Pertamina EP cuts Capex and Opex amid price drop

By Bernard Loebs

PT Pertamina EP (PEP), an upstream unit of state owned oil and gas firm PT Pertamina, has proposed to cut its operating expenditure (Opex) and capital expenditure (Capex) to cope with the oil price drop.

PEP?s President Director Adriansyah told Petromindo.com on Wednesday that the proposal on budget cuts has been submitted to upstream authority SKK Migas. The latter however has yet to approve it.

SKK Migas has allowed all oil and gas contractors to review their Work Program & Budget (WP&B) in response to the oil price drop.

Andriansyah said in its revised WP&B submited to SKK Migas, PEP proposed to cut its lifting target to 109,000 bopd from the intital plan of 128,000 bopd. It also proposed to cut its Capex to $850 million from the intial plan of $1.4 billion and its Opex $1.2 billion from the initial plan of $1.6 billion. It also proposed cuts in exploitation driling to 26 wells from 126 wells and exploration drilling to nine wells from 14 wells.

The good news is that the domestic price of gas is not affected by the oil price drop, Adriansyah said. As such, the firm will maximize production at its gas assets. The firm has set a gas lifting target at 1070 mmscfd for this year and will not postpone any of its gas projects, such as the Matindok and Donggi gas field projects in Central Sulawesi, the Pondok Makmur field project in Bekasi, West Java; the Paku Gajah field project in South Sulawesi and the PPGJ project in Gundih, Central Java.

?All the projects will be completed this year,? Andriynsah said.

Editing by Johannes Simbolon