Energy revenue reaches Rp 79.57 trillion in 2003
Fitri Wulandari, The Jakarta Post, Jakarta
State revenue from the oil and gas sector is expected to be higher in 2003 than the previous year's but revenue from mining sector has seen a decline.
In a 2003 performance review, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Wednesday that state revenue from the oil and mining sectors, which are under the supervision of the ministry, was expected to reach Rp 79.579 trillion in 2003.
It is well above the state budget target of Rp 72.456 trillion and but only slightly higher than the previous year's Rp 79.15 trillion.
Purnomo said state revenue from the oil and gas sector was estimated to reach Rp 78.507 trillion in 2003, up from Rp 77.84 trillion in 2002, while the mining sector is expected to contribute a mere Rp 1.07 trillion in 2003 to state revenue, lower than the previous year's Rp 1.3 trillion.
Investment in the mining sector has declined since 1998 due to various uncertainties.
Purnomo said that in 2003 the mining sector still faced old problems such as uncertainties over regional autonomy, illegal mining and the absence of a new law on mining.
"The key to revive the mining sector is how to solve all these problems," he remarked.
While the mining sector remained in the doldrums, the oil and gas sector experienced brighter days in 2003.
In the upstream sector, which consists of exploration and crude oil and gas production, the government awarded 15 new contracts for oil and gas acreages in 2003 to investors who pledged to invest a total of US$140.9 million in exploration activities for three years.
Investment from production sharing contractors (PSCs) in 2003 reached $3.97 million, including $1.13 million for exploration, $2.5 million for production and $329,000 for administration.
In the downstream sector which consists of refining, retailing, and distribution, the government has issued licenses to build refineries to 20 companies. Eighteen companies received presidential approval and the remaining two companies are still waiting for such an approval.
For this year, the government plans to focus on the oil and gas sector and the power sector, while working to complete various policies in the mining sector.
Iin Arifin Takhyan, the ministry's director general of oil and gas, said the government would offer 17 new acreages this year.
Ten acreages would be offered through competitive bidding while the other seven acreages would be offered through direct offering based on companies' initiatives.
The seven new acreages are Bulungan, Nunukan, Tigau and East Ambalat in East Kalimantan, Seruai in Aceh, Lubuk Linggau in South Sumatra, and Boven Digul in Papua.
The government also plans to invest some $7.49 billion in the upstream sector to recover dwindling oil production. Indonesia is the only Southeast Asian country in the Organization of Petroleum Exporter Countries (OPEC). But the country has been producing oil below the OPEC quota of 1.3 million bpd due to depleting oil resources and a lack of investment.
The government projects crude production this year will be 1.15 million barrel per day (bpd), up from 1.081 million bpd in 2003.
Natural gas production is expected to increase up to 6.58 billion cubic feet (BCF) from 6.28 bcf in 2003.
In the power sector, the government plans to start construction of several power plants in a bid to cap power shortages.
Yogo Pratomo, director general of electricity and energy said the government would start selecting members of a power market regulatory body this year following liberalization of the sector in 2003.
As for mining, the government would focus on policy issues such as pushing for deliberation of a draft law on mining, completing national coal policy, completing guidelines for geological resources and mining as well as settling conflicts with existing investors who complain about the forestry law which bans open-pit mining in natural forests.