BPMigas upbeat on oil lifting target

Alfian ,  The Jakarta Post ,  Jakarta   |  Wed, 07/09/2008 10:48 AM  |  Business

Encouraged by healthy oil production in the year's first semester, upstream oil and gas regulator BPMigas is optimistic the country's crude oil lifting value will exceed the government's year target.

BPMigas head R. Priyono told reporters in Jakarta on Tuesday increased daily output in the year's first semester helped total output rise to more than 1 million barrels.

"If we maintain this trend until the end of this year, we are optimistic we can meet the oil lifting target in the state budget," Priyono said.

BPMigas calculates oil production by measuring the volume of oil outputted from mines, while the Finance Ministry calculates the oil lifting value by measuring oil quantities at shipping posts.

BPMigas reported that as of June, the country's average oil production had reached 986,749 barrels of oil per day (bopd), up from its target of 977,000 bopd.

However, as of the end of May, the average oil lifting amount was 898,284 bopd, well below the government's target of 927,000 bopd.

Priyono said the large disparity between the oil production and lifting was because 62,277 barrels produced by PT Chevron Pacific Indonesia had been exchanged for gas produced by ConnocoPhillips to support its oil production activities in Duri, Riau province.

Despite failing to meet the oil lifting target, Priyono said BPMigas was planning to intensify oil production in three of its plants.

He also said oil explorations carried out in the first semester had discovered 35.82 million barrels worth of oil reserves.

Priyono denied a recent report by the Indonesian Corruption Watch (ICW), which states that state earnings from oil and gas production from 2000 until 2007 fell short by Rp 194 trillion due to weak monitoring by BPMigas.

He said the ICW had mistaken production data for lifting data on the websites of the Finance Ministry and the Energy and Mineral Resources Ministry.

He said the ICW had also failed to consider that oil and gas companies in the country were freed from paying several types of taxes, including added value tax and land and building tax.

Priyono said he would give clarifications to the Corruption Eradication Commission on Wednesday.

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