Our company started in 2011 and today we have 50 office personnel and up to 270 employees manning our boats. We own a fleet of 11 vessels comprised of six accommodation work barge [AWB] units able to hold between 50 to 425 people. Our fleet also includes two VV units of the Asmussen dry vessels, ANITA anchor supplies, and work boats. We consider our company to be the owner of the largest fleet of AWBs in Indonesia.

Bayu Maritim’s focus is on ship rentals for the oil and gas sector because based on my 25 years of experience in this industry, there are many opportunities in this sector despite ongoing price fluctuations. Indonesia possesses huge market potential in the offshore oil and gas industry because of its vast coastal areas and numerous islands. There are currently large oil companies exploring Indonesia’s oil supply and the country is certainly witnessing more activity in this regard compared to fellow Southeast Asian countries. Despite current obstacles such as a decline in oil prices, the market potential remains large as evident by ENI’s discovery of a huge oil reserve in Kalimantan and Sulawesi as did Chevron with its Gendalo project, ExxonMobil in Cepu, and BP in Papua. Findings by these companies provide us with an opportunity for future expansion.

We were quite surprised with the fluctuating price of oil given that last year prices ranged from $90 USD to over $100 USD per barrel and today, prices are between $40 - $50 USD per barrel. The impact of this decline on our industry is substantial. When the price of oil is good there will be plenty of surveying, exploration, drilling, and production activities. With oil prices reduced by almost 50%, these activities have significantly reduced.

Additionally, there is an imbalance in supply and demand evident in the market overflow of oil vessels meanwhile there is low demand from oil companies causing vessel rental prices to decrease by nearly 35% - 40% compared to last year. With many idle vessels, competition has also grown substantially tighter. I believe the outlook for the industry this year will be a tough one and my prediction is that the oil market will be difficult for the next two years starting from 2015. With that said, there are also opportunities to be had during this down cycle, such as the increased availability of vessels at reasonable prices which will allow us to go forward with our fleet expansion plans.

I respect President Joko Widodo’s purpose because he has not only initiated plans to develop sea transportation but also issued regulations cutting down on bureaucracy. The tax exemption regulation for Indonesia’s shipyard industry is a starting point because it would mean that the cost of shipyard materials in Jakarta and Semarang will be the same to that of Batam; Batam’s location in the SEZ currently means that shipyard materials are cheaper than those in non-SEZs.

Even when the market experienced better days, prominent investors faced difficulties with the cabotage implementation for two reasons.

The first barrier is setting up the company in Indonesia using a 49% - 51% share hence international companies had to find a local partner willing to put in the equity of 51%. The second challenge is that PMA companies through the 49% - 51% share should have one vessel with 5,000 deadweight tonnes, which is quite big for the offshore industry. As such, those barriers presented foreign investors with challenges during the better days even though the market potential is good.

Our focus remains on the AWBs which is used as a platform support to connect the rigs and flushing. Our future plans also include building work boat vessels with a capacity to accommodate 200 - 300 people. We have a partnership with Falcon Energy from Singapore and we are discussing future plans to anticipate deepwater explorations which led us to future plans of building said vessels. They built two of these vessels and we stationed one vessel in Mexico with PEMEX and the other for Brunei Shell.

Given the number of international companies having already setup businesses particularly in Indonesia’s offshore industry over the past five to ten years, there will be no significant impact once the AEC is implemented. In particular for Bayu Maritim Group, we have rented our vessels to a number of countries including Brunei, Malaysia, India, and the UAE illustrating our ability to compete globally.

We are open to working with international investors, and are particularly keen on working with those with a long-term mindset that are focused on the many lucrative opportunities that will open up in Indonesia once the price of oil recovers. There are several deepwater projects poised to take place in Indonesia, such as the Jangkrik and Gendalo fields. The commencement of this deepwater activity will require large PSVs [Platform Supply Vessels] capable of holding 3,000 to 5,000 deadweight tonnes. Foreign investors should look to these types of projects when making the decision to invest in Indonesia.

Our company currently specialises in AWBs and is thus not presently focused on PSVs. As such, we are open to finding a suitable international partner to take advantage of the aforementioned long-term opportunities in Indonesia via cooperation in the form of technology and knowledge transfer. This would provide us with the expertise needed to skilfully manage and operate a wider range of vessel types including big anchor handlers.

The oil and gas industry in Indonesia is the biggest in the region and deepwater activities have only just started. When the price of these resources rises, there will be many promising opportunities for investors to take advantage of. Moreover, there is reason to be upbeat about our industry’s prospects under President Joko Widodo, due to his commitment to maritime development and sea transportation.