Despite estimating to post a 22.45 percent jump in net profit in 2008, state oil and gas firm PT Pertamina remains cautious about its 2009 target, saying profitability will largely depend on the volatility of crude oil prices.
President director Ari H. Soemarno said the company expected to book a total net profit of around Rp 30 trillion (US$2.74 billion) by the end of 2008, up from Rp 24.5 trillion in 2007.
"As of the third quarter of 2008, we had booked an unaudited pre-tax profit of about Rp 40.30 trillion and a net profit of somewhere between Rp 26 trillion and Rp 27 trillion."
"Based on that, we estimate our full-year net profit will amount to around Rp 30 trillion," he said Wednesday.
About 70 percent of Pertamina's profit came from its upstream business, with the bulk of the money coming in the third quarter of the year after the global oil price smashed previous heights.
"Up until the third quarter of 2008, the average Indonesian Crude Price index (ICP) was still at US$112 a barrel," Ari said.
At present, oil prices are hovering between $35 and $40 a barrel.
Pertamina upstream director Karen Agustiawan said the company's oil sales during the third quarter of 2008 reached 35.97 million barrels, up from 34.22 million barrels in the same period in 2007.
Karen said Pertamina's oil production in 2008 might reach 156,000 barrels of oil per day, adding that the company was planning to increase production to 169,750 barrels per day next year.
Nevertheless, the company took a cautious approach to next year's forecasts.
Ari said Pertamina's profit this year was estimated to decline by 37 percent on optimism base, and 54 percent on pesimism base.
"With an ICP assumption at $80 a barrel and the rupiah at 9,400 per dollar, we estimate net profit to reach Rp 19 trillion. But, if the ICP reaches $50 and the rupiah 11,000, the estimate will be lowered to Rp 13.80 trillion," he said.
Ari said another factor that might damage the company's profit this year was the reduced payment the firm would receive from the government for distributing subsidized fuel.
Pertamina has a monopoly on the distribution of all subsidized fuel in the country.
Under existing regulations, the government reimburses Pertamina under the so-called Mean Oil Platts Singapore (MPOS) plus alpha formula.
The MOPS is the average monthly price of oil transactions in Singapore. Alpha is the margin of distribution and profit.
The House of Representatives and the government has set the alpha value in the 2009 state budget at 8 percent of the MOPS, compared to 9 percent last year.
Despite the gloomy outlook, Pertamina will move forward with its plan to spend Rp 19.4 trillion in investment this year, up from its investment target of Rp 17 trillion in 2008.
Of the total Rp 19.40 trillion investment, the firms will allocate Rp 11 trillion for its upstream business, Rp 2.30 trillion for processing, Rp 2.40 trillion for marketing and trading and Rp 3.7 trillion for investments currently being negotiated by the company and the government.
Of the Rp 17 trillion allocated for investment in 2008, only Rp 11 trillion was spent, Ari said. The unrealized projects will carry over to 2009, he added.
President director Ari H. Soemarno said the company expected to book a total net profit of around Rp 30 trillion (US$2.74 billion) by the end of 2008, up from Rp 24.5 trillion in 2007.
"As of the third quarter of 2008, we had booked an unaudited pre-tax profit of about Rp 40.30 trillion and a net profit of somewhere between Rp 26 trillion and Rp 27 trillion."
"Based on that, we estimate our full-year net profit will amount to around Rp 30 trillion," he said Wednesday.
About 70 percent of Pertamina's profit came from its upstream business, with the bulk of the money coming in the third quarter of the year after the global oil price smashed previous heights.
"Up until the third quarter of 2008, the average Indonesian Crude Price index (ICP) was still at US$112 a barrel," Ari said.
At present, oil prices are hovering between $35 and $40 a barrel.
Pertamina upstream director Karen Agustiawan said the company's oil sales during the third quarter of 2008 reached 35.97 million barrels, up from 34.22 million barrels in the same period in 2007.
Karen said Pertamina's oil production in 2008 might reach 156,000 barrels of oil per day, adding that the company was planning to increase production to 169,750 barrels per day next year.
Nevertheless, the company took a cautious approach to next year's forecasts.
Ari said Pertamina's profit this year was estimated to decline by 37 percent on optimism base, and 54 percent on pesimism base.
"With an ICP assumption at $80 a barrel and the rupiah at 9,400 per dollar, we estimate net profit to reach Rp 19 trillion. But, if the ICP reaches $50 and the rupiah 11,000, the estimate will be lowered to Rp 13.80 trillion," he said.
Ari said another factor that might damage the company's profit this year was the reduced payment the firm would receive from the government for distributing subsidized fuel.
Pertamina has a monopoly on the distribution of all subsidized fuel in the country.
Under existing regulations, the government reimburses Pertamina under the so-called Mean Oil Platts Singapore (MPOS) plus alpha formula.
The MOPS is the average monthly price of oil transactions in Singapore. Alpha is the margin of distribution and profit.
The House of Representatives and the government has set the alpha value in the 2009 state budget at 8 percent of the MOPS, compared to 9 percent last year.
Despite the gloomy outlook, Pertamina will move forward with its plan to spend Rp 19.4 trillion in investment this year, up from its investment target of Rp 17 trillion in 2008.
Of the total Rp 19.40 trillion investment, the firms will allocate Rp 11 trillion for its upstream business, Rp 2.30 trillion for processing, Rp 2.40 trillion for marketing and trading and Rp 3.7 trillion for investments currently being negotiated by the company and the government.
Of the Rp 17 trillion allocated for investment in 2008, only Rp 11 trillion was spent, Ari said. The unrealized projects will carry over to 2009, he added.
Source:Alfian , The Jakarta Post , Jakarta | Fri, 01/02/2009 10:30 AM | Business
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