The Heart of Indonesia’s Energy is in East Kalimantan
East Kalimantan has long been known as the heart of Indonesia’s oil and gas industry. Balikpapan City is a major hub, with the construction of Pertamina Refinery Unit V (RU V), the Kariangau LPG Terminal, and various supporting energy and petrochemical facilities.
Not far away, Bontang is home to a large LNG project that has been operating for decades, while Kutai Kartanegara and Sangatta are areas of dense oil and gas exploration and production activity.
Every day, thousands of workers and hundreds of pieces of heavy equipment operate in onshore and offshore oil and gas fields, fuel terminals, refineries, and renewable energy construction projects. However, behind this high productivity lies significant and complex risks inherent in every stage of operations—from drilling and production to storage and distribution.
A single incident, such as a small explosion or oil spill, can cause losses of hundreds of billions of rupiah, environmental damage, and even threaten public safety.
This is where the importance of well-planned risk management and insurance protection lies, with assistance from professional insurance brokers such as PT Liberty and General Insurance Broker (L&G).
Major Risks in East Kalimantan’s Oil, Gas, and Energy Industry
Each oil and gas facility has different risk characteristics, depending on its location (onshore/offshore), scale of operations, and the technology used. Here are some of the main risks faced by oil and gas industry players in Balikpapan and the surrounding area:
- Fire and Explosion
Balikpapan refinery, fuel depot, or LPG terminal are areas with high levels of inflammability.
One small error in the pressure system or a gas leak could cause a major explosion resulting in infrastructure damage and loss of life.
The fire incident in the Balikpapan oil storage area several years ago served as a reminder of this danger.
- Work Accidents in Production Areas
Drilling operations in East Kutai or Sangatta often involve heavy work under high pressure and extreme environments.
Worker injuries from falls, fire, or exposure to toxic chemicals are risks that always lurk.
- Environmental Pollution
Oil spills or waste spills into rivers can have long-term environmental impacts, triggering lawsuits and government sanctions.
- Damage to Production Equipment and Infrastructure
Oil and gas facilities use complex high-pressure machinery, pumps, pipes, and tanks.
Failure of a single major unit can halt operations and result in significant losses due to downtime.
- Energy Supply Disruptions and Transportation Risks
Distribution of fuel and gas to the East Kalimantan region via tanker trucks, ships, or pipelines also carries a high risk of fire, collisions, and theft.
Financial Impact Without Adequate Protection
Losses in the oil and gas sector are not only in the form of lost physical value, but also indirect losses such as lost income, late contract fines, and legal claims from third parties.
For example, a small oil leak incident at Kariangau port could result in direct losses of Rp 10–20 billion for cleanup, plus environmental claims from coastal communities.
Without insurance coverage, all these costs are borne by the company.
This is why major oil and gas companies such as Pertamina, Medco, Vico, and PHM (Pertamina Hulu Mahakam) always collaborate with experienced insurance brokers to ensure all risks are handled professionally.
Important Types of Insurance in the Oil, Gas and Energy Sector
Due to its complexity, the oil and gas industry requires a comprehensive protection package. Here are the main types of insurance you should have:
- Energy Property All Risks Insurance
Covers physical damage to oil and gas assets due to fire, explosion, lightning, earthquake, or mechanical accident.
This policy covers refineries, pipelines, tanks and other supporting infrastructure.
- Machinery Breakdown Insurance
Protects vital machinery such as pumps, compressors, and generators from internal damage due to pressure, operational errors, or wear.
- Business Interruption (BI) Insurance
Covers revenue losses due to operational disruptions due to insured events, such as refinery fires or major pipeline failures.
- Public Liability & Environmental Liability Insurance
Covers legal liability to third parties, including property damage, bodily injury, and environmental pollution resulting from oil and gas activities.
- Employer’s Liability / Workmen’s Compensation
Guarantees compensation for workers who are injured or die while working at oil and gas facilities.
- Construction & Erection All Risks (CAR/EAR)
For new energy facility construction projects or refinery expansions, this insurance protects construction work from various physical risks.
- Marine Cargo Insurance
Ensure the transportation of oil and gas materials and spare parts by sea and land.
It is crucial for projects in areas such as Bontang and Sangatta that depend on shipping routes.
