JAKARTA (IFT) - The Ministry of Energy and Mineral Resources proposes for the Indonesian Crude Price in 2012 to be in the range of US$ 75 to US$ 95 per barrel, and lifting to be between 950 thousand to 970 thousand barrels per day. The proposal arises as there are concerns about oil supplies from the Middle East due to the political upheavals and security issues in the region, said government officials. The government hopes that oil supplies from the Organization of Petroleum Exporting Countries (OPEC) can be the determining factor to slow down the oil price increase.
Evita Herawati Legowo, Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, said in early 2011 that oil price increased significantly due to the non-fundamental aspects, such as market sentiments caused by the fear of oil supply shortage from the Middle East. The Ministry of Energy noted that Indonesia's oil price in May is US$ 115.05 per barrel, lower from the US$ 123 per barrel in April.
"The recent development in world oil prices can be seen from WTI’s (West Texas Intermediate) oil, which is at US$ 100.59 per barrel and Brent’s oil at US$ 115.03 per barrel. High oil prices are also causing the economic slowdown in some areas, " she said Monday.
Kurtubi, oil analyst from the University of Indonesia, explained that next year’s world oil price movements will be driven by increasing demand, especially from China and India. Europe’s demand for oil is estimated to remain the same. The increase in oil consumption will not be followed by higher supplies from oil-producing countries.
Gde Pradnyana, Head of Public Relations, Security, and Formalities Division at BP Migas (Executive Agency for Upstream Oil and Gas), said that the Agency suggests that next year’s production target and oil lifting of oil to be in the range of 930 thousand to 950 thousand barrels per day.
BP Migas is not setting the same target as the government, as there is a high level of natural decline in existing oil blocks. "Developing existing fields will only compensate production which has a 15 percent natural decline. If we do nothing, the production could be under 800 thousand barrels per day," he said. (*)
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