Sat, 08 Oct 1994

Target for oil revenues is reachable

JAKARTA (JP): The government will achieve its target of Rp 12.85 trillion (US$5.89 billion) in revenues from the oil and gas sector this fiscal year due to improving oil prices on the world market, a minister says.

"The government, which was forced to use budgetary reserves last fiscal year, therefore will not need to dip into budgetary reserves again this fiscal year," Minister of Mines and Energy I.B. Sudjana told the Budgetary Commission of the House of Representatives (DPR) in a hearing last night.

Sudjana explained that Indonesia has been able to maintain its crude oil production at 1.53 million barrels per day, while oil prices are increasing on the world market.

He said Indonesian crude oil prices from April to August this year averaged $16.36 per barrel, slightly higher than the $16 targeted by the government under its budget plan.

During the first quarter of this fiscal year, oil revenues reached Rp 1.99 trillion.

According to Sudjana, oil prices on the world market will stabilize above $16 a barrel until the end of this year due to increasing demand in the northern hemisphere during the winter.

He assured the commission members: "With the robust oil market, the government will not need to use its budgetary reserves, which are estimated at Rp 1.7 trillion, this fiscal year."

On Monday, the average price of OPEC's oil was recorded at $16.59 per barrel, as compared to $16.86 in August and $15.61 in September. The price of Brent was $16.90 on Monday, as compared to 16.92 in August and $15.99 in September, while the price of West Texas Intermediate was $18.33 against $18.40 in August and $17.35 in September.

The government expects to receive oil and gas revenues of Rp 12.85 trillion this fiscal year, including Rp 9.50 trillion from oil and Rp 3.35 trillion from natural gas. This fiscal year's oil and gas revenues will be 15 percent lower than the Rp 15.12 trillion budgeted for last fiscal year.

In addition to the gas and oil revenues, the government also expects to receive Rp 2.52 trillion in profits from the domestic sales of fuel this fiscal year. "This target will also be reachable," he said.

Natural gas

Sudjana was optimistic that revenues from natural gas, set at Rp 3.35 trillion, will be met, considering that gas prices are linked to oil price developments.

He noted that natural gas revenues during the first quarter of the fiscal year (April to June) reached Rp 773.1 billion.

He said the government has asked companies involved in the petroleum industry to maintain their levels of production and improve efficiency.

"To maintain levels of production, the state oil company Pertamina and its contractors will invest some $4 billion this year," he said.

"During the first quarter of this fiscal year, Pertamina and its contractors spent $2 billion for oil exploration and production," he added. (fhp)

Oil market -- Page 4