The budget allocation for the improvement of road and bridge infrastructure in the 2019 Regional State Budget (APBD) has increased sharply compared to the infrastructure development in 2018.
"The construction of infrastructure for roads allocated at Rp700 billion in the 2019 regional budget increases five-fold compared to infrastructure development in 2018," Deputy Chairperson of the Bojonegoro Regional Parliament, Sukur Priyanto, stated in a conversation with Antara on Saturday.
The size of the budget allocation for infrastructure development, according to him, cannot be separated from the sharp increase in the acquisition of oil and gas profit-sharing funds (DBH Migas) in 2019.
However, infrastructure development by utilizing the oil and gas DBH budget must have a continuous limit, he continued.
"Yes, at least, the focus of infrastructure development by utilizing the acquisition of oil and gas DBH in the range of 2-3 years must be completed," he explained.
Henceforth, according to him, the acquisition of the regional oil and gas DBH (profit-sharing fund) must be focused on various other interests whose principles spur the economy of the community, including education and health.
"However, peak oil production in our area has a time limit, which will affect the acquisition of oil and gas DBH," he added.
He estimated the peak production of the Cepu Block oil, with ExxonMobil Cepu Limited (EMCL) operators, as well as the Sukowati field, with the operator Pertamina EP Asset 4 Field, to reach up to 250 thousand barrels per day, lasting only around 10 years.
Therefore, he regretted that the peak production of the Cepu Block oil as well as the Sukowati field oil production, which is now managed by Pertamina EP Asset 4 Field, is too forced to produce.
"Oil production in the area should not be directly forced, as an effort to save the acquisition of oil and gas DBH for producing regions," he remarked.
He gave an example that if the production of the Cepu Block, which has now reached an average of 210 thousand barrels per day, is made an average of 150 thousand barrels per day, then the acquisition of oil and gas DBH in the producing regions can last a long time.
Facing the increasing budget allocation from oil and gas DBH for infrastructure development, as explained by Sukur, the Regional Legislative Assembly (DPRD) is obliged to guard the utilization of oil and gas DBH allocations.
"The DPRD must oversee the process of infrastructure development, because there will be a lot of road building work since 2019. If necessary, the DPRD must form a special team in the process of road construction, which will start in 2019," he noted.
Regarding the increase in oil and gas DBH in the local area, the Head of the Bojonegoro Regency Regional Revenue Agency, Herry Sudjarwo, stated that the prognosis for obtaining the regional oil and gas DBH was stipulated at Rp2.6 trillion in the 2019 State Budget.
In fact, the regency government had previously targeted the acquisition of oil and gas DBH from the Cepu Block oil production, Sukowati field, as well as other fields, in 2019 to only amount to Rp1.3 trillion.
The Ministry of Finance`s Directorate General of Fiscal Balance reported that the acquisition of regional oil and gas DBH in the 2019 State Budget is set to reach Rp2.9 trillion from the target of East Java oil and gas DBH acquisition, amounting to Rp4.95 trillion.
From the available data, the acquisition of oil and gas DBH does not include the acquisition of profit sharing from capital participation or "participating interest" (PI) oil in the Cepu Block.
"The acquisition of oil and gas DBH in 2019 does not include the PI profit sharing of the Cepu Block," he added.
Both Sudjarwo and Priyanto explained that they could not speak much regarding the profit from the capital participation of the Cepu Block, which until now has not been obtained by the region.
"I did not comment first about the profit from the capital participation of the Cepu Block," Priyanto remarked, refusing to provide further information.
Although the acquisition of the regional oil and gas DBH is targeted to reach Rp2.9 trillion, Sudjarwo noted that the region only sets the target for obtaining oil and gas DBH at Rp2.032 billion in the 2019 Regional Budget.
The calculation, among others, in the distribution pattern of the new quarter IV oil and gas DBH was distributed in the following year. For the oil and gas DBH for the fourth quarter of 2018, the amount of around Rp300 billion will only be received by the region in early 2019.
The amount of oil and gas DBH acquisition in 2019 is inseparable because the stable oil production of the Cepu Block field is around 210 thousand barrels per day on average, and even now the production from the Sukowati field tends to increase.
"The current factor of world oil prices of US$70 per barrel also influences the increase in the acquisition of oil and gas DBH," he pointed out.
Editing by Eliswan Azly
Reporter: Eliswan Azly
Editor: Yosep Hariyadi
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