that there should be attention to three perspectives to see an infrastructure in Indonesia. The first perspective is a commercial or business to business perspective (B to B). Approximately 85% of infrastructure in Indonesia is commercial infrastructure category. The second perspective is the critical infrastructure or the national vital object category. The last perspective is the infrastructure as a component of defense. When the maritime infrastructure of the seabed is defined as a component of defense in this study, the militarization becomes important as the ability of the nearest bases makes the infrastructure serve as defense strategy and tactics. On the other hand, there are some things and conditions that must be considered when going to improve an infrastructure into a component of defense (securitization process). The process should also be considered in order not to interfere with commercial and business.



From left to right: Mrs. Filda Yusgiantoro (PYC Chairperson), Prof. Boediono (Vice President of Indonesia from 2009 to 2014), Mr. Ignasius Jonan (Indonesian Minister for Energy and Mineral Resources), Prof. Purnomo Yusgiantoro (PYC Founder) opened the conference

Purnomo Yusgiantoro Center (PYC) International Energy Conference 2017 covered wide-ranging discussions on various topics within the energy sector. It successfully attracted hundreds of delegates which embodied a diverse array of backgrounds, from the student, lecturer, business professional, and researcher. The conference was one day long, taking place at Sari Pan Pacific Hotel in Jakarta on November 30, 2017. The theme of the conference highlights the sustainable energy development as the center of the discussion, particularly in the case of developing countries.  

The conference was opened by the speech from His Excellency (H.E.) Mr. Ignasius Jonan as the current Minister of Energy and Mineral Resources of Indonesia. In his remarks, H.E. Mr. Ignasius Jonan provided insights into renewable energy and national electrification status in Indonesia. H.E. Mr. Ignasius Jonan also discussed some upcoming renewable energy projects in Indonesia including wind power plants and sea/ocean power generation. The opening speech was then followed by a keynote address from the eleventh Vice President of Indonesia, Prof Boediono. Through the address, Prof Boediono emphasized the importance of sustainable energy as a part of the development agenda. Prof Boediono also elaborated two major factors in meeting sustainable energy in the future including improvement in energy efficiency and focus in the development of renewable energy.

The conference continued with the plenary session that hosted speakers from various backgrounds. The line-up of the panellists included Prof Armida Alisjahbana (Director of the Center for Sustainable Development Goals Studies, Universitas Padjajaran and Indonesian Minister of National Development Planning from year 2009 – 2014), Prof Akiko Yamanaka (Senior Diplomatic Fellow at Central Asia Forum Cambridge University, Former Vice Minister for Foreign Affairs of Japanese Government and Former Special Ambassador for Peacebuilding of Japan) and Mr Andrew Shaw (Economic Counsellor of the US Embassy for Indonesia). The session was chaired by Dr. Havas Oegroseno (Deputy Minister of the Coordinating Ministry of Maritime Affairs, Indonesia). The remarks from the panelists covered a wide range of discussions including energy as a part of UN’s Sustainable Development Goals (SDGs), the non-traditional security perspective in viewing the energy development as well as energy cooperation between countries, particularly Indonesia and USA.

The conference also hosted several parallel sessions that discussed various topics under the theme of sustainable energy. Parallel session 1 mainly covered topics in the renewable energy technology, energy poverty, and electricity sector and was attended by Dr. Matthew Dornan from the Australian National University (ANU) as the reviewer. Topics such as 1) energy decarbonisation in Bali with solar photovoltaic technology 2) the electrification planning in rural region of East Nusa Tenggara province using renewable energy 3) hydrogen production from banana waste and 4) cutting-edge energy policy development in the reflection of energy access provision challenges in Indonesia were presented in the parallel session 1.

On the other hand, the parallel session 2 focused on the research revolving around themes of oil and gas for sustainable development, energy geopolitics, and policy. The session was attended by three reviewers, Dr. Evita Legowo from Swiss German University (SGU), Indonesia, Dr. Luky Yusgiantoro from PYC, Indonesia and Dr. Elena Reshetova from National University Singapore (NUS), Singapore. Topics of the research in the parallel session 2 included: 1) the role of oil and gas industry for sustainable development in Cirebon, 2) price linkage investigation between Asian LNG Spot and Far East Asian LNG and its implications, 3) analysis of energy consumption, income and price interactions, and 4) the statistical analysis of commercial reserves and production cost in Indonesia for future national energy sustainability.

