Pertamina's profits hit Rp 5 trillion in 1999/2000

JAKARTA (JP): Strong world crude oil prices boosted consolidated net profits of state oil and gas company Pertamina to Rp 4.98 trillion (US$556 million) in its 1999/2000 fiscal year ending March 31, from Rp 1.05 trillion in the previous year, Pertamina said Tuesday.

The state company also said its gross profit quadrupled to Rp 12.28 trillion during the period, of which however 60 percent or Rp 7.3 trillion had been paid to the government.

"The year's gross profit is due to high world crude oil prices and in addition to no recorded foreign exchange losses, which last year totaled Rp 8 trillion," Pertamina's spokesman Ramli Djaafar said.

Pertamina, on behalf of the government, manages the country's oil and gas contractors, who under production sharing contracts are obliged to deliver 85 percent of their oil output to the government via Pertamina.

The proceeds from the sale of the government's 85 percent oil share is delivered by Pertamina to the Ministry of Finance and Pertamina receives a management fee from the government for the service.

Aside from the management fee, Pertamina also makes money by producing oil and gas at its own oil and gas fields. It also has subsidiaries, which are sometimes profitable.

Pertamina reported that domestic revenue in its 1999/2000 fiscal year rose to Rp 81.87 trillion from Rp 65.36 trillion in the previous year, while exports rose to Rp 53.78 trillion from Rp 42.53 trillion.

Pertamina's consolidated financial reports, which were audited by the State Financial Comptroller (BPKP), included those of its eight subsidiaries.

BPKP deputy of oil and gas supervision Atjeng Sastrawidjaja said his office gave Pertamina's report an unqualified opinion, meaning that no deviations from accounting standards were found in the report.

He said that BPKP found irregularities worth Rp 753 billion in the balance sheet, but he dismissed the amount as insignificant.

"The total amount (of Rp 753 billion) makes up only 0.93 percent of Pertamina's total assets (of Rp 84 trillion)," he said in his speech during the presentation of the financial report.

Pertamina's eight subsidiaries contributed total losses of Rp 77 billion to the consolidated report.

"Actually, four out of eight companies booked profits, but the profits were not enough to offset losses suffered by one subsidiary, which is PT Elnusa," Atjeng said without providing any details.

Pertamina's subsidiaries are among others publicly listed PT Elnusa (electronics), PT Patra Jasa (hotels and restaurants), PT Pelita Air Services (air transportation), PT Patra Dok Dumai (shipping docks), PT Tugu Pratama (oil and gas insurance) and PT Pertamina Tongkang (small vessels provider).

Pertamina recorded a net profit of Rp 5 trillion for the operations of its own oil and gas fields in 1999/2000, as against Rp 821 billion the previous year.

President of Pertamina Baihaki Hakim said that the poor performance of some of the subsidiaries was due to the lingering effects of the economic crisis.

He expected that the ongoing restructuring process in Pertamina's subsidiaries would led them to better performance.

"Like it or not, our subsidiaries must work harder so that their contribution is significant to Pertamina," Baihaki said.

But he expressed confidence that Pertamina's overall performance would continue to improve, assuming crude oil prices would remain favorable.

Atjeng further reported that fuel subsidies in the 1999/2000 year reached Rp 39.8 trillion from Rp 25.2 trillion in the previous year.

"The increase in fuel subsidy is caused by the higher crude oil prices, which makes up 80 percent of fuel costs, as well as the increase in the national fuel consumption," he said.

While higher crude oil prices have boosted the government revenue, it has also led to the rise in government spending for fuel subsidy.

Indonesia imports between 15 percent to 20 percent of the country's yearly fuel consumption of about 52 million kiloliters due to the limited capacity of Pertamina's refineries.

Pertamina also imports crude oil to meet the mechanical specifications of some of its refineries. (bkm)