Oil, gas revenue target cut down

The government and the House of Representatives state budget committee agreed to a much lower oil and gas revenue target this year amid the current drop in global oil price, lower oil lifting assumption, and the weakening of the rupiah against the US dollar.

The agreement was reached during a deliberation of the revised 2015 state budget. Under the revised budget, oil and gas revenue target is cut down to Rp 139.36 trillion, from Rp 326.96 trillion in the original 2015 state budget.

The cut in the revenue projection comes after oil lifting assumption in the revised budget is slashed to 825,000 bpd from 900,000 bpd in the original budget, and Indonesia Crude Price (ICP) assumption reduced to US$60 per barrel from $105.

The government and the House have also agreed on a lower oil and gas cost recovery of US$14.1 billion, compared to $16.5 billion proposed by the government.

Lawmakers said that the lower cost recovery is in line with the lower oil lifting assumption. In fact, some said that with oil lifting target for this year has been drastically reduced to 825,000 bpd, the cost recovery should have set at a much lower amount of $12.5 billion. (*)