Investment in the domestic oil and gas sector reached $3.35 billion in the first quarter, just 20 percent of the total full-year target of $16.6 billion.
Investment in the upstream oil and gas sector reached $2.96 billion in the first quarter, with $392 million invested in the downstream sector, said Minister of Energy and Mineral Resources Purnomo Yusgiantoro, at a meeting with the House of Representatives’ Commission VII, which oversees energy issues.
Evita Legowo, director general of oil and gas at the ministry, said investment was likely to increase later in the year.
“Based on last year’s experience, most spending will come after September, when oil and gas companies increase their exploration and production activities,” she said. “This is because approvals for work programs and budgets are given in the second half.”
According to data from upstream oil and gas regulator BPMigas, the budgets for exploration and production involving 52 energy contractors will contribute $12.9 billion to investment in the country.
Another reason for the shortfall was that the government only managed to sign 15 out of 50 new contracts for blocks offered in the first quarter. These contracts were for the exploration of 12 oil and gas blocks and three coal-bed methane projects.
“Although [the revenue] from signing these contracts is not significant, we would have reaped signing bonuses from the them,” Legowo said.
There are currently 190 domestic and foreign oil and gas contractors with operations in Indonesia.