JAKARTA (TheInsiderStories)—The investments in the upstream oil and gas sector during the period of January-April 2018 had been significantly increasing, along with the steady rise of oil prices at the global market that had reached more than US$70 per barrel recently.
Based on data from the Upstream Oil and Gas Regulatory Special Task Force, the investments for exploitations and explorations during January-April 2018 reached US$3.18 billion or around Rp44.7 trillion. During January-March alone the investments amounted to US$2.40 billion, as compared to only US$1.9 billion at the same period last year.
The realized investments, however, were still below target, which was set at 22 percent of the total US$14.2 billion in the work plan and budget (WP&B) of contractors.
But the upstream oil-gas authority SKK Migas Chairman Amien Sunaryadi said recently that they are optimistic that as the oil prices will be steadily rising, the investments in the upstream oil and gas sector will be also rising.
Oil prices have been continually increasing at the global market, particularly after the geopolitical tension in the Middle East which was mainly caused by the decision of the US President Donald Trump to re-impose sanctions against Iran after exiting from the nuclear deal.
Since early this year the price of West Texas Intermediate (WTI) for June 2018 delivery at New York Mercantile Exchange (NYMEX) had increased by 17.7 percent, reaching US$70.70 per barrel during trading last Friday, which was the highest since December 2014. The price of Brent crude oil at London market reached US$77.32 per barrel.
The Indonesian Crude Price (ICP) in April 2018 reached US$67.43 per barrel, which was the highest since November 2014, as compared to the oil reference price at the state budget 2018 at US$48 per barrel.
The rising prices of oil have pushed up the economics of all oil and gas projects in Indonesia, making investments in the upstream oil and gas sector–exploitations and explorations, more feasible and attractive.
With such consideration, Energy and Mineral Resources Minister Ignasius Jonan is optimistic that the government will be able to double the target of investments in the upstream oil and gas sector this year to US$20 billion as compared to the target in 2017. (*)