Revenues from oil expected to go up this fiscal year
Revenues from oil expected to go up this fiscal year
JAKARTA (JP): The government's revenues from oil and gas sectors this fiscal year are expected to exceed the targeted Rp 9.5 trillion (US$4.3 billion) because the country's oil prices during the first 10 months of the year were higher than expected.
"Oil prices during the April 1994-January 1995 period averaged at $16.48 per barrel, 48 cents higher than the $16 used by the government in calculating its 1994-1995 budget," president of the state oil company Pertamina, Faisal Abda'oe, said yesterday.
He told a hearing with the Mining, Energy and Manufacturing Commission of the House of Representatives that the average price of $16.48 was calculated by using the new Indonesian Crude Oil Price formula.
"The old formula did not reflect the fluctuation of prices on the world market and it was always too late to adjust with the rises and falls of spot prices," Abda'oe said.
The new formula, Abda'oe said, divides the results of the old formula and the current average market price by two to get the new oil price, which indicates the developments of Indonesia's oil prices.
Abda'oe explained that the country's crude oil output for this fiscal year, ending next month, is expected to reach 479.43 million barrels, of which 37.34 million barrels or 7.7 percent will be contributed by Pertamina and the remainder by its contractors.
The production capability of oil companies operating in Indonesia has increased this fiscal year to 1.63 million barrels per day (bpd) from 1.56 million last fiscal year, Abda'oe said.
He noted that oil prices in the coming months will likely fluctuate within the range of the current average of $16.48 per barrel.
Relevance
Abda'oe indicated that the government's target of $16.50 per barrel in the coming 1995-1996 fiscal year is relevant because oil prices on futures markets for year-end deliveries are around $16.50 per barrel.
In its draft budget, the government, assuming that oil prices will average at $16.50 per barrel, expects a 3.3 percent increase to Rp 13.27 trillion from the oil and gas sectors.
He warned that the possible entrance of Iraq into the world oil market is still haunting the government's target on the average price of $16.50 per barrel for the next fiscal year.
Abda'oe contended that if the United Nations' embargo on Iraq is lifted, the country will flood the world oil market with an additional 1.2 million to 2.1 million bpd. "And of course this will affect the oil prices," he said.
He predicted that the world oil demand this year will increase by 1.1 million bpd to 69.3 million bpd, of which 25 million bpd will be met by the Organization of Petroleum Exporting Countries (OPEC).
If the 12-member OPEC sticks to its output ceiling of 24.52 million bpd, Abda'oe said, it is expected that this year's oil prices will be better than last year's.
Last November's OPEC meeting agreed to allow Iraq to produce up to 400,000 bpd of crude oil, Gabon 287,000 bpd, Qatar 378,000 bpd, Algeria 750,000 bpd, Indonesia 1.33 million bpd, Libya 1.39 million bpd, Nigeria 1.86 million bpd, Kuwait two million bpd, the United Arab Emirates 2.16 million bpd, Venezuela 2.36 million bpd, Iran 3.6 million and Saudi Arabia eight million bpd. (rid)