Why Insurance Brokers Are Important in the Oil and Gas Industry
The oil and gas industry requires in-depth technical and legal knowledge in policy preparation.
A small error in wording can cause a claim to be denied when a major loss occurs.
Insurance brokers such as PT Liberty and General Insurance Broker (L&G) have a vital role as independent advisors who work in the interests of clients, not insurance companies.
Here are the reasons why oil and gas and energy companies in East Kalimantan should use broker services:
- Deep Technical Understanding
The L&G team has experience handling complex Energy, Engineering and Liability policies.
They are able to assess the operational risks of refineries, offshore and storage facilities to international standards.
- Integrated Insurance Program Design
L&G helps develop comprehensive risk management programs that cover property, legal liability, and business losses all at once.
- Negotiate the Best Premium and Policy Conditions
Through its extensive network with national and international insurance companies, L&G can negotiate competitive premiums with the most comprehensive clauses.
- Proactive Claims Assistance
In the case of major claims such as fire or pollution, L&G acts quickly — from preparing the initial report, coordinating with the loss adjuster, to negotiating the full claim payment.
- Digital and Regional Support
With the digital system, clients from areas such as Sangatta, Muara Badak, and Bontang can report claims and monitor policy status without having to come to the Balikpapan office.
Case Study: Minor Explosion at Balikpapan LPG Terminal
An energy contractor company in Balikpapan experienced a minor explosion in its LPG filling area, causing pipe damage, minor injuries to two workers, and losses of approximately Rp 6 billion.
Luckily, they have Energy Property All Risks + Liability Insurance arranged by an Insurance Broker.
Thanks to neat claim documentation and effective negotiations, the claim was approved 100%.
The project returned to normal operations in just 3 months.
This case demonstrates the importance of experienced brokers in handling complex and high-value oil and gas claims.
Integrated Risk Management in the Energy Industry
Insurance is not the only solution — but part of a comprehensive risk management system.
Brokers like L&G not only help purchase policies, but also assist clients in:
- Compile risk mapping and risk register for each facility,
- Assess safety conditions and operational standards (HSE),
- Provide risk awareness training to field teams, and
- Monitor changes in risk as the project progresses.
- This approach makes insurance a strategic tool, not just an administrative obligation.
New Challenges: Renewable Energy and the Green Transition
In addition to oil and gas, East Kalimantan is starting to move towards renewable energy, such as solar power plants (PLTS), biomass, and clean coal gasification.
But these new energy projects also bring new technical risks — from technology failures to extreme weather to solar panel damage.
L&G Insurance Broker has prepared a special insurance package for green energy projects, including:
- Renewable Energy Insurance,
- Construction All Risks,
- And Business Interruption for PLTS or biofuel plant facilities.
- This adaptive approach makes L&G a relevant partner amidst the national energy transformation.
Building a Culture of Safety and Protection in East Kalimantan
The oil and gas and energy industry is a capital-intensive and high-risk sector.
However, with a commitment to sound risk management and protection, this sector can become a sustainable economic driver for East Kalimantan.
The role of professional insurance brokers such as PT Liberty and General Insurance Broker (L&G) is very important in helping companies:
- Increase risk awareness,
- Building strong financial protection, and
- Ensuring claims are handled quickly and transparently.
L&G is present not only as a service provider, but as a strategic partner that understands the character of the local oil and gas industry — from the Mahakam field to the Balikpapan refinery.
Conclusion: Protecting Energy, Safeguarding the Future
The oil and gas and energy industry in East Kalimantan is the backbone of the national economy.
But without proper risk management and adequate insurance, a single accident can halt operations, harm the environment, and threaten the company’s future.
With the support of PT Liberty and General Insurance Broker (L&G), industry players can now have comprehensive protection, fast service, and professional assistance — for both conventional oil and gas projects and new renewable energy.
Because maintaining this country’s energy is not only about production, but also about protecting what has been built wisely and sustainably.
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DON’T WASTE YOUR TIME AND SECURE YOUR FINANCIAL AND BUSINESS WITH THE RIGHT INSURANCE.
HOTLINE L&G 24 JAM: 0811-8507-773(CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: halo@lngrisk.co.id
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