The High World Oil Price Is Called An Opportunity For Indonesia To Increase Production

JAKARTA - Head of Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto conveyed that the global situation in complicated conditions due to the war between Russia and Ukraine had an impact on world energy and food prices, thereby increasing global inflation.

"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," said Dwi Soetjipto, in his remarks at the CEO Forum event in Jakarta, Monday 11 July.

He detailed 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.

Likewise, global gas prices also experienced a significant increase in prices, reaching above US$25 per Million British Thermal Unit (MMBTU).

With the current spot price of LNG in the range of 43 US dollars per MMBTU or the equivalent of 240 US dollars per barrel of oil equivalent.

Although production and lifting are still experiencing challenges, continued Dwi, the upstream oil and gas industry in the first semester of 2022 has achieved several positive achievements, mainly state revenues which have reached 9.7 billion US dollars, the reserve replacement ratio (RRR) which has been in the figure. 77 percent and cost recovery was successfully maintained at a low level of 3.2 billion US dollars.

Present on the same occasion, Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif conveyed the challenges of the upstream oil and gas industry as a result of the COVID-19 pandemic and challenges in the energy transition era, as well as the changing role of the upstream oil and gas industry in the future which will become raw materials industry.

On this occasion, the Minister of Energy and Mineral Resources expressed his appreciation for the contribution of the upstream oil and gas industry to state revenues and his hope that oil and gas production and lifting can be increased.

"The government appreciates the contribution of the upstream oil and gas industry to state revenues. "In 2021, state revenues from the upstream oil and gas sector will reach 13.7 billion US dollars or 188% of the target of 7.8 billion US dollars," he said.

For information, until June 2022, the contribution of upstream oil and gas has reached 9.7 billion US dollars, or 97 percent of the 2022 state budget target of 7.8 billion US dollars.

Arifin Tasrif emphasized that with the Indonesian Crude Price (ICP) in June which reached US$ 117 per barrel, it is hoped that KKKS can increase production and lifting of oil and gas to meet domestic oil and gas needs.