Tumbling Oil Lifting Poses Threat to State Revenue

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  • Blok Cepu, Bojonegoro. TEMPO/Mahanizar

    Blok Cepu, Bojonegoro. TEMPO/Mahanizar

    TEMPO.CO, Jakarta – Askolani, the Finance Ministry’s director general for budget, said the country’s oil lifting in 2019 would plunge to 500,000-600,000 barrels per day (bpd), and that this would pose a threat to state revenue.

    According to the macro assumptions in the 2015 Revised State Budget (APBN-P), Indonesia’s oil lifting would be at 825,000 bpd.

    Askolani said the figure was made on the assumptions that there would be additional yet temporary oil lifting from Cepu Block. “Yes it will rise, but it’s going to drop again,” he said at the parliament complex on Wednesday, April 8, 2015.

    Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) recorded late March the nation’s oil lifting only hit 763,000 bpd—quite a far cry from the 825,000 bpd pegged in the 2015 APBN-P.

    “All that I know is that is the figure today. I can’t remember the average figure since the beginning of last year,” SKK Migas secretary Gde Pradnyana said at the Energy and Mineral Resources (ESDM) Ministry on Tuesday, March 24, 2015.

    I Gusti Nyoman Wiratmadja, the acting director general for oil and gas at the ministry, said the failure was attributed to the natural decline in a number of exploration wells and the fact that some contractors had curbed its production in light of the tumbling global oil prices.

    Wiratmadja added this situation was normal in the first quarter of a year, and that production would again climb in the second quarter. He said in October—when production peaks—Cepu Block’s production would rocket to 165,000 bpd. “I hope there won’t be any setbacks to production,” he said.