Palembang to receive Rp 600 billion from oil and gas revenues

The provincial administration of South Sumatera will receive about Rp 600 billion 1US$=Rp 9500) from oil and gas revenues this year, according to a senior official at the Ministry of Energy and Mineral Resources.

Speaking at an oil and gas seminar at the province's capital Palembang on Friday, the director for oil and gas exploration and production Kardaya said that the oil and gas receipts should be shared with regency administrations.

"Based on the average oil price of US$24 per barrel, the government's total revenues from oil and gas from the province would reach about Rp 20 trillion," he said, adding that the local government's share would amount Rp 60 billion after tax.

Under the existing oil and gas law, the government receives 85 percent of the oil production and 65 percent of gas production. With the implementation of the intergovernmental fiscal balance law, 15 percent of the government's oil share and 30 percent of the government's gas share go to the provincial cal authority's coffer.

Previously the oil and gas revenues went the central government, which later distributed part of the revenues to the provincial administrations through the state budget.

Kardaya estimated that South Sumatera would receive much more funds from the oil and gas production in the future because a large part of the province's oil and gas resources had yet to be developed.

According to him, the oil reserves in the province reach a total of 22.23 million barrels or about 2.44 percent of the country's total oil reserves of 9,100 million barrels, while its gas reserves could reach 2,580.50 billion cubic feet or about 1.87 percent of the country's total reserves of 137,800 billion cubic feet.(*)