Pertamina expects lower net profit this year
The Jakarta Post, Jakarta
State oil and gas company PT Pertamina said on Wednesday net profit this year was expected to decline to Rp 4.5 trillion (US532.54 million) from Rp 5.4 trillion last year.
Company president Ariffi Nawawi said that the lower profit was mainly linked to a loss in fees obtained from managing government oil and gas production-sharing contracts.
The company lost this mandate in August last year following the introduction of legislation that liberalized the country's oil and gas sector and put an end to Pertamina's decades-long monopoly.
BP Migas, the regulator of the oil and gas sector, now controls the mandate.
Arifi did not give a projection for next year.
However, company deputy finance director Andre Hidayat said that net profit next year was projected to increase to Rp 7.6 trillion due to lower income tax and revenue-sharing with the government, following the change in its status into a limited liability company in September.
He added that the company would restructure some of its subsidiaries, in which loss-making units would either be sold, merged or liquidated.
Elsewhere, Ariffi said that Pertamina planned to develop a number of "strategic projects" in 2004.
"The year 2004 will be Pertamina's initial period as a limited liability company, so we'll develop a number of projects, but the results of these will only be visible in three to four years," he said.
He added that Pertamina would seek strategic partners to develop the projects. He did not elaborate.
Meanwhile, Ariffi said that PT Tuban Petrochemical Industries would soon receive badly-needed financing from Japanese investors to resume development of the stalled petrochemical project in Tuban, East Java.
Pertamina has a 15 percent stake in the project.
Ariffi said that Japan's Sumitomo Mitsui Banking Corp. and Mitsui & Co. would provide some $400 million in loan.
Ariffi said that he would sign the loan agreement in Tokyo on Thursday.
The petrochemical project was halted in 1998 following the regional economic crisis.
The plant has an installed production capacity of 500,000 tons of paraxylene per year, plus 100,000 tons of orthoxylene and toluene per year.