* Pertamina targets 2019 profit of $1.5 bln to $2 bln -CFO
* State energy company profits hit by govt fuel policies
* Plans to raise up to $3.5 bln in 2019 for capex needs -CFO (Recasts, adds quotes, context)
By Cindy Silviana and Fergus Jensen
JAKARTA, Jan 30 (Reuters) - Indonesia’s state energy company Pertamina has cut its 2019 capital spending target by about a quarter, after costly acquisitions of oilfields and integration with state gas company PGN in late 2018, the company’s chief financial officer said.
The company’s revised capital spending target will stand between $4.2 billion and $4.5 billion this year, CFO Pahala Nugraha Mansury told reporters on Wednesday.
That’s significantly lower than the previous target of $5.5 billion Mansury had stated in November.
The government had hoped that transferring operatorship of multiple upstream assets to Pertamina would “compensate” the state energy company for the dent in its profit from government fuel-pricing policies.
However, analysts have questioned the economics of that rationale as maintaining output from the aging oilfields will require significant investment in coming years, and fuel price controls were estimated to have cost Pertamina up to $2 billion in 2018.
Referring to the revised capital spending target, Mansury discussed about the $784 million signature bonus that Pertamina had to pay the government for the Rokan block acquisition from Chevron, and the $1.39 billion acquisition of Pertagas by Pertamina’s new gas subsidiary Perusahaan Gas Negara (PGN).
To achieve its 2019 spending plans, Pertamina planned to raise up to $3.5 billion “from various instruments”, Mansury said.
He later clarified that Pertamina was looking at several fundraising options including project financing, global bonds, bank loans and syndicated loan facilities.
Pertamina is also targeting a profit of $1.5 billion to $2 billion in 2019, Mansury said, below its initial 2018 profit target of 32.77 trillion rupiah ($2.32 billion).
However, Mansury declined to comment on the company’s 2018 profit as it was currently being audited.
Pertamina was seen posting its lowest first-half profit in four years for 2018, at less than 5 trillion rupiah ($354.06 million), another official said in September, squeezed by government fuel polices, higher oil prices and a slide in the rupiah exchange rate.
Pertamina has been pushed by the government to expand its reserves by taking over energy assets. The Indonesian energy company acquired the Mahakam gas block from France’s Total and Japan’s Inpex in 2018, but investment in exploration in the gas field has declined.
$1 = 14,122 rupiah Reporting by Cindy Silviana; additional reporting by Wilda Asmarini; writing by Fergus Jensen; Editing by Christian Schmollinger and Sherry Jacob-Phillips