Thu, 01 Jan 2009
Alfian, The Jakarta Post, Jakarta

While booking an unprecedented 53.79 percent jump in revenue this year in direct earnings from the energy and mining sectors, the government will prepare for possible economic turbulence next year by lowering revenue expectations for the state coffers.

A continuing slump in the global prices of oil, gas and mining commodities are the main worrying factors leading government not to expect too much next year.

Energy and Mineral Resources Ministry, Purnomo Yusgiantoro, said Tuesday the energy and mining sector was forecast to book Rp 346.35 trillion (US$31.20 billion) in revenue for the state by the end of this year, up from Rp 225.21 trillion in 2007.

Revenue forecasts were calculated based on January to November actual performance while estimating results for December.

According to Purnomo, the sector had remained the primary contributor to state coffers generating revenue from the sale of oil and gas, and from royalties paid by mining companies.

"The sector contributes 36 percent to total state revenues this year," Purnomo said, adding the biggest contribution was from oil and gas companies, which contributed Rp 303.07 trillion this year.

Despite these soaring revenues, the Energy and Mineral Resources Ministry decided to put limits on lower revenue targets for next year.

According to the ministry's secretary general Waryono Karno, the government was looking at about Rp 271.08 trillion in revenue from the energy and mining sectors for next year.

Of the total expected revenue, Rp 226.78 trillion would be from oil and gas, Rp 43.15 trillion from mining, and Rp 1.15 trillion from other sources.

"We are setting lower targets to adjust to the declining prices of oil and mining commodities. We perceive this as a moderate target. However, if the prices plunge further, we may revise the target in the state budget revision," Waryono said.

Meanwhile, the ministry also announced that investment in the energy and mining sectors jumped by 18.25 percent to $18.63 billion this year from $15.75 billion in 2007.

This year's investment, however, was still lower than the initial target of $21.74 billion. Realization was 14 percent below target.

A significant proportion of unrealized investment came from the oil and gas sectors and electricity sectors, according to the ministry.

Oil and gas companies were initially expected to invest $14.79 billion this year, higher than the $12.21 billion realized, a drop of 17 percent from target to actual.

The power sector was earlier expected to mobilize and spend $5.40 billion in investment but only managed to realize $4.76 billion, a drop of 12 percent on initial plans.

Kardaya Warnika, the ministry's advisor for information and communication and former chairman of upstream oil and gas regulator BPMigas, said some investment commitments in the oil and gas sector had to be delayed for various reasons, including problems with land acquisition.

However, he added the delayed investments would still be carried out next year.

Director General for Electricity and Energy Consumption J. Purwono voiced similar arguments, saying some power investments would be delayed until next year due to prolonged banking procedures encountered in financing the projects.

The ministry said Indonesia had received $28.60 billion in investment commitments for the energy and mining sectors in 2009.



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