Govt to lower oil production target in 2010 state budget

The government has proposed to cut oil production target in the state budget to 955,000 barrels per day (bpd) from 965,000 bpd due the low production trend during the first four months of this year, Kompas reported on Saturday.

During a hearing with the Commission VII of the House of Representatives (DPR) on Friday, Energy and Mineral Resources Minister Darwin Zahedy Saleh said that the lower oil production target was in line with the production trend in the first four months of this year.

?The lower production target is based on the production level in the January to April, and the performance in 2009,? he said, saying that the production level in the first four months of this year was only about 954,000 bpd.

The cut in the production target will result in the decline in the state revenues in the 2010 state budget by Rp 2.6 trillion.

The House members and the government are currently deliberating the revision of the 2010 state budget. The oil production target, which will be part of the economic assumptions to be included in the revised budget, will be used as the basis in calculating state revenues from oil and gas as well as in determining the fuel subsidy. (*)