Below is a list with tagged columns and company profiles.
Latest Reports Pertamina
On Monday (06/08) Indonesia Investments released the July 2018 edition of its monthly research report. The report aims to inform the reader of the key political, economic and social developments that occurred in Indonesia in the month of July 2018 and also touches upon key international developments that impacted on the Indonesian economy.
The government of Indonesia is now one step further in turning fully state-owned energy company Pertamina into an oil & gas holding firm. Indonesian President Joko Widodo signed Government Regulation No. 6/2018 on the Formation of a State-Owned Oil & Gas Holding Firm thus formalizing the government's decision to move its 57 percent stake (Series B shares) in gas distributor Perusahaan Gas Negara to Pertamina.
Net profit of Indonesia's fully state-owned oil & gas company Pertamina is estimated to have declined to around IDR 27 trillion (approx. USD $2.0 billion) in full-year 2017, down about 35 percent (y/y) from USD $3.1 billion in the preceding year. The decline is attributed to rising crude oil prices and the government's refusal to adjust subsidized fuel prices.
Indonesian manufacturers of four-wheeled motorized vehicles need to adjust to the Euro-4 emission standard. In March 2017 the Indonesian government ordered this through the issuance of Environment and Forestry Ministry Regulation No. P. 20/MENLHK/SETJEN/KUM. 1/3/2017 on the Standard Exhaust Emission of Euro 4-Type Motor Vehicles. These European emission standards define the acceptable limits for exhaust emissions of new vehicles.
The government of Indonesia appointed state-owned energy company Pertamina to operate eight oil & gas blocks after contracts with existing operators expire in 2018. Indonesia's new gross profit sharing scheme, which replaced the nation's cost recovery scheme, will be applied to the new contracts in 2018. Under the gross profit sharing scheme the Indonesian government and contractors agree up front on the proportion for splitting gross profit from oil and gas exploration (implying that all exploration and production costs are now borne by the operator).
Total E&P Indonesia, subsidiary of oil & gas giant Total S.A., expects gas production at the Mahakam block (located offshore in East Kalimantan) to decline about 12.8 percent (y/y) in 2017 to 1,430 million standard cubic feet per day (mmscfd) from an estimated 1,640 mmscfd in 2016. Arividia Noviyanto, Vice President Human Resources, Communication, and General Services at Total E&P, informed that the decline in gas production is partly explained by better-than-expected output at the Mahakam block in 2016.
The Indonesian government now allows private investors to develop oil refineries in Indonesia, effectively ending state-owned energy Pertamina's (virtual) monopoly. Before this new regulation, private companies had to cooperate with Pertamina to build oil refineries in Southeast Asia's largest economy. The new policy is an effort to boost domestic oil refinery capacity in Indonesia (hence limiting the need for refined fuel imports) and improve the investment climate by opening this industry to the private sector. This sector can also apply for tax incentives.
In order to realize Indonesian President Joko Widodo's recently announced "One Fuel Price policy", state-owned oil and gas company Pertamina will need to invest about IDR 380 billion (approx. USD $29 million) in additional infrastructure. Last week Widodo announced, when visiting Papua in the far east of Indonesia, that fuel prices are to become the same across the entire archipelago. Due to weak infrastructure and poor distribution channels, prices of gasoline and diesel are about ten times as expensive in Papua compared to Java.
Indonesia's fully state-owned energy company Pertamina saw its net profit grow by a whopping 221 percent (y/y) to USD $1.83 billion in the first half of 2016. This remarkable performance is attributed to the company's enhanced operational performance and efficiency in the upstream and downstream segments. Dwi Soetjipto, General Director of Pertamina, that despite the oil and gas industry being plagued by major challenges, Pertamina managed to take its responsibility in terms of the energy supply, being the nation's foremost local energy supplier.
Crude oil prices are rebounding, climbing nearly 90 percent from 13-year lows at the start of 2016. However, compared to two years ago crude prices are still down 50 percent hence corporate earnings in the oil and gas industry remain subdued, while few investors are enticed to engage in exploration. To deal with low oil prices, oil and gas companies need to become more efficient thus pushing down production costs in order to optimize earnings. Lets take a look at Pertamina, Indonesia's state-owned energy company. How much does it cost for Pertamina to produce one barrel of oil?
Latest Columns Pertamina
This year, Indonesia will have to face declining production numbers in its oil and gas sector. Gas output is assumed to decline by 14.77 percent compared to last year, while oil output will reach similar levels as in 2012, provided that there are no disruptions due to bad weather and leakages (a prerequisite that will be hard to meet).
