OIL & GAS INDUSTRY IN INDONESIA: FINANCIAL PERFORMANCE BEFORE AND DURING COVID-19 UNCERTAINTY

• Main Author: Amin Tahta, Muhammad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63482
• Institution: Institut Teknologi Bandung

COVID-19 continued to overwhelm the healthcare systems and disrupt various sectors of the global economy. The oil and gas sector is no exception. On 20 April 2020, stakeholders in the oil and gas industry witnessed something that had never occurred before. West Texas Intermediate (WTI) crude oil futures reaches negative territory for the first time in history and fell as low as minus $37.63 per barrel. While 2021 exhibits improvement, there is no clear certainty in sight. Stakeholders in the oil and gas industry need to embrace the pandemic crisis. PT Elnusa Tbk, PT Medco Energi Internasional Tbk, and PT Energi Mega Persada are privately-owned companies that operated in the upstream segment of the industry. In order to evaluate the impact of the pandemic, the financial performance of the three companies from the first quarter of 2018 to the third quarter of 2021 are assessed and evaluated based on the decree of the Ministry of State-Owned Enterprises No KEP-100 MBU/2002. Qualitative analysis is also implemented to analyze the current industry and global situation through the PESTEL Analysis method. Interviews were conducted with twelve participants to get more knowledge into the topic. From the financial analysis, it can be concluded that PT Elnusa Tbk was the overall best performer during the period, followed by PT Energi Mega Persada and PT Medco Energi Internasional. Prior to the pandemic, Elnusa consistently performed at a high level and belongs to the AA category. However, during the pandemic, their performance was on a downward trend due to the decline in the profitability ratio. Energi Mega Persada successfully turned around their bad result in the beginning by consistently improving their performance until they belong to the AA level during 2020. In 2021, their financial result did not display good results due to the decline in profitability ratio. Medco Energi started the first half of 2018 with a fair result, but their performance soon declined, aggravated by the pandemic, and considered less healthy until the end of 2020. In 2021, the company showed a sign of a comeback as it remarkably showed a positive result in profitability ratio, turning the company into the AA category. From the PESTEL Analysis, it can be implied that the current political policy is favorable toward the oil and gas industry. It actively reforms the regulation and provides incentives to attract capital into funding their project. The economic condition and crude oil price are currently in a good situation, showing massive improvement in 2021 compared to the previous years. The young generation was displaying greater awareness of the environmental issues, but their stigma toward fossil fuel was still realistic. Several technologies including Enhanced Oil Recovery, Carbon Capture Utilization and Storage, and Information Technology are on the rise and should be utilized to streamline the operating process and become more environmentally friendly.