The government is optimistic that the country will be able to reach next year’s oil production target despite it being set slightly higher than the initially proposed figures.

The government and House of Representatives’ budget committee agreed to set the oil production target in the draft 2017 state budget at between 750,000 and 790,000 barrels of oil per day (bopd).

Energy and Mineral Resources Ministry director general for oil and gas, IGN Wiratmaja Puja, said the target was still reasonable as it was not much different from the initial target of 740,000 to 760,000 bopd.

"It is still achievable because [our initial target] is within the new range," he told reporters.

The maximum target of 760,000 bopd had initially been proposed by the government as many oil and gas contractors had suspended exploration and well-drilling activities in the past two years due to low global oil prices. Data from the Upstream Oil and Gas Special Regulatory Task Force (SKKMigas) shows that only 13 per cent of all planned seismic and non-seismic surveys had been conducted as of June. Furthermore, only 30 per cent of 441 development wells had been drilled so far.

However, things have slowly been looking up since the beginning of the year. Benchmark West Texas Intermediate (WTI) traded at $45.09 per barrel from around $30 in January, according to figures from Bloomberg. Meanwhile, Brent Crude traded at $46.59 per barrel.

The rising oil prices have led the government and House to agree on setting the Indonesia Crude Price (ICP) at $40 to $50 per barrel as the Energy and Mineral Resources Ministry predicts that oil price will reach the $60 per barrel point by year-end.