Revenues from PSC operations set to drop

JAKARTA (JP): Combined gross revenues from state oil and gas company Pertamina's production sharing contractors (PSC) are likely to drop to US$11.6 billion this year from $14.6 billion last year due to a drastic fall in oil prices, Pertamina said.

Pertamina's foreign contracts division head, Gatot K. Wiroyudo, said Tuesday that Pertamina had initially estimated that its PSCs would generate $14.18 billion in gross revenue this year.

The projection was based on an estimated output of 543 million barrels of annual crude oil and condensate and an annual output of 1.86 trillion cubic feet (TCF) of natural gas.

It assumed that crude oil and gas prices would average $17.19 per barrel and $2.57 per barrel oil equivalent (BOE) respectively this year, Gatot said.

But crude oil prices have been decreasing since early this year due to an oversupply on the world market. The Organization of Petroleum Exporting Countries' (OPEC) prices hit a level of $11 per barrel last month.

Gatot said the reduced target of $11.5 billion in gross revenue from PSCs this year was based on revised assumptions that crude oil and gas prices would average $14 per barrel and $2.12 per BOE respectively this year.

There are currently 155 PSCs active in the oil and gas sector here.

Gatot said the PSCs contributed 95 percent of the country's oil and condensate output of about 1.5 million barrels per day.

The PSCs generated a combined gross revenue of $14.6 billion last year with a total output of 526 million barrels of petroleum and condensate and 1.7 TCF of natural gas.

Oil and gas prices respectively averaged $17.36 per barrel and $2.87 per BOE that year.

In 1996, when crude oil jumped to $20.15 per barrel and gas prices to $3.04 per BOE, Indonesia's PSCs yielded a combined gross revenue of $15.8 billion with a total output of 532 million barrels of crude oil and condensate and $1.6 TCF of natural gas.

Under its PSC contracts, the government takes between 75 percent and 90 percent of net revenues (gross revenue minus costs), leaving the remainder to the contractors.

Last year, the government raked in about $9 billion from its PSC contracts, including taxes, down from $10 billion in 1996.

Gatot said the government initially expected to collect $8.2 billion from the PSCs this year, but under its revised projections its revenue would likely total $5.9 billion.

Gatot said the PSCs currently employed 21,250 people, including 800 expatriates.

PSCs employed 22,161 people in 1997, including 786 expatriates. In 1996, expatriates numbered 828 out of a total of 22,732 PSC employees. (jsk)