Pertamina to double profit this year<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina said on
\nMonday it expected to double its consolidated net profit this
\nyear to Rp 6.9 trillion (US$873 million) from Rp 3 trillion last
\nyear as a result of better operational efficiency.<\/p>\n
Pertamina President Baihaki Hakim said that even though
\nrevenue would drop to Rp 64 trillion from last year's Rp 79
\ntrillion, the company would still be able to outdo last year's
\nnet profit.<\/p>\n
"Production costs have dropped in line with the company's
\ncurrent restructuring process," he said in a news conference.<\/p>\n
Pertamina's restructuring program aims at wiping out
\ninefficiencies that have plagued the giant state company for
\nyears.<\/p>\n
An audit by PriceWaterhouseCoopers of Pertamina for the period
\nfrom April 1996 to March 1998 found inefficient practices and
\nlosses of income opportunities amounting to some $4.69 billion.<\/p>\n
This year, however, Pertamina predicted its expenditure to
\ndecline to Rp 57 trillion from Rp 76 trillion last year.<\/p>\n
Pertamina's crude oil production costs for the 1999\/2000
\nperiod have dropped to $3.65 per barrel from $3.86 in 1998\/1999,
\nwhile the costs of producing gas dropped to 30 U.S. cents per
\nmillion cubic feet from 40 cents.<\/p>\n
Baihaki said the cheaper production costs were a result of
\nsimplifying working procedures.<\/p>\n
Last year Pertamina booked a consolidated net profit of only
\nRp 1 trillion for the period from April 1998 to March 1999.<\/p>\n
The company's consolidated assets, including that of its six
\nsubsidiaries, rose by Rp 5 trillion to Rp 69.4 trillion during
\nthe year.<\/p>\n
Pertamina's own production units made a net profit of Rp 821
\nbillion in 1998\/1999, against Rp 198 billion a year earlier.<\/p>\n
Although its crude output remains constant, Pertamina managed
\nto book higher revenues that year due to the sharp depreciation
\nof the rupiah against the U.S. dollar.<\/p>\n
The six Pertamina subsidiaries are PT Elnusa (electronics), PT
\nPatra Jasa (hotels and restaurants), PT Pelita Air Services (air
\ntransportation), PT Patra Dok Dumai (shipping docks), PT Tugu
\nPratama (oil and gas insurance) and PT Pertamina Tongkang (small
\nvessels provider).<\/p>\n
Aside from placing the internal restructuring program as its
\npriority, Pertamina also aims to restructure regulations of the
\noil and gas sector, which according to Pertamina are inhibiting
\nits growth.<\/p>\n
Baihaki said that Pertamina was bound by law to transfer all
\nits earnings to the government, which would replace Pertamina's
\ncosts and pay the company fees in turn.<\/p>\n
"So don't compare us with Petronas," he said referring to the
\nMalaysian state oil and gas company whose management once learned
\nfrom Pertamina.<\/p>\n
Baihaki noted that reforming the oil and gas regulations and
\nthe company's human resources and organization were key to seeing
\nPertamina become a world class company. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-to-double-profit-this-year-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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