Photo by SKK Migas

JAKARTA (TheInsiderStories) – Upstream oil and gas companies ponied up just US$5.57 billion on capital expenditures from January to September (9M), and seem unlikely to meet a stated full-year goal of $22.2 billion, according to data compiled by regulatorThe Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas).

The hesitant investment is a further Indication that the once mighty oil and gas industry is falling into disrepair, a combination of poor policy decision-making from the government side exacerbated by a feeble recovery of crude oil prices.

On the other hand, the regulator did manage to collect $9.59 billionn in State revenue during the same period. The government initially aimed to collect a total of $12.20 billionn in State revenue from the upstream sector in 2017.

Chart by SKK MIgas

Meanwhile cost recovery, a reimbursement scheme of production expenses paid via additional production to contractors, was adjusted downward to $7.76 billion versus a formerly estimated $10.7 billion.

SKK Migas chief Amien Sunaryadi blamed project delays for the sluggish capital spending. Oil and gas production did in fact hit an average of 1.934 million barrels of oil-equivalent per day in 9M, close to producers’ targeted output of 1.965 million barrels.

Writing by M Edy Sofyan and Yosi Winosa, Email: