JAKARTA (TheInsiderStories) – Indonesia’s energy state-owned enterprise, PT Pertamina finally released its 2018 financial report. Pertamina booked US$2.53 billion (Rp 36.43 trillion) during last year, lower than $2.54 billion in 2017. The falling was caused by the cost rocketing.
The falling last year’s profit has calculated the government’s receivables for the fuel price gap. It is based on President Regulation that stated that if the assigned fuel price is above its basic price, the government must pay its gap to Pertamina. But there is no payment yet. And for the real payment, Pertamina must discuss further with the government, related to fiscal and government’s financial condition.
Despite the decreasing profit, Pertamina revenue could hike 25.93 percent to $57.93 billion. Pertamina Financial Director Pahala Mansury said the revenue was contributed by compensation from government and income from the upstream sector, in accordance with the Indonesia Crude Price increase.
Other than that, gas sales jumped by 30 percent, supported by Mahakam block. Meanwhile, Pertamina’s retail business only grew by 2 percent.
By the decreasing profit, Pertamina decided to give Rp7.95 trillion dividend to the Indonesian government. It is 7.12 percent lower than the dividend from 2017’s profit.
The financial report and dividend have been agreed in Pertamina shareholders meeting held in the State-Owned Enterprise Ministry’s office. Besides, the meeting also agreed to restate the 2017’s financial report.
Previously, Pertamina is planning capital expenditures of $4.2 billion this year and will raise it to $7 billion in two years as part of plans to double its oil refinery capacity, chief executive Nicke Widyawati said.
Pertamina is under pressure from the government to expand its downstream production to reduce imports of refined oil products, which creates a trade deficit that weighs on the Indonesian rupiah.
“Starting from 2021, we will invest around $7 billion per year as these refineries (developments) are in progress,” Widyawati said in a meeting with journalists.
Pertamina plans to double its refining capacity to 2 million barrels per day (bpd) in 2026 from around 1 million bpd currently, Widyawati said, to meet national fuel demand of around 1.4 million bpd.
Pertamina expects to import 351,000 bpd of gasoline this year, up from 324,000 bpd in 2018. The company is currently working on at least seven refinery projects, including the new Bontang and Tuban refineries and the upgrading of the Balikpapan and Cilacap plants.
To finance the investment, Pertamina has the capacity to raise funds through borrowing, but the company is actively looking for partners for certain projects.
Pertamina budgeted investment funds worth of $1.9 billion for the exploration and development of 98 Upstream Oil and Gas projects in 2019. The investment constitutes 45 percent of this year investment funds in the Company’ Work Plan and Budget, which reached $4.2 billion.
The entire project was carried out by the company’ upstream oil and gas unit operating in Indonesia. The project consisted of 47 projects carried out by PT Pertamina EP, 29 projects by PT Pertamina Hulu Energi, 19 projects by PT Pertamina Hulu Indonesia, two projects by PT Pertamina EP Cepu, and one project by PT Pertamina EP Cepu Alas Dara Kemuning.
In 2019, Pertamina planned to complete 311 exploration and exploitation drilling wells in Indonesia, of which around 38 percent are in the Mahakam Working Area.
As of April, Pertamina has completed drilling of 77 wells in the country, consisting of 72 exploitation wells and 5 exploration wells in the existing Working Area.
Meanwhile, Pertamina is targeting $58.85 billion in revenue in 2019, up from $56.06 billion in 2018.
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