The Indonesian government reached a deal with lawmakers late Wednesday to revise down its targets for subsidized fuel consumption and crude production in its 2014 budget to make the figures more realistic, officials said.
The measure cuts the subsidized fuel consumption quota 4.2% to 46 million kiloliters, from 48 million kl previously.
Subsidies for fuel and biodiesel have been raised to Rupiah 246.5 trillion, from Rupiah 210.73 trillion, due to the currency weakening against the US dollar to Rupiah 10,600, from Rupiah 10,500.
The Indonesian Crude Price is unchanged at $105/barrel.
"Economic macro indicators have been changed, such as growth in the first quarter of 5.21%, rupiah exchange rate reached Rupiah 11,842 and crude oil lifting 797,000 b/d in average," said Ahmadi Noor Supit, chairman of budget committee.
Subsidized 88 RON gasoline consumption in 2014 is estimated at 29.43 million kl, down from from 32.34 million kl in the previous budget. Kerosene consumption is unchanged at 900,00 kl, and gasoil consumption is expected to rise to 15.67 million kl, from 14.635 million kl.
The revision raised the subsidized LPG quota to 5.013 million mt, from 4.783 million mt, according to the oil and gas directorate general's website.
January-April consumption of subsidized fuels has fallen below the original estimate due to lower demand, state-owned Pertamina has said. In the first four months of the year, the country consumed 9.48 million kl of subsidized RON 88 gasoline, 5.15 million kl of gasoil and 325,000 kl of kerosene.
In 2013, Pertamina distributed 46.3 million kl of subsidized fuels, from the allocation of 47.9 million kl.
The government and the parliament also agreed to cut the 2014 target for crude and condensate production by 6% to 818,000 b/d, from 870,000 b/d. The gas output target was lowered to 1.224 million barrel oil equivalent/d from the earlier target of 1.24 million boe/d.
That puts the 2014 oil and gas output target at 2.042 million boe/d, Supit said.
Officials have attributed the lower output to delays at some crude projects such as the Cepu block, which was originally expected to reach its peak output of 165,000 b/d by the end of this year, and Petronas' Bukit Tua, which was set to start in Q4 with a volume of 70 million cu ft/d of and 20,000 b/d. Both projects are now expected to reach the output targets next year.
Upstream regulator SKK Migas had earlier predicted the country's crude and condensate production would rise to 1 million b/d on average over 2015-17 due Cepu and other projects.
The main producers Indonesia is relying on to meet its 2014 crude target are Chevron Pacific Indonesia with 304,150 b/d, Pertamina EP with 127,420 and Total E&P Indonesie with 66,860 b/d.
The top gas producers are expected to be Total E&P Indonesie with 283.06 million boe/d, BP with 169,240 boe/d and ConocoPhillips with 170,050 boe/d.
Indonesia is making a concerted effort to accelerate exploration and development in the country as it has seen its crude output fall because of natural decline at aging fields.
The country missed its 2013 crude and condensate production target of 840,000 b/d by pumping around 826,000 b/d last year. Officials blamed natural decline and unplanned shutdown.
Indonesia's oil and gas proven reserves stand at 3.7 billion barrels and 101.54 trillion cu ft. The country is estimated to contain 574 trillion cubic feet of potential shale gas. The shale gas potential is higher than the CBM and natural gas potential of 453.3 Tcf and 334.5 Tcf, respectively, according to energy and mines ministry's data.
