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tate-run oil and gas giant PT Pertamina saved US$170 million during the first five months of this year from closing Singapore-based subsidiary Pertamina Energy Trading Ltd. (Petral) and other austerity measures, according to an executive.

Pertamina president director Dwi Soetjipto said on Thursday that the oil and gas company had significantly reduced fuel procurement costs following the termination of Petral'€™s operations. '€œWe'€™ve gained $36.6 million in efficiency savings from Petral'€™s shut-down alone,'€ he said during a hearing with the House of Representatives'€™ Commission VI overseeing state-owned enterprises.

Pertamina also saved money from the use of the integrated supply chain (ISC) in the procurement of crude oil following the closure of Petral, which previously handled all fuel procurement processes.

'€œWe haven'€™t used letters of credit since Petral'€™s operational shut-down,'€ Dwi said.

In January, Pertamina ceased operations of its Singapore-based procurement arm Pertamina Energy Trading Ltd. (Petral), aiming to remove an unnecessary link in the supply chain.

Petral was initially established in 1976 and incorporated in Singapore. The firm had two subsidiaries, namely Pertamina Energy Services Pte. Ltd. (PES) '€” incorporated in Singapore in 1992 '€” and Zambesi Investment Limited (ZIL) '€” established in Hong Kong in 1979.

Petral previously functioned as a broker for Pertamina'€™s oil export and import activities. However, the firm'€™s image became tainted by allegations of corrupt and illicit practices.

Pertamina, supported by the State-Owned Enterprises Ministry '€” the major shareholder '€” and the Energy and Mineral Resources Ministry, aims to complete liquidation of Petral and Petral'€™s subsidiaries by April next year.

The efficiency measures, Dwi said, had helped Pertamina book a net profit in the January-May period amid pressure from inventory costs and an oil price slump in the January-February period.

The firm suffered losses of $107 million and $105 million in January and February, respectively, but earned a net profit of $240 million in March.

Besides the austerity measures, Pertamina also plans to acquire a stake in industrial solutions firm PT Rekayasa Industri (Rekind), a subsidiary of state-owned fertilizer firm PT Pupuk Indonesia.

Dwi said that the acquisition would boost synergy among state enterprises and help Pertamina carry out its business by utilizing more locally-made technology.

However, he said, there was no deadline for the acquisition, adding that Pertamina would perform thorough analysis and due diligence first.

Pertamina, which is set to operate the Mahakam block in 2018, is aiming for net profits of $1.73 billion this year.

The company has booked total proven reserves of 38 million barrels of oil equivalent as of April this year and is looking to net proven reserves of up to 90 million barrels by year-end.