Govt eyes higher oil revenue

Govt eyes higher oil revenue

The Jakarta Post, Jakarta

Soaring crude oil prices mean the government expects higher
revenue from oil and gas operations this year despite a drop-off
in production.

The Oil and Gas Upstream Regulatory Body (BP Migas) estimates
oil and gas revenue may reach close to US$12 million for 2004
compared to $10.5 million last year.

"The high crude oil prices compensates for the decline in oil
output. Prices of liquefied natural gas (LNG) that are linked to
oil prices also get a boost from recent surge in oil prices,"
Rachmat Sudibyo said on Friday.

Out of the projected $12 million in revenue, some $7 million
is expected to come from oil and $4 million from natural gas.
Last year, oil contributed $6.5 million to state coffers and gas
brought in $4 million.

Rachmat said recent discoveries and the exploitation of new
oil and gas fields would help achieve the revenue target despite
the country's declining oil output, which has dropped steadily
during the past five years.

Indonesia's oil output now stands at an average of 1.17
million barrels per day (bpd), lower than 1.288 million bpd and
1.389 million bpd in 2002 and 2001, respectively.

The decline in output has been attributed to aging oil fields
and the lack of new investment in the oil and gas sector.

Indonesia's natural gas reserves, meanwhile, have been on the
rise. Proven natural gas reserves now stand at 90.3 trillion
cubic feet (TCF) and potential reserves are estimated to be at
86.29 TCF.

Rachmat said unfavorable fiscal policies and uncertainty in
the regions had hampered oil and gas exploration activities.

BP Migas planning deputy Zainal Achmad said companies had
purportedly made two new oil and gas discoveries this year -- in
the Jabung block in South Sumatra operated by Petrochina and in
the Pangkah block in northeast Java operated by Amerada Hess.

"But we haven't received official reports from the companies
to confirm these findings," Zainal said.