Government Proposes Oil and Gas Lifting Target in the 2022 State Budget; What's the Value?

Oil and gas (migas) remain a crucial indicator for the Indonesian government in formulating the state budget. Therefore, the government always includes assumptions regarding oil and gas lifting and oil prices in the State Budget Draft (RAPBN).

In the 2022 State Budget Draft (RAPBN), the government projected oil lifting to reach 703 thousand barrels of oil per day (bopd). This figure is almost identical to the 2021 outlook, which ranged from 680 to 705 thousand bopd. For gas lifting, the government targeted 1,036 thousand barrels of oil equivalent per day (boepd), higher than the 2021 outlook of 987-1007 thousand boepd. Thus, the total target for migas lifting in 2022 was 1,739 thousand boepd.

The Indonesian Crude Price (ICP) was set at US$63 per barrel. Meanwhile, the 2021 outlook ranged from US$55 to US$65 per barrel.

National migas lifting has shown a declining trend over the past 10 years. It even reached its lowest point in 2020 at 1,690 thousand boepd, a 6.27% decrease from the previous year.

In a working meeting with Commission VII of the Indonesian House of Representatives (DPR RI) at the end of January, the Minister of Energy and Mineral Resources, Arifin Tasrif, targeted oil lifting of 2,057 thousand barrels of oil equivalent per day in 2024. This comprises oil lifting of 743 thousand barrels per day and gas lifting of 1,314 thousand boepd. This target will be supported by wells currently under exploration, which will contribute to national migas lifting, and by increasing production from aging wells using the latest technology, albeit at a higher cost.