The profit to be made by Pertamina Oil Company this year was predicted to decrease by 50% to become IDR 13 trillion, lower than the profit made in 2008 amounting to IDR 30 trillion.
The global economic recession accounted for the decrease of profit, marked by the lessening demand of oil from Indonesia in addition to adverse local economic condition.
“Profit would slump this year as result of global economic downturn” this was stated by Anang Rizkami Noor, Vice President for Corporate Communication of Pertamina to Business News by phone on April 20, 2009.
In addition to that the downturn of world’s oil price also had its notable effect on the profit made by Pertamina.
The present world price of oil was between USD 40 and USD 50 per barrel, way below the price of oil in 2008 which reached USD 147 per barrel.
“There is still hope, knowing that the trend now is upgoing”
Pertamina would continue to make investments this year at the value of IDR 21 trillion.
IDR 11 trillion of the said amount would be allocated for upstream business like explorations and company acquisitions, whilst another IDR 10 trillions would be invested in downstream sector like processing.
The Indonesian Government had lowered the target of economic growth to 4.5% this year amidst the growing effect of the downgrading of the world’s economy.
The decline of the global economic activity had lowered demand as well as selling prices of Indonesian products like palm, rubber, copra, textile, and minery products.
The heightening of domestic economic activities before the global crisis which started on September last year had boosted the need for energy. The Government strived had to draw investors by offering various convenience including incentives whereby they can invest in gas-oil business.Indonesia’s oil and gas production output continued to plunge in the past few years, because the oil wells and resources were drying up while investments were scarce.