BPMIGAS expects oil, gas revenues to still rise in 2012

By Edi Junaedi

Upstream authority BPMIGAS Chairman Raden Priyono said he expects oil and gas revenues contributing to the 2012 State Budget would reach US$32.14 billion, higher than last year of US$30.98 billion.

Priyono argues that expected lower oil lifting should be offset by higher oil price. The government and the House have revised down oil lifting assumption for 2012 at 930,000 barrels of oil per day (bopd), from earlier assumption of 950,000 bopd. The Indonesian Crude Price (ICP) level was set higher at US$105 per barrel, compared to US$90 per barrel set in the original 2012 State Budget.

The House of Representative?s Commission VII and the government set the above assumptions during a hearing over the past few days. However, the final oil price and oil lifting assumption level is pending approval of the House Plenary meeting.

Priyono said based on the authority?s calculation every US$1 increase in oil price would lead to an increase of total oil revenues received by the government by US$324 million and every US$1 decline of oil price would lead to a decline of income from oil of US$203 million.

The oil lifting set by the government and the House of Representative appear to be too optimistic as the current oil production remains below 900,000 bopd, as data from BPMIGAS shows.

Editing by Roffie Kurniawan