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Pertamina delays issuing global bonds on market uncertainty

JAKARTA ( – Indonesian state-owned energy company PT Pertamina has decided to delay issuing global bonds due to high-interest rate and volatile market.

The decision was made upon an instruction of the State Owned Enterprise Minister Rini Soemarno. In addition to the unfavourable market, raising funds through issuing global is an urgent need as it does not need the money now.

Pertamina has earlier revealed a plan to issue global bonds worth US$700 million to fund the development of Rokan Block in Riau, which is handed over to Pertamina by the government once Chevron’s contract expires as well as other strategic projects.

Instead of issuing bonds, Pertamina could borrow money from banks with lower rates.

Pertamina is scheduled to begin operating Rokan Block from 2021, replacing PT Chevron Pacific Indonesia. In return, Pertamina pays signature bonus amounting to US4784 million or around Rp11.3 trillion.

Last year, Rokan Block produced an averaged 122,000 barrels of crude oil per day and 21 MMcfd of natural gas.

The block includes Duri field, one of the world’s largest steam floods, where Chevron’s 2017 production was 54,000 bpd.

Its remaining production on the block comes from 75 fields producing 68,000 bpd of crude and 21 MMcfd of natural gas. (*)

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