Pertamina expect to invest $18 billion in 5 years

State oil and gas company PT. Pertamina will require huge investment of US$18 billion for the next five years in order to boost its upstream performance and to keep its domestic downstream dominance, CEO Ari Soemarno said on Wednesday.

Ari said Pertamina would need $7 billion in upstream sector and $11 billion to develop its downstream facilities. He said the funds needed would be sourced from own equity, joint ventures, joint investment and loan.

Pertamina would adopt strategy to cooperate with third parties including multinational companies in exploring and exploiting its numerous working areas, which spanned across the areas and said to be under-explored, he said. ?Pertamina wants to share the risk in managing its upstream assets,? he said.

Ari said the huge funds in downstream sector would be needed to increase competitiveness in downstream sector such as modifying current refineries. ?Pertamina?s refineries are not designed to be profit center in the first place. Pertamina intend to modify them in order to have flexibility in blending crude and to increase the complexity of the refineries in order to get more product variations,? he said.

Pertamina currently operates all nine existing refineries in the country with capacity of 1 million barrels per day.

He brushed aside plan to build new refinery in the near future as construction costs are currently soaring. ?Pertamina will wait until pricing becomes more reasonable,? he said.

Ari said in 2006, Pertamina was optimistic to book RP.360 trillion (US$=9,100) in revenue and Rp.20 trillion net profit. He said in 2006 Pertamina?s capital expenditure would be at round $600 million.

Ari said Pertamina?s opening balance sheet is expected to be completed in 2 months? time. ?We?re optimistic to have a favorable rating,? he said. Pertamina, which according to Oil and Gas Law must operate as limited liability company must have opening balance sheet. (godang)