The plunge in the global oil prices coupled with the withdrawal of contractors from several strategic projects are to blame for low oil and gas revenues.

KATADATA - The plunge in global oil prices to US$ 36 per barrel last year has hit revenue flows from the oil and gas sector. The government’s net revenue (after cost recovery) last year was only IDR 173 trillion. This is a decrease of 55 percent on the 2014 figure of IDR 381 trillion. 

For the first time, government revenues were lower than cost recovery. In 2015, cost recovery was IDR 186 trillion, which was IDR 9 trillion more than the government’s net revenue. In addition, the revenues of oil and gas contractors fell significantly last year. 

Overall, revenues from the oil and gas sector, which include the government’s net portion, the contractors’ portion, and the cost recovery, decreased 44 percent over the period. Besides the plunge in the global oil prices, which hit the lowest level in the last 13 years, another contributing factor was the delay in several strategic projects, such as Banyu Urip Field, Ridho Field, Bukit Tua Field, and Kepodang Field. The delays were the result of unplanned shutdowns in several oil and gas blocks due production facility disruption and external problems. 

The head of the government’s Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Amien Sunaryadi, also attributed the low revenue from the oil and gas sector to the 28 percent decrease in Indonesian oil and gas production, which was the biggest fall in the last five years.

Febrillian Pratami