Pertamina needs Rp 45.2 trillion for expansion

State owned oil company Pertamina needs Rp 42.2 trillion (US$ = Rp 8,500) to finance expansion program both in the down-stream and up-stream industries within the next five years, the company?s president Baihaki Hakim has said.

Baihaki said that the expansion was needed in order to further increase oil production and to strengthen the fuel distribution network. About Rp 8 trillion or about US$900 million would be needed to support this year?s expansion program, he added.

"The investment funds will be also used to acquire companies involved in up-stream activities as part of the expansion is aimed at raising Pertamina?s oil and gas reserves,? he said.

Pertamina, under the existing oil and gas law, operates as the regulator, operator as well as the government?s representative. But under the new law, which now being discussed, all the privileges, and monopoly will be removed.

Under the five-year expansion plan, Pertamina?s production is expected to increase to 265,000 barrels per day in 2006 from 82,000 bpd at present, Baihaki said. He added that in the down-stream sector, Pertamina was expected to increase its fuel production to 320 million barrels a year from 269 million barrels at present.

"In the shipping activities, we plan to operate like Malaysia?s Petronas, which operates its own ships,? Baihaki added. He said that still within the expansion plan, Pertamina would also plan to expand its operation into the Middle East, Southeast Asia and Africa.

Baihaki said that Pertamina would cooperate with Petronas and Petroleum Authority of Thailand in its expansion plan. ?The strategic alliance plan is being discussed,? he added.

According to Baihaki, its equity participation in ExxonMobil Oil Indonesia?s Cepu oil fields in Cirebon is part of the state oil and gas company?s program to boost its oil deposit portfolio. In the down-stream sector, Pertamina would also tie up with Hashim Djojohadikusomo?s PT Trans-Pacific Petrochemical Indotama. (Godang)