State revenue from oil exports may beat target

JAKARTA (JP): Favorable world market prices for Indonesian crude oil, Minas, are likely to push state earnings from oil exports above the current (1997/1998) fiscal year target, Minister of Mines and Energy, I.B. Sudjana says.

Sudjana said yesterday Minas crude oil prices were US$18.78 a barrel, far higher than the price estimate.

The state revenue from oil exports target in the 1997/1998 budget was based on a predicted $16.50 a barrel.

Sudjana, after meeting with President Soeharto at Merdeka Palace, said he was going to Vienna, Austria, on June 24 to meet ministers of Organization of Petroleum Exporting Countries (OPEC).

He said a Monitoring Committee meeting in Iran last month concluded that all OPEC members' crude oil production had exceeded quotas.

But during the meeting, all countries agreed to resume production at their respective quotas. OPEC countries currently produce 25.03 million barrels per day (bpd).

Indonesia produces 1.3 million bpd, Iran 3.6 million bpd, Kuwait two million bpd and Saudi Arabia eight million bpd.

Sudjana said the next OPEC ministerial meeting was likely to be in Indonesia late this year.

The state budget for the 1997/1998 fiscal year balances at Rp 101.08 trillion (US$42.2 billion).

The government expects its income from oil and gas to rise 5.3 percent to Rp 14.87 trillion, from Rp 14.12 trillion in the last fiscal year, and its income from sales of fuel products to fall 69 percent to Rp 249.2 billion, from Rp 827.8 billion.

Asian crudes

Asian crudes weakened yesterday as the continued absence of China closed off the main outlet for heavy sweet grades such as Minas, traders said.

A Japanese refiner bought up to 300,000 barrels of June Minas Friday at ICP -15/20 cents per barrel from two sellers, AFP reported.

Details on the sellers were sketchy, although they were both heard to be shoshas.

Only Duri crude was holding its strength and traders expected demand from fuel oil blenders to maintain the crude's price around ICP +30 for July.

June Duri was sold out, with last trades done at ICP +30.

Award details of a Bach Ho sales tender by Vietnam, which closed on Wednesday, could not be confirmed, although the level was heard to be OSP +64.

With Bach Ho's OSP at Minas APPI +80, the level of the award was considered by some traders to be extremely high.

But others considered the level comparative to the Minas price, as the Minas APPI is much lower than the Minas ICP.

Traders said the award was likely to have been to a shosha. In the Middle East market, prices steadied in thin trading.

Traders were uncertain about the direction of the Oman market, following the last trades at MPM -23/24 two days ago. (pwn)