Pertamina revises up this year's profit target

Sat, 09/20/2008 11:38 AM  |  Business

State oil and gas company PT Pertamina expects its net profits this year to reach Rp 27.6 trillion (US$2.98 billion), higher than initial estimates, an executive says.

Finance director Frederick Siahaan said Friday the company had earlier projected profits to hit Rp 25.4 trillion, but is now revising its projection upward by 8 percent, mostly due to higher average oil prices and efficiency.

The new target will mark a 12.6 percent increase over last year, when the company booked a net profit of Rp 24.5 trillion -- the highest profit ever generated by an Indonesian entity.

"But it will depend on oil prices, should the price continue to fall, then the realization could be lower," Frederick added.

The net target is based on an average oil price of $100 a barrel. The price of oil has been down 54 percent from its peak of $147 a barrel, in July this year.

Bloomberg reported Friday oil prices for October delivery rose 1.4 percent to $99.27 a barrel.

Despite raising this year's net profit projection, the government expects lower dividends from Pertamina due to a continued decline in oil prices.

The government, which wholly owns Pertamina, is likely to receive Rp 12 trillion with this year's dividend, instead of the Rp 18 trillion initially targeted, according to Said Didu -- a deputy to the State Minister for State Enterprises.

"There will no longer be a windfall profit. It will be removed (from the calculation), and there will be a reduction (from the earlier target)," Said added.

Last year, the company paid out Rp 11 trillion in dividends to the government.

Pertamina is hoping to boost crude oil output by 14 percent to 159,000 barrels this year, with subsidiary PT Pertamina EP and its partners expected to contribute 125,000 barrels and 34,000 barrels, respectively.

Meanwhile, State Minister for State Enterprises Sofyan A. Djalil said Pertamina president commissioner Endriartono had tendered his resignation letter to the ministry's office.

Endriartono was appointed commissioner in 2006.

"We have received the letter. His position will be temporarily filled by Umar Said (a member of the commissioners board)," Sofyan said. -- JP/Ika Krismantari

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