Government, Pertamina eye LNG plants settlement
Leony Aurora, The Jakarta Post, Jakarta
The government and Pertamina are still discussing whether liquefied natural gas (LNG) plants will be included as part of the state oil and gas firm's fixed assets, a top government official says.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the energy and finance ministries had reached an agreement on the revaluation of Pertamina's fixed assets, but still left the issue of LNG plants unsettled.
Including the LNG plants, the two ministries agreed to peg the accumulated assets at about Rp 124.6 trillion (US$13.12 billion).
"These (assets) also included the fixed assets of Pertamina and its subsidiaries within the country and abroad," said Purnomo on Tuesday.
Media reports have previously stated that the finance ministry's directorate general of taxation had pegged the fixed assets value at Rp 126 trillion.
The government will leave all oil refineries across the country -- which in total produce almost 1 million barrels of oil per day -- that are currently operated by Pertamina to remain in the state enterprise's hands.
However, whether the country's two LNG plants should be owned by Pertamina or the Oil and Gas Upstream Regulatory Agency (BP Migas) was not clear.
"We must calculate if they (LNG plants) will bring benefit to the company," said Purnomo.
Indonesia has two LNG plants, namely in Bontang -- the larger of the two -- in East Kalimantan and in Arun, Nanggroe Aceh Darussalam.
The asset's verification is part of the process to determine Pertamina's initial capital. The company, which used to also be a regulator until 2002, needs to set assets and capital figures to conduct regular corporate activities, such as securing loans or issuing bonds.
The government will determine the actual capital value based on the total of fixed and financial assets deducted by the company's debts.
Pertamina's spokesman Abadi Poernomo said that the LNG plants should remain with Pertamina, as the company was bound by contracts with its buyers.
However, as the LNG plants have high value, the inclusion of the plants as assets might have the undesirable effect of lowering the company's return on assets (ROA) ratio, he added.
The government will have to form a separate company if the LNG plants are to be placed with BP Migas, as the regulating body is not entitled to run businesses.
Meanwhile, Purnomo reiterated that Pertamina and the finance ministry would conclude the calculation on the government's and Pertamina's debts to each other, specifically regarding parts of subsidies from the past two years, within a week.
Aside from the debts, in order to secure cash flow, the government and Pertamina will try a new scheme proposed by the state oil firm, where the government pays only Rp 1.2 trillion every month to Pertamina to secure fuel supply.
The government has to give Pertamina up to $1.1 billion every month to cover fuel imports, and the company has to return, among others, proceeds of domestic fuel sales as well as government's share of crude oil and LNG.
"The gap is about Rp 1.2 trillion, which will be paid on the 10th (of each month)," said Purnomo.
Based on oil prices throughout the first four months of the year, Pertamina and the government have set the oil price at $50 a barrel and an exchange rate of Rp 9,300 to the dollar for the rest of the year -- from which the Rp 1.2 trillion figure was set.