Pertamina set to double market value in five years

State oil and gas company Pertamina is embarking on ambitious plan to boost market value and pre-tax earnings in 5 years.

?Pertamina is targeting to increase enterprise market value from US$ 15 billion in 2003 to $37 billion in 2007 and to increase profitability from Rp. 9.7 trillion (US$ = Rp. 9,000) in 2003 to Rp. 24 trillion,? said president Baihaki Hakim in a parliamentary hearing Tuesday night.

Baihaki said Pertamina is also planning to cut workforce from 26, 000 currently to 18, 000.

Baihaki said the growth would be driven by upstream sector, where production is set at 470,000 barrels of oil equivalent per day (BOEPD) in 2007, from 255,000 BOEPD in 2003. Oil, gas and geothermal reserves will also be increased from 2.7 billion barrels oil equivalent (BOE) to 3.7 billion BOE.

?Pertamina is aiming to be the second largest producer after Caltex,? said Baihaki.

Earnings from upstream sector is expected to jump from Rp. 10.2 trillion currently to Rp. 21.9 trillion in 2007, while downstream sector is expected to contribute Rp. 3.2 trillion in 2007.

In order to achieve the goal, said Baihaki, Pertamina will need capital investment of US$ 7.3 billion for both upstream a nd downstream sectors in the next five years.

The new oil and gas law dismantles Pertamina?s privilege as regulator-player it had enjoyed for years and the company is preparing itself to enter competitive market.

The first step Pertamina had taken is to change the company?s status into limited liability company, which will give more flexibility to move and to tap international financial sources. The next step is to restructure the company?s operations under one holding company as preparation to go public in 2005-2006. (alex/godang)