RI to get windfall profit from oil exports

JAKARTA (JP): Indonesia expects to windfall profit from oil and gas exports this fiscal year due to a sharp increase in oil prices.

Pertamina president Martiono Hadianto said on Monday that receipts from oil and gas exports could reach Rp 44 trillion (about US$6.7 billion) during the fiscal year ending in March 2000.

Martiono's forecast is double the Rp 22 trillion projected for the 1999/2000 fiscal year.

"Oil and gas revenue (in the state budget) was calculated on the crude oil price of US$10.50 per barrel at an exchange rate of Rp 7,500," Martiono told reporters following a meeting with President Abdurrahman Wahid.

"But since April the average price of crude oil has reached between $19 and $20 per barrel, he said.

This condition, he added, enabled the company to perform relatively well during the economic crisis compared to other local companies.

During the 1998/1999 fiscal year, Pertamina failed to meet the projected Rp 49.7 trillion in oil and gas revenue due to unfavorable oil prices in the international market.

Revenue from oil and gas exports last year only reached Rp 40.3 trillion, or 81.9 percent of the calculated figure.

Martiono said investment in the oil sector during 1998 reached $5 billion despite the low oil prices. He expected more investment this year.

"Along with the increase in oil prices, investment will become more attractive," Martiono said about the prospects of investment in the oil sector this fiscal year.

Regarding the plan to abolish fuel subsidies, Martiono advised the government to first disseminate information about its plan before reaching a decision.

"It's important so that people understand what the government is up to," he explained.

The government in 1998 agreed to reduce its fuel subsidies as part of the reform measures agreed upon with the International Monetary Fund (IMF).

However, no cuts in fuel subsidies have been implemented so far.

"Pertamina is currently studying this issue, mostly on how to reduce fuel subsidies," Martiono said.

Martiono also disclosed that Pertamina had received a full report of Price WaterhouseCoopers' (PwC) audit on the company.

"Pertamina is now studying the report and will follow up on it. So we won't just review it," he said.

The independent auditor said inefficiency, loss of income opportunities and future obligations to have caused Pertamina to lose $4.69 billion during April 1996 to March 1998.

Asked whether the President had commented on the audit, Martiono said he had not reported the audit results to the President.

The government appointed PwC last year to audit Pertamina's financial performance.

The appointment was also part of the economic reform measures agreed upon with the IMF. (03/prb)