Pertamina aims to cut fuel distribution cost 27.6 percent in 2002: Report

Indonesia state-owned oil and gas company Pertamina aims to reduce its fuel distribution cost in 2002 by 27.6 percent on increased pipeline delivery, a spokesman said Tuesday.

The spokesman told Dow Jones Newswires the company is targeting to reduce fuel distribution cost to US$3.33 a kiloliter in 2002 from US$4.60/kiloliter in 2001.

Stabilized operations at the 125,000 barrel-per-day Balongan refinery will ensure increased optimization of a pipeline linking the refinery at Cirebon, West Java to Jakarta, he said.

Lower operation costs will partly help to increase Pertamina's profits this year, he said.

Pertamina's gross profit this year is expected at 11.9 trillion rupiah (US$1=Rp10,390), marginally up from an unaudited Rp11.75 trillion recorded in 2001 gross profit, the company's spokesman said. Pertamina's gross profit last year exceeded its target of IDR9 trillion, he said.

In 2002, Pertamina will maintain its liquefied natural gas sales target of 27 million metric tons, unchanged from 2001's target. Actual sales in 2001 fell short of the target and reached only 24.06 million tons, he said.

An extended shut-in of ExxonMobil Indonesia Inc.'s natural gas production facility at Aceh resulted in lower LNG output, and thus lower exports from Indonesia in 2001, the spokesman said.

ExxonMobil Indonesia is a unit of Exxon Mobil Corp. (XOM).

Pertamina's crude production also fell in 2001 to 16.1 million barrels, down from 16.4 million barrels in 2000, the spokesman said.

In oil and gas exploration activities, Pertamina discovered 900 billion cubic feet of natural gas - mostly from the Donggi fields in central Sulawesi - and 49 million barrels of oil reserves, he said.

Pertamina hopes to maintain its cost of exploration below US$0.20 a barrel of oil equivalent in 2002. Upstream exploration cost in 2001 was at US$0.18/bbl, up from $0.14/bbl in 2000, the Pertamina spokesman said. (*)