Oil revenues projected to exceed target
Oil revenues projected to exceed target
JAKARTA (JP): Amidst concern about a possible drop in crude
oil prices, the government expects that its revenues from the oil
sector will exceed its target of Rp 9.8 trillion (US$4.3 billion)
for the current fiscal year, ending in March.
The president of state-owned oil firm Pertamina, Faisal
Abda'oe, told journalists after meeting with President Soeharto
here yesterday that Indonesian crude oil prices would likely
reach an average of US$19 a barrel until the end of the current
fiscal year, far above the government's budget price of $16.50.
Indonesia currently enjoys relatively high oil prices due to
the winter in oil importing countries and the breakdown of two
power plants in Japan, the main importer of Indonesia's crude,
Abda'oe said.
Indonesia's oil prices are formulated on the basis of the
average of world oil prices during the last 52 weeks and the
current average market prices divided by two.
"We hope that our oil prices will average out at $19 a
barrel," Abda'oe told journalists. "We just hope that Iraqi oil
doesn't enter the market too soon, so our plans won't be thrown
off course."
World oil prices were slightly lower earlier this week after
Iraq accepted an invitation from the United Nations to resume
discussions on a UN oil-for-food plan.
According to Reuters, international benchmark North Sea Brent
blend futures closed at $16.97 a barrel in London on Monday, down
13 cents from Friday's close, still well short of OPEC's $21
target.
A new round of talks between Iraq and the UN again raises the
prospect of Baghdad selling some 700,000 barrels per day (bpd) of
crude oil on international markets.
At its year-end conference in Vienna last November, the
Organization of Petroleum Exporting Countries (OPEC) agreed to
allow Iraq to produce up to 400,000 bpd of crude to reach a
combined output of 24.52 million bpd for the first half of this
year.
Abda'oe predicted that OPEC would take action if Iraqi oil
entered the market and caused world prices to fall.
"Certainly if Iraq enters the market, OPEC will take steps.
What kind of steps? I cannot say now. It is up to the OPEC
ministers to decide," Abda'oe said.
He noted that the reentrance of Iraq into the world oil market
would automatically affect prices, and the supply structure.
"How prices will be affected if Iraq enters the market is very
difficult to predict, but it is clear the price will be affected,
and we have to be ready to face it," Abda'oe said.
He met with President Soeharto at his Jl. Cendana residence to
present Rp 4 billion in donations to the Gotong Royong
Kemanusiaan Foundation, chaired by Mrs. Tien Soeharto. (rid)