W

ith three new directors joining the board and exemption from the burden of paying dividends to the state, state-owned oil and gas company PT Pertamina expects to enjoy significant leeway for expansion plans next year.

Pertamina chief executive officer Dwi Soetjipto said on Monday that Pertamina would aim to boost its upstream business and make its downstream business more profitable.

'€œWe will fight to get oil and gas fields that are under soon-to-be expired contracts of work [COWs],'€ Dwi said after announcing the new members of the board of directors.

Pertamina, which aims to pocket US$3.4 billion in net profits this year, has appointed Rachmad Hardadi as processing director, Dwi Wahyu Daryoto as human resources director and Syamsu Alam as downstream director, to join its board of directors, making a total of seven people on the board.

State-Owned Enterprises (SOEs) Minister Rini Soemarno said the number of directors had been reduced to seven from nine under previous management as part of efforts to make the firm more effective and efficient.

The ministry has also decided to exclude the firm from paying dividends to the government next year or even to provide state capital injection should it be necessary to help the firm expand its business.

Pertamina contributed around Rp 78.2 trillion ($769.32 million) to the state'€™s income last year, comprising Rp 9.5 trillion in the form of dividends and Rp 68.7 trillion in the form of taxes. The total paid dividends were equal to between 30 and 35 percent of the firm'€™s net profits.

Pertamina finance director Arief Budiman said that his firm would allocate around $5 billion for capital expenditure next year.

PT Pertamina EP, Pertamina'€™s subsidiary managing its upstream business, is planning to disburse around $3 billion to support its development project next year.

Pertamina EP president director Adriansyah said the total amount already covered the firm'€™s planned capital and operational expenditures. The amount, he added, was also similar to this year'€™s spending.

'€œWe are trying to press down our cost per well and targeting to execute more well drilling [next year]. Out of the total amount, a big chunk will be going to our projects in Matindok, Gundih and Donggi,'€ Adriansyah said.

Pertamina EP currently works on more than 113,000 square kilometers areas in the country. Among its projects are the Matindok gas development project in Central Sulawesi, the Donggi central processing plant, also in Sulawesi, and the Gundih gas field in Central Java.

Adriansyah added that as many as 160 wells would be drilled next year at a total estimated cost of $500 million.

'€œAs our current strategy, we will not disburse investment equally to our assets. Pertamina'€™s assets are too many and we need to focus on certain assets amid declining oil prices,'€ Adriansyah said, pointing at the firm'€™s development in the Sanga-Sanga and Bunyu fields.

In relation to the Gudih gas field, Adriansyah said the firm expected the field to supply 50 million standard cubic feet per day (mmscfd) to state-owned electricity firm PT PLN'€™s power plant in Tambak Lorok. The field currently provides around 30 mmscfd and work is ongoing to settle an issue with its sulfur recovery unit so that the field will run at full capacity.

In another development regarding Pertamina'€™s plans to acquire the Cepu block in Central Java in a bid to lift its production, Dwi said his company was negotiating with American oil and gas giant Chevron.

Chevron has been confirmed to operate the Mahakam block by 2017, which is an oil and gas block currently operated by French oil and gas giant Total E&P Indonesie.

Pertamina chief executive officer Dwi Soetjipto said on Monday that Pertamina would aim to boost its upstream business and make its downstream business more profitable.

'€œWe will fight to get oil and gas fields that are under soon-to-be expired contracts of work [COWs],'€ Dwi said after announcing the new members of the board of directors.

Pertamina, which aims to pocket US$3.4 billion in net profits this year, has appointed Rachmad Hardadi as processing director, Dwi Wahyu Daryoto as human resources director and Syamsu Alam as downstream director, to join its board of directors, making a total of seven people on the board.

State-Owned Enterprises (SOEs) Minister Rini Soemarno said the number of directors had been reduced to seven from nine under previous management as part of efforts to make the firm more effective and efficient.

The ministry has also decided to exclude the firm from paying dividends to the government next year or even to provide state capital injection should it be necessary to help the firm expand its business.

Pertamina contributed around Rp 78.2 trillion ($769.32 million) to the state'€™s income last year, comprising Rp 9.5 trillion in the form of dividends and Rp 68.7 trillion in the form of taxes. The total paid dividends were equal to between 30 and 35 percent of the firm'€™s net profits.

Pertamina finance director Arief Budiman said that his firm would allocate around $5 billion for capital expenditure next year.

PT Pertamina EP, Pertamina'€™s subsidiary managing its upstream business, is planning to disburse around $3 billion to support its development project next year.

Pertamina EP president director Adriansyah said the total amount already covered the firm'€™s planned capital and operational expenditures. The amount, he added, was also similar to this year'€™s spending.

'€œWe are trying to press down our cost per well and targeting to execute more well drilling [next year]. Out of the total amount, a big chunk will be going to our projects in Matindok, Gundih and Donggi,'€ Adriansyah said.

Pertamina EP currently works on more than 113,000 square kilometers areas in the country. Among its projects are the Matindok gas development project in Central Sulawesi, the Donggi central processing plant, also in Sulawesi, and the Gundih gas field in Central Java.

Adriansyah added that as many as 160 wells would be drilled next year at a total estimated cost of $500 million.

'€œAs our current strategy, we will not disburse investment equally to our assets. Pertamina'€™s assets are too many and we need to focus on certain assets amid declining oil prices,'€ Adriansyah said, pointing at the firm'€™s development in the Sanga-Sanga and Bunyu fields.

In relation to the Gudih gas field, Adriansyah said the firm expected the field to supply 50 million standard cubic feet per day (mmscfd) to state-owned electricity firm PT PLN'€™s power plant in Tambak Lorok. The field currently provides around 30 mmscfd and work is ongoing to settle an issue with its sulfur recovery unit so that the field will run at full capacity.