Erick Thohir Asks To Anticipate Middle East Conflict, Pertamina Boss Prepares Mitigation Steps

JAKARTA - President Director of PT Pertamina Nicke Widyawati responded to SOE Minister Erick Thohir's request to anticipate the impact of the world's economic and geopolitical turmoil.

Erick said this condition triggered the strengthening of the US dollar against the rupiah and of course the increase in WTI and Brent oil prices, which had penetrated 85.7 US dollars and 90.5 US dollars per barrel, respectively. Moreover, world oil prices are projected to reach 100 US dollars per barrel.

In response to this, Nicke said that her party was intensely monitoring the latest developments and the impact of geopolitical heating on the global energy supply chain.

Nicke said the world's oil fluctuations would become more dynamic after the increasing tensions that occurred in the middle east.

"We will continue to increase risk mitigation efforts to reduce the potential impact of the dynamics of economic and geopolitical situations, including cost control, optimal selection of crude compositions, effective inventory management, increased high yield production and efficiency in all operational lines," said Nicke.

Previously, Erick asked SOEs to take quick steps in minimizing global impacts through a review of operational costs for capital expenditures, debts that will mature, corporate action plans, and conducting stress tests in seeing BUMN conditions in the current situation.

Erick asked state-owned banks to proportionally maintain the portion of credit affected by rupiah volatility, interest rates, and oil prices. Erick said that SOEs were affected by imported raw materials and SOEs with large amounts of foreign debt (in US dollars) such as Pertamina, PLN, Pharmaceutical SOEs, MIND ID, in order to optimize large purchases of US dollars in a short time.

"As well as conducting a sensitivity study on principal payments and or interest on debt in the dollar which will mature in the near future," continued Erick.