Pertamina lacks funds to pay for LNG, official says

Pertamina lacks funds to pay for LNG, official says

Bloomberg Jakarta

State oil and gas company PT Pertamina, the world's largest exporter of liquefied natural gas, has insufficient money to pay for purchases of the fuel, a company official says.

Pertamina would ask the government to make payments to sellers, the company's director of marketing and trading Ari Soemarno said on Friday.

"Looking at our cash flow right now, we cannot pay for the cargoes," he said.

Pertamina is buying LNG to meet contractual deliveries after a drop in production in Nanggroe Aceh Darussalam. Pertamina operates Indonesia's LNG plants and has been asking buyers in Northeast Asia to accept delays in shipments of nine cargoes as the government wants to divert some natural gas from one of its two LNG plants to fertilizer makers.

Indonesia needed to pay this week for the purchase of one LNG cargo for April delivery from the Middle East, Soemarno said, without giving the price or the identifying the seller.

The government might cut the income tax imposed on Pertamina to 35 percent from 60 percent to help the company compete with international rivals such as Royal Dutch/Shell Group, Bisnis Indonesia newspaper reported on March 29, citing Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

Pertamina's profit may have risen to Rp 7.3 trillion (US$769 million) in 2004 after the company pumped 138,000 barrels of oil a day, President Director Widya Purnama said earlier this year.

The company posted net income of Rp 3.9 trillion in 2003 and targeted net income of Rp 4.38 trillion for 2004.