The High Price Of Oil And Gas Is An Opportunity For Contractors To Increase Production And Lifting

Illustration. (Photo: Doc. Antara)

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) projects that the systemic global geopolitical situation due to the Russia-Ukraine war will have an impact on rising world energy and food prices, which will drive global inflation.

Head of SKK Migas, Dwi Soetjipto, at the CEO Forum event in Jakarta, Monday, July 11, said that the price of expensive oil and gas commodities was a golden opportunity for Cooperation Contract Contractors (KKKS) to increase production and lifting.

"The high price of world oil and gas is a golden opportunity for KKKS to increase production and national oil and gas lifting which is currently still far from the target of the 2022 State Budget and the long-term plan (LTP) of the upstream oil and gas industry, so a recovery plan program is needed", he said, quoted from Antara, Tuesday, July 12.

Dwi said that world oil prices have been around 100 US dollars per barrel for a long time and the average price until 2023 is estimated to be above 80 US dollars per barrel.

World gas prices also experienced a significant increase in prices to above 25 US dollars per MMBTU. The spot price of liquefied natural gas is currently in the range of 43 US dollars MMBTU or the equivalent of 240 US dollars per barrel of oil equivalent.

Although production and lifting are still experiencing challenges, explained Dwi, the upstream oil and gas industry has achieved several positive achievements throughout the first half of 2022.

"State revenues have reached 9.7 billion US dollars, the reserve placement ratio (RRR) has reached 77 percent, and cost recovery has been successfully maintained at a low level of 3.2 billion US dollars", he explained.

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif appreciated the contribution of the upstream oil and gas industry to state revenues.

He hopes that KKKS can maintain and increase oil and gas production and lifting to meet domestic energy needs in the midst of high crude oil prices (ICP) which are perched at 117 US dollars per barrel in June 2022.