Govt agrees on 50-percent of Pertamina?s net profits for 2002 budget

The government has agreed that state oil and gas company Pertamina submit 50 percent of its net profits for the 2002 state budget, compared with the 25 percent previously proposed to the House of Representatives (DPR), according to Minister of Finance Boediono.

?We have reported to the President about the consultations between us. We could see her wisdom that the condition in 2002 would still be difficult for the people. She agreed on the proposal that 50 percent dividend of Pertamina be submitted for the State Budget,? Boedino said in a hearing with the House?s state budget committee on Wednesday.

Committee members applauded when the minister made the remarks.

With the agreement, Pertamina?s dividend for the 2002 state budget will amount to Rp 2.3 trillion. In the past year, Pertamina submitted to the government only 10 percent of its net profits.

Debates at the committee on the portion of Pertamina?s profits to be earmarked for next year?s state budget had taken place for quite sometime with the government sticking to its stance that it would demand only 10 percent of the firm?s net profits. Later, it changed its stance by proposing that the portion be increased to 25 percent, which the house committee viewed as still too small as other state enterprises were required to pay to the government between 45 percent and 50 percent of their net profits.

Minister of Energy and Mineral Resources said in the past that the crude oil output target of 1.32 billion barrels for 2002 budget year had to be revised down if the government had to take 50 percent of net profits booked by Pertamina. With lower production volumes, Pertamina would clearly be unable to continue its ongoing exploration programs, Purnomo argued.

In today?s hearing with the house budget committee, Boediono quoted President Megawati Sukarnoputri as saying that Pertamina needed to remain a major contributor to state revenues despite the agreement on the 50-percent contribution to next year?s state budget.

Pertamina forecast a net profit of Rp 4.6 trillion (US$459.4 million) for next year. Last year it recorded Rp 4.98 trillion in net profits. (godang)