Pertamina

Business Summary

The company was established in 1957 under the name of Permina but changed its name to Pertamina after it merged with Pertamin in 1968. Pertamina became a huge source of revenue for the New Order government of President Suharto in the 1970s, thus enabling large investments in the country's infrastructure and successful poverty reduction programs. Mismanagement and corruption, however, almost led to its bankruptcy in 1975.

The company produces a multitude of commodities such as fuel, kerosene, LPG, LNG, and petrochemicals. It is the second-largest crude oil producer in Indonesia after Chevron Pacific Indonesia (which is the wholly owned subsidiary of America's Chevron, one of the world's leading integrated energy companies). Currently, Pertamina owns six oil refineries in Indonesia that have a combined production capacity of one million barrels of oil per day (bpd).

Pertamina is a state-owned enterprise that is fully owned by the Indonesian government and thus does not trade shares on the Indonesia stock exchange (IDX).

For its upstream activities (both national and international) Pertamina conducts its own operations or engages in partnerships in the form of joint operations with Joint Operating Bodies (JOB), Joint Operating Contracts (JOC) and Technical Assistance Contracts (TAC). Besides the exploration, production and transmission of oil and gas, Pertamina is also increasingly tapping Indonesia's coalbed methane and geothermal potential. For this reason the company changed the description of its core business from an 'oil and gas company' to an 'energy company'.

The decline in Indonesia's oil output in recent years is also reflected in Pertamina's performance. Although the company - through its subsidiary Pertamina EP - manages over 141,000 square kilometers of oil and gas field concessions throughout the country, its production-per-square-kilometer ratio is low compared to the other oil companies that are active in Indonesia, indicating Pertamina is not optimally exploiting its oil reserves.

To re-establish its name as a (global) influential oil & gas player, Pertamina has shifted its focus to stimulate growth through large capital expenditure over the next years. The company seeks to acquire exploration rights for new overseas oil blocks in the Middle East, Thailand, Burma and Vietnam (it already has blocks in Sudan, Qatar, Iraq, Malaysia, Australia and Libya) as well as to ramp up production of its domestic oil blocks by using more advanced technology and by acquiring new or existing blocks. In 2009, Pertamina purchased BP's stake in Offshore North West Java (ONWJ) and in 2011 Pertamina was awarded the West Madura offshore block in East Java.

Pertamina's Operational Highlights:

	2009	2010	2011	2012	2013	2014	2015	2016
Crude Oil (MMBO)	64.40	70.01	70.63	71.76	73.55	98.61	101.60	114.03
Natural Gas (BSCF)	502.05	532.85	558.60	563.15	557.67	588.67	694.33	717.70
Geothermal (GWh)		9,098	9,089	9,206	9,245	9,773	9,326	9,975

^{Source: Pertamina, Annual Report 2016}

Corporate Earnings Report Pertamina:

	2015	2016	2017
Income from Operations	3.92	6.19
Sales/Operating Revenues	41.76	36.49	42.96
Income before Tax	3.01	4.95
Net Profit	1.42	3.15	2.54
EBITDA	5.13	7.56	6.32
Total Assets	45.5	47.2
Total Liabilities	26.0	25.2
Earnings per Share¹	17.1	23.7

 

	2009	2010	2011	2012	2013	2014
Income from Operations	2.67	3.07	5.35	4.76	4.74	4.44
Sales/Operating Revenues	35.1	47.6	67.3	70.9	71.2	70.0
Income before Tax	2.68	3.29	4.50	4.80	5.00	3.79
Net Profit	1.56	1.85	2.40	2.76	3.00	1.45
EBITDA	3.54	4.37	5.59	6.06	6.56	5.73
Total Assets	33.5	30.0	35.0	41.0	49.5	50.7
Total Liabilities	18.5	18.2	21.6	25.8	32.3	31.9
Earnings per Share¹			29.1	33.2	36.1	17.4

^{in billion US dollar
¹ in US dollar
Source: Pertamina, Annual Report 2017}

Pertamina's Global Bonds:

	Pertamina     2021	Pertamina     2022	Pertamina     2023	Pertamina     2041
Tenor	10 years	10 years	10 years	30 years
Maturity	23 May 2021	3 May 2022	20 May 2023	27 May 2041
Size	USD $1.00 bln	USD $1.25 bln	USD $1.63 bln	USD $0.50 bln
Issue Price	98.09%	99.41%	100.00%	98.38%
Moody's¹	Ba1/stable	Baa3/stable	Baa3/stable	Ba1/stable
S&P¹	BB+/positive	BB+/positive	BB+/positive	BB+/positive
Fitch¹	BBB–/stable	BBB–/stable	BBB–/stable	BBB–/stable

^{¹ at issuance}

Pertamina's Global Bonds (continued):

	Pertamina     2042	Pertamina     2043	Pertamina     2044
Tenor	30 years	30 years	30 years
Maturity	3 May 2042	20 May 2043	30 May 2044
Size	USD $1.25 bln	USD $1.63 bln	USD $1.50 bln
Issue Price	98.63%	100.00%	100.00%
Moody's¹	Baa3/stable	Baa3/stable	Baa3/stable
S&P¹	BB+/positive	BB+/positive	BB+/stable
Fitch¹	BBB–/stable	BBB–/stable	BBB–/stable

^{¹ at issuance
Source: Pertamina, Annual Report 2015}