Pertamina to concentrate on exploration
Pertamina to concentrate on exploration
Fitri Wulandari, The Jakarta Post, Jakarta
Oil and gas firm PT Pertamina said it would focus on
exploration and exploitation activities to boost oil and gas
reserves.
"Seventy percent of our activities will be focused on
exploration, mainly (for) oil. Pertamina is an oil company. So,
we have to explore for oil," Pertamina's finance director Alfred
S. Rohimone explained to members of the press on Wednesday.
The rest of their efforts will be focused on downstream
activities including fuel refining and distribution.
Alfred said the move aims to increase the company's oil output
which at present stood at 30,000 barrels per day (bpd).
Also, he said, it was in line with the change of Pertamina's
status into a limited liability company from a quasi profit-
making firm last month. The change was consistent with the
implementation of Oil and Gas Law No. 22/2001, which aims to
liberalize the sector and scrap the company's long-time monopoly.
Alfred explained that during exploration, Pertamina would
first search for oil, then gas and geothermal steam.
He said Pertamina was reviewing all projects planned by the
previous management to see whether to continue or scrap them. The
firm would only continue projects that promise quick yields.
Alfred is part of Pertamina's new management installed by the
government late last month to replace the old board led by
Baihaki Hakim. The current management is led by president Ariffi
Nawawi.
Alfred did not specify the total investment needed by
Pertamina to finance its planned upstream activities.
However, he said Pertamina has many options to seek financing
for its upstream activities.
Pertamina can raise funds to finance its exploration projects
through corporate borrowing, capital markets or by setting up
partnerships with other companies.
Pertamina has received many offers from various lenders,
including a loan offer amounting to US$250 million from the
Islamic Development Bank (IDB),
"Pertamina could also use its own cash to finance its
projects. We still have between Rp 7 trillion to Rp 8 trillion of
internal funds," he said.
Further, Alfred stressed Pertamina's new management had
decided to drop the previous management's plans to purchase 38
tankers. However, it would honor the contracts already signed by
the previous management for the purchase of six tankers.
He said Pertamina had hired an independent consultant to
examine whether it would be more economical to charter tankers or
own them.
"If it is cheaper to own tankers than we will purchase them.
But if it is cheaper to charter, then we'll do so," Alfred said.
According to Kompas daily, Pertamina now operates 130 tankers
but it only owns 31.
Following Pertamina's decision to drop plans to buy the 38
tankers, the firm has thus scrapped the bond issue plans by its
shipping unit, PT Pertamina Tongkang.
Tongkang is finalizing plans to issue rupiah and dollar
denominated bonds worth Rp 225 billion (US$26.5 million) and $90
million respectively in the local and international markets.
The unit planned to use the proceeds to purchase a number of
tankers.
Alfred said he had notified PT Bahana Securities and PT
Citigroup Securities, who were the underwriters for the issue,
about the cancellation.
"We also have notified the Capital Market Supervisory Agency
(Bapepam) about the cancellation," Alfred said.