Pertamina claims $60m saved annually in efficiency program
JAKARTA (JP): State oil and gas company Pertamina has estimated that it could save more than US$60 million in costs every year through its efficiency programs.
The data, which was made available to The Jakarta Post on Thursday, says the sharp cost reductions would be possible due to factors such as the recent closure of the company's marketing offices abroad and the recent termination of the brokerage services for its fuel and crude oil imports.
The implementation of the efficiency programs at its refinery in Balikpapan, East Kalimantan, and its oil fields in Prabumulih, South Sumatra, are also contributing to the savings, the data says.
Pertamina closed its marketing offices in Houston, London and Singapore and reduced the number of its marketing staff in Tokyo several months ago. This will save Pertamina US$7.8 million per year.
Pertamina started to directly import fuel and crude oil in July after unilaterally terminating its decade-long brokerage contracts with Perta Oil Marketing Ltd. and Permindo Trading Co. Ltd, controlled by former president Soeharto's family and cronies.
The company will save $29.45 million per year as a result of the action.
It has already saved $26 million annually as a result of the implementation of efficiency programs at the Balikpapan refinery, and another $10.8 million per year due to the efficiency program at the Prabumulih oil field.
The Prabumulih oil field and Balikpapan refinery are among the three business units which Pertamina is using as pilot projects for its five-year restructuring program which started in 1996.
Cost
The data says Pertamina's crude oil production costs are likely to fall to $3.34 per barrel in the current fiscal year from $5.05 per barrel in the previous fiscal year, as a result of the company's restructuring programs.
According to the data, Pertamina had the fifth lowest oil production costs among the country's oil companies in the previous fiscal year.
The four companies with lower costs per barrel were PT Talisman, which mainly operates in Ogan Komering in South Sumatra ($2.24); PT Mobil Oil EP, whose main interests are in Aceh, ($2.95); PT Conoco, with major operations in the Natuna Sea ($3.73); and PT Caltex Pacific Indonesia, which has operations across the country ($4.48).
Pertamina estimates its cost of natural gas production are also likely to drop, to 32 cents per thousand cubic feet this fiscal year from 37 cents in the previous fiscal year, due to successful restructuring programs. (jsk)