JAKARTA (TheInsiderStories) – The largest oil and gas producer, PT Pertamina, plans to spends around US$92 billion during 2020 – 2024, said the director today. Majority of the expenditure allocated for the upstream sector worth of $64 billion, downstream sector of $20 billion, gas, power, new and renewable energy (NRE) of $8 billion.
“In terms of financing, (we considered) its from commercial banks, multilateral, from SWF (sovereign wealth fund) and also of course from SMI (Sarana Multi Infrastruktur), and other financiers,” said finance director, Emma Sri Martini, in a virtual seminar on Thursday (03/04).
In detailed, for mergers and acquisitions, Pertamina prepared $45 billion involved on upstream project and organic growth of $14 billion. Then, for the downstream sector, the company allocated $18 billion for new refineries and upgrading of existing factories, and $2 billion for other purposes. As for the gas, power and NRE sectors, for pipeline projects $4 billion, liquefaction and regassificatio unit $300 million, power plants $3 billion, and others $700 million.
In January 2021, upstream oil and gas of the energy holding firm has reached $873.2 million, showed by the Special Task Force for Upstream Oil and Gas Business Activities (SKKMigas) data. The investment was used to support the exploration activities, included PT Pertamina EP, PT Pertamina Hulu Mahakam, ENI East Sepinggan, PT Pertamina Hulu East Kalimantan, and PT PHE OSES.
Currently, Pertamina has started the construction of refinery development master plan (RDMP) Balongan to increase the production capacity from 125 million barrel steam per day (MBSD) to 150 MBSD. Its also be able to produce naptha processing from 5.29 MBSD to 11.6 MBSD. The refinery will be able to process Heavy Mix Crude or Lighter Crude Oil. Its hoped that this project can be completed in March 2022.
The energy firm also has signed a memorandum of understanding , PT Nindya Karya, and a consortium of South Korea companies represented by the DH Chairman Global Holdings Co. Ltd. for RDMP Dumai project. This project have a valued of $.5 billion and could increase the production capacity of domestic oil and fuel oil and reducing dependence on oil imports.
The mega-project is one of the National Strategic Projects as referred to listed in Presidential Regulation Number 56 of 2018. Last month, the government-owned energy firm has raised $1.9 billion from the issuance of yankee bonds. Pertamina
Last year, the oil and gas holding has appointed six banks to seek loans in the form of a bridging loans around $3 billion for expansion. The banks are BNP Paribas, Citi, Credit Agricole, MUFG Bank, Societe Generale, and Sumitomo Mitsui Banking Corp.
The CEO, Nicke Widyawati, has stated that Pertamina needs funding around $133 billion until 2026 to boost the production capacity. Of this amount, will be closed through external funding, initial public offering, and project financing about $49 billion.
Last year, she said, the company prepared funds around $6.2 billion for a number of national strategic projects. In addition, she stressed, the company need funds to maintained the upstream production caused the many are old wells. Beside from internal funding, 10 percent of the funds its expecting from project financing, 28 percent from external financing, and 15 percent from equity financing.
Pertamina’ funding options can be from stocks (partnership or initial public offering), debt securities (average tenure 1 – 10 years and limited by debt to equity ratio), and banking (average tenure 4 – 5 years). In September 2020, President Joko Widodo has injected assets worth of Rp2.1 trillion ($148.94 million) to improve the capital structure of the producer.
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