Govt's oil income surges

Govt's oil income surges

SINGAPORE (Bloomberg): Indonesia, the only Asian member of the 11-member Organization of Petroleum Exporting Countries, said it will stick with an OPEC pledge to cut oil output because its income soared as prices rose.

"The price rise has exceeded our expectations. We will continue with the oil supply cuts because it's obviously benefiting us," said Iin Arifin Takhyan, director of exploration and production at the Ministry of Mines and Energy.

Indonesia's benchmark Minas crude has risen as much as 84 percent since touching a 10-year low of US$9.59 a barrel in December last year. Benchmark Brent crude oil closed at $16.10 a barrel yesterday in London, up 3.2 percent.

Higher oil prices give Indonesia's economy, now in its worst recession in 30 years, a welcome windfall.

In estimating income from crude oil in its budget for this year, Indonesia set a price of $10.50 a barrel. With prices 60 percent higher at about $17 a barrel, the country could receive $7.4 billion a year from oil, compared with the budgeted amount of $4.9 billion. That assumes prices stay at $17 a barrel.

"We only need for prices to reach $11 a barrel to meet our budget. Now it is way above that level," said Iin.