Energy ministry expects oil and gas lifting to reach 1.91 million boepd in 2021
The government expects domestic ready-to-use oil and gas production to reach between 1.76 million and 1.91 million barrels of oil equivalent per day (boepd) in 2021, as part of macroeconomic assumptions in next year’s draft state budget.
The expectation is higher than this year’s expected 1.70 million boepd but lower than last year’s 1.80 million boepd due to corresponding changes in crude oil prices, Energy and Mineral Resources (ESDM) Minister Arifin Tasrif said on Monday.
The government expects the local benchmark Indonesian Crude Prices (ICP) to hit between US$40 and $50 per barrel next year, rebounding from this year’s $33 price tag but still lower than last year’s $62, which was before COVID-19 ravaged the global energy industry.
“The movement of oil prices is very hard to predict,” Arifin emphasized before a meeting with the House of Representatives’ Commission VII overseeing energy.
The House is currently working on the 2021 annual state budget (APBN), which relies on ministry forecasts to estimate state revenue.
Energy ministry data also shows that the decline in ready-to-use production was entirely driven by lower expectations over oil lifting. The government expects increased gas lifting next year, even when compared to 2019.
Indonesia plans to become a major global gas exporter by 2030 as domestic oil production has been unable to reach export levels. Gas exports are expected to help plug the country’s gaping trade deficit.
Global oil and gas prices collapsed in the second quarter of 2020 after many countries, including Indonesia, implemented lockdowns that curbed economic activity in containing COVID-19.
Compared to the energy ministry’s estimates, international credit rating agency Fitch Ratings expects global crude oil prices to average $45 per barrel in 2021, while the United States’ Energy Information Administration (EIA) expects an average of $47.88 per barrel that same year.