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

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)