Concurrently, parallel session 3 hosted some presentations related to the topic of energy investment and finance as well as energy security. There were two reviewers in the parallel session 3; Dr. Sharifah Alatas from University Kebangsaan Malaysia (UKM), Malaysia and Dr. Inka Yusgiantoro from PYC, Indonesia. In this session, there were four research presentations with the topics of 1) gas resource utilization in Tangguh, Masela and Kasuri Blocks for the regional development in eastern Indonesia, 2) volatility transmission analysis between oil price, gold price, and USD exchange rate, 3) the potential funding of electricity power project with customers as the investor through solar cell photovoltaic rooftop business model and 4) energy security enhancement using biomass utilization in Berau regency, East Kalimantan.

The parallel session 4 took place as a workshop that discussed various topics in the energy sector. The presentations covered a variety of discussions on topics such as energy security particularly in the case of Indonesia, renewable and clean energy development project, the current general national energy plan or Rancangan Umum Energi Nasional (RUEN) and East Natuna field.



JAKARTA - On Wednesday, November 29, 2017, in conjunction with the welcoming dinner of PYC International Energy Conference 2017, Purnomo Yusgiantoro Center (PYC) launched a journal entitled Indonesian Journal of Energy (IJE) at Sari Pan Pacific Hotel, Jakarta. The IJE launched directly by Prof. Purnomo Yusgiantoro as Founder of PYC and Filda Yusgiantoro as Chairperson of PYC, marked by a show of the mockup cover of IJE.

IJE covers research with a strong focus on energy economics, energy analysis, energy modeling, and prediction, integrated energy systems, energy planning, and energy management. It also welcomes paper on related topics such as energy conservation, energy efficiency, energy innovation, energy technology, biomass and bioenergy, renewable energy, electricity supply and demand, energy storage, energy in buildings, energy finance, energy law and economic and policy issues. Besides that, it also provided topics are within the context of the broader multi-disciplinary scope of energy. IJE is bi-annual journal publication, publish every February and August. The first volume will be published on February 2018.

IJE will be available printed and online (accessible via The first volume of IJE will contain several scientific articles from selected papers presented at PYC International Energy Conference 2017.

IJE will always welcome original research papers for its next volume. Visit IJE website for submission guideline.



The World's Oil Market and OPEC

Figure 1. The curve of oil price history from 1860 to 2017

OPEC History

Since 1860, crude oil has been one of the most critical commodities in the world. Long before World War I, the oil market was controlled only by Standart Oil (Exxon), Shell, Nobel, and Rothschild. The last two companies owned by Russian. While Anglo-Persian Company (now British Petroleum) together with British government were born in the middle of World War I. From the end of World War II until about 1969, some other company started to take the opportunity in the oil market such as Gulf, Texaco, Standart Oil California (Chevron), and Mobil. Even though the price competition was inevitable, there was a monopoly power came from The Seven Sisters. The Seven Sisters consists of Exxon, Gulf, Texaco, Mobil and Chevron from the United States and also British Petroleum from England. It could be said that in the era around 1950, The Seven Sisters controlled almost 98.3% oil market worldwide using Oligopoly market structure.

Between 1950 and 1960 the oil market condition was vastly promising with the high-profit margin and the production cost only around USD 0,1 and USD 0,2. This fact certainly attracted new business rivals on the oil market. This situation made The Seven Sisters market decreased to just 76.1% in 1969. Simultaneously, the producer and exporter countries tried to increase their income on oil market which caused the profit margin getting lower and lower for oil companies. However, not as expected, the producer countries income were declining with the decreasing of oil company profit. It is because the amount of government tax was the function of companies profit. All of these situation leads five countries to sign their names to a document establishing the Organization of the Petroleum Exporting Countries (OPEC) on 14th September 1960, and declared the organization open to "any country with a substantial net export of crude petroleum.” The first five countries as the founder of OPEC were Iran, Iraq, Saudi Arabia, Kuwait, and Venezuela. In short order, nine more states took them up on that offer. Indonesia itself started to join OPEC in 1961, then suspended the membership in 2009, reactivated in 2016, and less than a year after rejoining the cartel, Indonesia decided to take another suspended due to the disagreement of the production cuts regulation. OPEC's defining objective was to reclaim developing nations' oil resources from their former colonizers, and from the companies for the benefit of their citizens. From this era, oil price is no longer used as just a fuel price. It’s used as a weapon and a strategic asset to control economic globally. Every sector has a part in determining oil prices.

