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High oil prices spur upstream oil and gas investment
The Upstream Oil and Gas Special Regulatory Task Force (SKK Migas) expects prices to remain relatively high amid geopolitical instability this year and to set in motion an upward trajectory for oil and gas investment in Indonesia.
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The Oyong oil and gas rig in the Sampang Block, located in the Madura Strait off the coast of East Java, is pictured in this undated photo. (SKK Migas/SKK Migas)
T
he Upstream Oil and Gas Special Regulatory Task Force (SKK Migas) projected prices to remain relatively high this year amid geopolitical instability, which set the positive trajectory of oil and gas investment in the near future.
Oil and gas investment amounted to US$2.63 billion in the first quarter of 2023, up 25 percent year-on-year (yoy), thanks to relatively high global oil prices, according to SKK Migas head Dwi Soetjipto.
Despite the significant increase, the investment amount is only 16.9 percent of the $15.54 billion target set for 2023.
Dwi sees global crude oil prices trading between $65 and $98 per barrel this year, with the upper end of that range to be reached if supply falls due to dwindling Russian exports at a time of soaring global demand.
“Good oil prices are expected to encourage more aggressive investment. But if there were to be an increase in inflation worldwide, global investors might hold back, due to a risk of crisis,” he said, adding geopolitical uncertainty made it difficult to predict oil prices.
“But in the next few years, we will use the $80 figure as reference to forecast future oil prices.”
Read also: Indonesia to accelerate oil and gas exploration amid high prices
