Pertamina raise investment, aims higher profit
Fitri Wulandari, The Jakarta Post, Jakarta
State oil and gas company PT Pertamina is planning to increase its investment for exploration and production next year, which will be the company's first full year of operation as a limited liability company.
The company also revealed a number of major projects next year, including the first offshore drilling in the South Sulawesi sea.
Pertamina's upstream director Bambang Nugroho said the company would increase investment for upstream activities to Rp 5.9 trillion (US$698 million) in 2004 from Rp 4.6 trillion.
However, Bambang said, the company would only spend seven percent on exploration with the remaining 93 percent on other upstream activities, including oil and gas production.
With increased investment, Pertamina is aiming for higher production and profit. The company officially became a limited liability company in September 2003.
Next year, the company plans to produce an average of 141,000 barrels of oil per day (bpd), compared with an average of 119,000 bpd in the first eleven months of this year. Natural gas production will be up from 914 million standard cubic feet per day (MMSCFD) to 1,109 MMSCFD.
This year, the company's total production of oil, natural gas and geothermal steam stands at 285,000 barrels of oil equivalent per day (BOEPD). It was up 5 percent from 270,000 BOEPD last year.
The figures include Pertamina's own production and the company's partners.
"The increase in oil production will come from optimizing existing production, developing potential findings in South Sumatra and West Java as well as optimizing the activities of our partner," Bambang said at a media conference on Thursday.
The company expects an increase in profit next year along with an increase in production. In 2004, the company will see its profit before government's share increase from Rp 8.6 trillion this year to Rp 9.1 trillion.
Of the figure, the government would get the lion's share of 80 percent, with the remaining 20 percent going to the company.
As a limited company, the company now has to compete with other oil and gas companies without certain privileges or special treatment provided by the government in the past.
Pertamina controlled for decades exploration, production, processing, distribution and retailing in the oil and gas sector.
The company has also revealed a number of projects inside and outside the country to boost its production.
The company plans to acquire 4.28 percent of working interest in Jabung block, South Sumatra, from Petronas and Petrochina. Bambang said Pertamina was currently negotiating terms and conditions for heads of agreement.
For natural gas, Pertamina is planning to supply 15 MMSCFD of natural gas for the Keramasan power plant in Palembang, South Sumatra, which is owned by state power firm PT PLN.
Pertamina has completed the drilling of five natural gas wells in South Sumatra this year, which are expected to produce 150 MMSCFD of gas, beginning May 2006.
This year, the company also found natural gas reserves amounting to 620 billion cubic feet (BCF) in Randublatung-1A exploration well in Central Java. The gas will be allocated to supply Tambaklorok power plant in Semarang, Central Java, owned by PLN.
In the Donggi block, Southeast Sulawesi, Pertamina found proven reserves of 2.5 trillion cubic feet (TCF) after drilling five exploratory wells.
"Exploration activities are being accelerated to find proven gas reserves of 8 TCF," Bambang said, adding that two onshore and five offshore exploration wells had been planned in the block next year.
Internationally, pertamina will work together with Petronas Carigali and PetroVietnam PSC Supervising Company to operate SK- 305 Block in Malaysia. The company has also formed a Joint Operating Company with PIDC (Vietnam) and Petronas Carigali to operate Block 10 and 11-1 in Vietnam.
In addition, Bambang said, the firm's oil and gas exploration in Block-III Western Desert in Iraq still continues.
Bambang said that as of November 2003, the company had total oil reserves of 424 million barrels and a natural gas reserve of 3.3 TCF, including a proven reserve of 1.2 TCF.