State energy holding company Pertamina will issue a global bond in an effort to seek alternative financing for its long-term investments, including in the upstream sector, says its finance director, Pahala N. Mansury.
Pertamina’s upstream performance in the first half of 2018 was gloomy because four of its subsidiaries failed to reach the targets set out in the state budget.
One of them is PT Pertamina EP, which the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) estimated fell 7.6 percent short of the oil lifting (ready to sell oil) target that was set at 85,869 barrels of oil per day (bopd) by the end of the year.
Pahala said the decision to issue a global bond had reached the request for proposal (RFP) stage, adding that deals would be struck with five banks.
He, however, failed to disclose the name of the banks and the value of the bond.
“Our plan is to issue it [the global bond] before year’s end. […] The proceeds of the bond issuance will be used for long-term investments, including our upstream sectors,” Pahala said.
The bond issuance is likely to help the firm ease its financial burden caused by the sale of Premium-branded gasoline, which is reportedly sold below market price because the government has prohibited the company from increasing the fuel price until next year.
Up until August, Pertamina’s fuel product import stood at 393,000 barrels per day (bpd) or 6 percent higher than 2017’s full-year import. (bbn)
The Jakarta Post