Moody's announces completion of a periodic review of ratings of Pertamina (Persero) (P.T.)

(Singapore, April 11, 2019) -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Pertamina (Persero) (P.T.) and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Key rating considerations are summarized below.

Pertamina (Persero) (P.T.)'s Baa2 rating reflects its baseline credit assessment (BCA) of baa3 and a one-notch of uplift from our expectation of very high likelihood of extraordinary support from the Government of Indonesia (Baa2 stable) and very high dependence between the two. Our support assessment is underpinned by Pertamina's strategic role in Indonesia's oil and gas sector.

The baa3 BCA reflects Pertamina's integrated oil and gas operations, with a leading position across the oil and gas value chain. The company has significant upstream production and reserves, operates all six domestic refineries and has substantially full control over the country's fuel marketing stations and gas pipelines.

At the same time, Pertamina's ratings are constrained by the regulatory environment in Indonesia which is subject to a degree of unpredictability, fuel subsidy burden which weakens its profitability and execution risk associated with its large investment plans.

This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.

The principal methodologies used for this review were Global Integrated Oil & Gas Industry published in October 2016 and Government-Related Issuers published in June 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies. (ends)