Govt upbeat oil revenue will rise<\/p>\n
JAKARTA (JP): Minister of Mines and Energy Kuntoro
\nMangkusubroto projected on Friday the government's oil revenue
\nwould rise to more than Rp 13 trillion (US$1.4 billion) for the
\n1999\/2000 fiscal year despite a reduction in output.<\/p>\n
Kuntoro believed oil prices would average at least $11.50 per
\nbarrel following the Organization of Petroleum Exporting
\nCountries (OPEC) recent decision to cut the world's oil output by
\n2.1 million barrels per day (bpd).<\/p>\n
\"Despite the cut in output, Indonesia will still earn more
\nthan Rp 13 trillion from oil and gas taxes even if oil prices
\nreach only $11.50 per barrel,\" Kuntoro said.<\/p>\n
Under the 1999\/2000 state budget, which begins on April 1, the
\ngovernment's oil revenue is projected at Rp 12.443 trillion based
\non an oil price assumption of $10.50 per barrel and a currency
\nexchange rate of Rp 7,500 to the dollar.<\/p>\n
He said the price of oil on the world market would be well
\nabove the government's target of $10.50 per barrel, following
\nagreement among OPEC members to cut output.<\/p>\n
Indonesia agreed to reduce its oil output by 93,000 bpd to
\n1.187 million bpd excluding condensate during OPEC's 107th
\nministerial meeting on March 23 in Vienna.<\/p>\n
OPEC and several non-OPEC oil producing countries agreed to a
\nconcerted effort to reverse the fall in oil prices which began in
\nearly 1998 amid the global recession.<\/p>\n
OPEC members agreed to cut oil output by 1.7 million bpd to
\n22.976 million barrels, while non-OPEC members agreed to reduce
\ntheir output by 300,000 bpd.<\/p>\n
The cut in oil production will reduce the world's oil stock by
\n400 million barrels to 5.5 billion barrels by the end of 1999,
\nequal to the oil stock at the end of 1996 and 1997.<\/p>\n
Kuntoro said the OPEC meeting in Vienna pushed oil prices to
\n$11.88 per barrel on March 15, up from $10.37 per barrel on March
\n4.<\/p>\n
Market sentiment firmed following Russia's announcement, a
\nnon-OPEC oil producer, that it would cut its oil output to about
\n100,000 bpd<\/p>\n
\"Oil prices climbed to $13.22 per barrel on March 23 when the
\nOPEC meeting was being held,\" Kuntoro said.<\/p>\n
According to Reuters, crude oil futures prices briefly jumped
\nto $16.00 per barrel in early Asian trade on Friday in
\ntechnically driven trade, supported by a surge in oil product
\nfutures.<\/p>\n
Analysts and legislators expect oil prices to increase
\nsignificantly following OPEC's decision, but they caution that
\nthe expectation could be shattered if OPEC members fail to uphold
\ntheir promise to reduce production.<\/p>\n
OPEC's former secretary-general, Subroto, predicted on
\nThursday oil prices would rise to between $15 and $16 per barrel
\nthis year and would continue to rise to between $16 and $17 per
\nbarrel by 2000.<\/p>\n
\"Of course, the price increases can only happen if OPEC and
\nnon-OPEC countries comply with the agreement on production cuts,\"
\nSubroto said.<\/p>\n
However, Subroto believes OPEC and non-OPEC members will abide
\nby their commitments out of a common concern over low oil prices.
\n(jsk)<\/p>",
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