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Pertamina expects holding & subholding process in 4 months

JAKARTA ( – State-owned diversified energy company PT Pertamina expects the process to establish the oil and gas holding and sub-holdings to be completed within four months, after the government officially set up the oil and gas holding entity on April 11, 2018.

Director for Logistic, Supply Chain and Infrastructure of Pertamina Nicke Widyawati said on Monday (April 17) that Pertamina still needs time to finalize the establishment of holding entity.

The government has decided to set up an oil and gas holding company, in which Pertamina as the holding entity. The holding company will have four sub-holdings, namely Upstream, Processing, Retail and Gas.

PGN and Pertagas have several options to integrate their business, namely through merger, acquisition, or ‘inbreng’ (asset handover). The inbreng scheme is likely to be adopted, as it will not involve cash transfers.

Under the plan, all state-owned gas companies, PT Perusahaan Gas Negara Tbk (PGN), PT Pertamina Gas (Pertagas), will be grouped under sub-holding gas led by PGN. The upstream sub-holding will comprise of Pertamina Hulu Energy and PT Saka Energi Indonesia, a subsidiary of PGN, which will be led by Pertamina Hulu.

Observers said the creation of sub-holdings will make the development of gas infrastructure in the country to be more effective as there is no need for the two companies to compete. But some people were doubtful about the effectiveness of the holding scheme. They said setting up holding will complicate decision-making process within the group.

Nicke said Pertamina is currently assessing the mechanism of establishing the holding and sub-holding. (*)

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