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Jakarta Post

Pertamina allocates US$5.5bn for capex in 2019

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Wed, November 28, 2018   /   04:45 pm
Pertamina allocates US$5.5bn for capex in 2019 A worker rides through a state-owned energy company PT Pertamina refinery in Indramayu, West Java. (Antara/Rivan Awal Lingga)

State energy holding company Pertamina has allocated US$5.5 billion for its capital expenditure (capex) in 2019, 37.5 percent higher than this year’s capex of $4 billion.

Pertamina finance director Pahala N Mansury said on Wednesday the company needed to allocate more funding in 2019 because it would finance a number of projects including refineries.

“About 50 percent of the capex is allocated for upstream investment, 25 percent for downstream and the remainder is for developing logistic infrastructure,” he said on Wednesday.

Pertamina is currently in the process of upgrading its four refineries and constructing two new refineries in a bid to boost Indonesia’s refining capacity to 2.07 million barrels of oil per day (bopd) by 2025 from the current capacity of 1.05 million bopd.

The total investment for these projects is expected to reach around US$45 billion.

For the realization of the 2018 capex, Pahala said the company had spent some $3.5 billion, 87.5 percent of the full year target, as several projects were delayed.

When asked about the corporation’s financial condition, Pahala said the weakening trend of global oil prices was unlikely to affect Pertamina’s financial performance.

“It will affect our upstream revenue, but it will reduce the costs downstream. So the impact will balance,” he said.

The global oil price has plunged in recent weeks. The price of benchmark Brent crude, for example, dropped to $61.17 per barrel on Wednesday from around $70 per barrel in the middle of 2018. (bbn)