State oil firm lowers net profit target

State-Owned Enterprises Minister Mustafa Abubakar said Thursday the Rp 25 trillion net profit target by the end of the year was no longer feasible and that an adjustment was needed.

“We expect the profit to be more than Rp 20 trillion,” Mustafa said, adding that Pertamina was overly pessimistic about its performance.

Pertamina spokesman Muhammad Harun told The Jakarta Post the company expected Rp 14 trillion in profit this year, lower than the Rp 17 trillion it made last year.

In the first half of this year, Pertamina booked Rp 8.7 trillion in net profit, up from Rp 7.2 trillion in the same period last year.
“The new target is lower than last year because we have to offset Rp 3.2 trillion for subsidies for 12-kilogram LPG canisters,” Harun said. The government had planned to allow Pertamina to raise the LPG price by Rp 1,000 per unit, but backed off due to public pressure.

Previously, upstream oil and gas regulator BPMigas reported Indonesia’s crude oil sales in the first half of the year fell short of targets due to bad weather and disruptions at Pertamina refineries.

Crude oil sales, also known as oil lifting, reached an average of 935,292 barrels of oil per day (bpd) while production for the six-month period stood at 959,823 bpd. The target for both categories in the 2010 state budget was set at 965,000 bpd.

BPMigas reported 122 cases of unplanned operation shutdowns in the first half of this year. The incidents have led to as much as 6,860 bpd in lost production. In 2009, there were 235 unplanned shutdowns, costing the country 21,150 bpd.

The Indonesian crude price (ICP), the benchmark for oil price used in the state budget, stood at US$73.75 per barrel for the whole first half, while the budget assumed $80 per barrel.

Nani Afrida
The Jakarta Post