The 1970s Oil Shock

The first strike came in early 1970, known as “The 1970s Oil Shock”. After there was a regulation to protect the environment, and at the same time, the US and Canada’s oil production were also declining. Because OPEC gasoline contained fewer of the pollution-causing particles, the demand for their product increased while the producer countries could not afford the sudden high request. Things indeed became raised to a high state of consciousness in 1973, when Arab supporters within OPEC stopped shipping oil to western due to supporters of Israel. When they lifted the embargo in early 1974, they raised the price of oil dramatically, from under $2 per barrel before the October war, to more than $12. By this time, OPEC began to have a significant impact on controlling the oil price worldwide and testing its strength. The price hikes rippled up to 350% and caused alternative fuels, such as coal, to increase in price as well.

The 1979s Oil Shock

The oil market back to the crisis on 1978 to about 1980, recognized as “The 1979 Oil Shock”. This time the oil price was hit by the political issues from Iran revolution and also Iran-Iraq War. The Iran production decreased drastically from 6 million MMBOPH to only became 2.4 MMBOPH. The condition was getting worse when Saudi Arabia reduced their oil production from 10,4 MMBOPH to 8 MMBOPH in 1979. The sudden act of Saudi Arabia increased the world’s oil price excessively from about to more than USD 100 per barrels. Not long after the second oil shock, the demand began to decline while the oil production kept increasing. This lead to OPEC’s oil production drop from 30,9 MMBOPH to 26,9 MMBOPH in 1980. Furthermore, the OPEC’s market share also dropped from 68% on 1974 to only became 46% on this period. Since then, the oil price kept getting declined. To avoid further losses, OPEC refused fixed pricing structure and cuts their rates to try winning back market share. OPEC tried introducing production quotas for its members but with limited success. Some OPEC members exceed assigned volumes. After the second crisis, the discourse about the more stable energy resources and save energy topic cut the world petroleum demand and with the supply shock from Saudi Arabia, the price began dropping to about USD 25 and oscillated on about USD 10 to USD 40 until the end of 1999.

Oil Price in the 2000s

In the early 2000s after Indonesia and some other country such as Thailand and South Korea recovered from the financial crisis, the demand started to soar in the region and price regained at the highest level since 1981. The price became higher when the US-led invasion of Iraq in 2003 and removed about 2,5 MMBOPH from the market while the demand from both eastern and western country was getting higher as they entered the decade of prosperity rising. Then the global financial crisis affected the oil price to raised more than 78% on 2008 with the peak on USD 147,50 for Brent and USD 147,27 for US Crude. After four years when the highest average oil prices in history, oil began to drop in mid-2014 due to the steady production of the United States and Russia. Oil price falls as much as 75% over the next 18 months, throwing oil companies into turmoil and roiling global markets. The price collapse forced high-cost drillers to idle rigs while international giants like Chevron, Shell, and Halliburton cut thousands of workers and billions of dollars in spending. It’s getting even worse when instead of balancing the glut by decreasing the production, Middle East exporters engaged price war to defend their market share. In the end, OPEC nations agreed to cut supply for the first time in eight years even though it didn’t result in a significant price rebound, as Libya and the US began pumping more. 

Future Oil Market Share 

Some analysts expect to see oil prices to return to the level seen a few years ago anytime soon, giving the idea that this could be a new era of high energy supply. The price falling has been a blessing for the consumer, but also a curse for government in countries such as Venezuela or Nigeria whose its economy depends on the energy sales. The US shale gas revolution has made the US the biggest producer of oil and gas, dismissed the fear of oil crisis due to Middle East conflict. While some watchers worry that the low price will lead to under-investment in oil and also the increases of oil consumption due to the low cost, oil companies still believe that oil will remain an essential fuel for decades to come.



Arnsdorf, I. (2014, October 2017). Oil Prices. Bloomberg QuickTake. Retrieved from
Johnson, C. (2008, 20 November). TIMELINE: Half a century of oil price volatility. Reuters. Retrieved from

Yusgiantoro, P. (2000). Pasar Minyak Dunia dan OPEC. Ekonomi Energi Teori dan Praktik (pp. 207−214). Jakarta: Pustaka LP3ES.


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