During this difficult time, of course, the state is in need of economic circulation. We believe investment in the upstream oil and gas sector will have a subsequent effect on the Indonesian economy, so it will help in economic recovery.
Jakarta (ANTARA) - The Indonesian Crude Price (ICP) rose by an average of US$4 to US$42 per barrel in the year ending September 30, 2020, from US$38 per barrel set in the revised 2020 state budget.

The increase added US$6.99 billion to state revenues, or 119 percent higher than the target of US$5.86 billion set in the revised 2020 state budget, Chief of the Communication, Public Information, and Cooperation Service of the Energy and Mineral Resources Ministry Agung Pribadi noted in a written statement released on Tuesday.

The realized ICP surpassed the target of US$38 per barrel, he pointed out.

The Upstream Oil and Gas Special Regulatory Task Force (SKK MIgas) has projected ICP to average at US$40 per barrel this year due to the second wave of COVID-19. Consequently, state revenues from the upstream oil and gas sector will reach US$7.2 billion at the end of 2020.

The realization of cost recovery budget until September 2020 reached US$5.97 billion, representing 75.5 percent of the targeted US$8.12 billion.

Meanwhile, investment realization in the third quarter of 2020 mostly came from Pertamina E&P, CPI, Pertamina Hulu Mahakam, BP Berau, and Eni East Sepinggan. The achievement has had a major impact on the national economy.

"During this difficult time, of course, the state is in need of economic circulation. We believe investment in the upstream oil and gas sector will have a subsequent effect on the Indonesian economy, so it will help in economic recovery," SKK Migas Chief Dwi Soetjipto stated.

Soetjipto noted that the upstream oil and gas sector had borne the brunt of the COVID-19 pandemic.

"As a result of the second wave of the COVID-19 pandemic, the global demand for oil is still unstable. This will have an impact on the movement of global crude prices," he affirmed.

The COVID-19 pandemic has led to the postponement of several projects and reduction of investment. The low selling prices have affected cash flows. Funds will be focused on developing productive oil and gas concessions. Global investment in the oil and gas sector is projected to decline 30 percent.

Related news: PGN commences 367-km crude oil pipeline construction in Rokan Block
Related news: Oil, gas industry to evade imports despite plummeting crude prices
Related news: Indonesian Crude Price rises US$3.44 per barrel in November

Translator: Afut Syafril N/Suharto
Editor: Sri Haryati
Copyright © ANTARA 2020