The Jakarta Post
State-owned oil and gas giant Pertamina has allocated at least US$5 billion in capital expenditure in 2017 to fund its ambitious refinery development plans.
Pertamina plans to upgrade four of its refineries and build two new ones to boost its refined oil production capacity to 2.6 million barrels of oil per day (bopd) by 2030 from only around 830,000 bopd at present.
This year alone, Pertamina plans to start the Balikpapan refinery upgrade project in East Kalimantan in the first quarter, while the groundbreaking ceremony for Cilacap refinery upgrade project in Central Java and the new Tuban refinery project in East Java are slated for the third quarter.
“As several of the refinery projects are set to start this year, we have allocated $5-$6 billion in capital expenditure,” Pertamina finance director Arief Budiman said in Jakarta on Thursday.
(Read also: Elia Massa Manik appointed Pertamina chief)
Therefore, Arief said the company was considering several financing options to help fund its operations this year amid various efforts to tighten its belt.
“We need to maintain our efficiency measures to boost our performance,” Arief said.
Through the efficiency measures, Pertamina was able to save $2.67 billion in 2016. As a result, the company’s net profit surged 121.8 percent annually to $3.15 billion in 2016, even though its revenue plunged 12.6 percent to $36.5 billion.
This year, it aims to save at least $1 billion from such measures. (bbn)