Moody's announces completion of a periodic review of ratings of Saka Energi Indonesia (P.T.)

(Singapore, January 15, 2021) -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Saka Energi Indonesia (P.T.) and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on 12 January 2021 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.

Saka Energi Indonesia (P.T.)'s B2 corporate family rating reflects its weak financial and operating profile; its small scale and need to invest to improve its operating profile; its long-term contracts with quality counterparties that are fixed price in nature; and its exposure to high geographic concentration risk as its production and reserves are primarily in Indonesia.

Saka's B2 rating incorporates one notch of uplift from parental support, which takes into account (1) the cross-default clauses between Saka and PGN; and (2) the reputational and funding risks to PGN and its ultimate shareholder, Pertamina (Persero) (P.T.) (Baa2), should Saka default. PGN holds 100% stake in Saka, while PGN is in turn 56.96% owned by Pertamina, the 100% state-owned national oil company in Indonesia.

The rating was placed under review for possible downgrade on 6 January 2021; for details see Moody's press release issued on that date.

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 methodology used for this review was Independent Exploration and Production Industry published in May 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

This announcement applies only to EU rated, UK rated, EU endorsed and UK endorsed ratings. Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.

This publication does not announce a credit rating action. 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. (ends)