Dwi Sucipto, General Director of Pertamina, informed local media on Thursday (02/06) that the costs it takes for the company to produce one barrel of oil currently stands at an average of USD $15.6 throughout the company's oil fields. With oil prices nearly touching USD $50 per barrel it implies that Pertamina - Indonesia's largest state-owned company (in terms of revenue and income) - still makes a decent living. Even when oil prices fell below the USD $30 per barrel level in February 2016, the company still managed to make a profit.

Sucipto added that - contrary to many other oil companies - Pertamina was able to weather the storm at the year-start relatively easily because the company's downstream activities exceed its activities in the upstream sector. Those companies that mostly focus on upstream oil activities, however, are the ones that face most risks in times of low oil prices.

Pertamina's Production Costs:

per Barrel
Production costs for oil     15.6
Production costs for gas      1.4
Production costs for geothermal      3.1

Source: Investor Daily

Being the nation's state energy company Pertamina feels the responsibility to continue increasing its oil and gas output in order achieve the government's desire to make Indonesia self sufficient in terms of energy. The company's long-term target is to produce 2.04 million barrels of oil equivalent per day (boepd) by the year 2030 (this would imply it requires an average 8 percent year-on-year growth in production from 2016 onward). Currently Pertamina produces 641,000 boepd.

One of the key strategies to achieve this long-term target is to acquire new oil and gas blocks. Sucipto said Pertamina acquires new blocks every year. For example, next year the energy company is expected to add 162,000 boepd through the acquisition of four to five new blocks, particularly blocks located abroad. This year Pertamina hopes to add 14,000 boepd to its existing production capacity by acquiring new blocks abroad. The company is currently assessing a number of oil and gas blocks in several countries but declined to inform which countries (it is speculated in media that it involves blocks in Russia and Azerbaijan).

Crude Oil Price:

Besides acquiring new blocks, Pertamina is also focused on raising production rates at its existing oil and gas blocks located abroad, specifically its blocks in Algeria, Malaysia and Iraq. At the end of 2015 production at these blocks reached 79,000 barrels of oil per day (bpd) and 202 million standard cubic feet per day (mmscfd). However, in May 2016 production has already risen to 83,000 bpd (using the water flooding method in its Iraqi block). Later in 2016, Pertamina will use the infill drilling method at its Algerian block in an effort to boost production figures.

Pertamina's Oil & Gas Production:

Oil & Gas 547,000 boepd 641,000 boepd +17.2%

Source: Investor Daily

Where do you see the crude oil price going this year?

Voting possible:  -


  • Hovering near $50 per barrel (60.2%)
  • Rising toward $65 per barrel (20.4%)
  • Sliding to around $35 per barrel (15.9%)
  • I don't know (3.5%)

Total amount of votes: 113