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tate-owned oil and gas company PT Pertamina decided to cut its investment this year by almost half in response to the fall of global oil prices.

Pertamina finance director Arief Budiman said the company'€™s capital expenditure for this year was set at US$4.4 billion, lower than an earlier plan of up to $7 billion.

'€œThe reduction came after we reviewed several investments that were not rational, such as the construction of Pertamina Tower. Despite the cut, we are still looking to support the upstream sector because it is still our value generator,'€ Arief said.

He said the company would continue to prioritize the upstream sector, which would receive a budget allocation of around $3.3 billion, or 75 percent of the company'€™s total budget.

Among the investments that were being reviewed was the company'€™s plan to build a 99-story building on a 5.7-hectare plot of land in Rasuna Epicentrum in Kuningan, South Jakarta.

The tower would serve as a symbol for the company'€™s goal of becoming a world-class energy company. The groundbreaking of the tower, which is supposed to be 530 meters high, had taken place in late 2013 and the project was initially expected to be completed by 2020. However, no significant progress has been seen so far.

Oil and gas companies have been suffering from the decline in oil prices, which resulted from growing supply in the global market partly due to the increase in the US'€™ shale oil production. West Texas Intermediate (WTI) crude dropped to US$50.16 per barrel in London on Thursday, according to Bloomberg.

Following pressures from oil prices, a number of oil and gas contractors in the country have been considering the possibility of recalculating their work plan and budget to offset the plunging price, according to the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas).

The Indonesia Petroleum Association (IPA) has previously said that companies would cut down their capital expenditure by up to 25 percent.

In a recent research note, the global energy think-tank Wood Mackenzie estimated that global companies need to cut costs by $170 billion or by around 37 percent to maintain net debt at 2014 levels if the Brent price stayed at around $60 per barrel.

Brent slid as much as 3.4 percent to $58.46 a barrel in London on Thursday.

SKKMigas earlier said that it was talking with oil and gas contractors in the country to encourage them to negotiate contracts with service providers.

The negotiation was aimed at cutting down the firms'€™ cost without affecting their production.

'€œWe want a reduction in the value of activities but not the number of the activities,'€ SKKMigas secretary Gde Pradnyana said.

Indonesia, a former member of the Organization of Petroleum Exporting Countries (OPEC), has been struggling to maintain production amid declining reserves as oil fields have depleted. The country is targeting national production to be 825,000 barrels of oil per day (bopd) this year.

For this year, Pertamina plans for total production of 329,440 bopd, consisting of outputs both from domestic and overseas fields. Meanwhile, for gas production, the company expects to record 1,667.59 million standard cubic feet per day (mmscfd).