Pertamina
PT Pertamina or Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin and Permina. The firm is currently the second-largest crude oil producer in Indonesia behind the US-based Chevron Pacific Indonesia.
In 2013 for the first time, Pertamina ranked no. 122 in the Fortune Global 500 list of companies with revenues totalling to $70.9 billion, Pertamina is also the sole Indonesian company to be featured in the list.
History
Nationalization
In 1957, Dutch assets in petroleum were nationalised, from which Permina was founded as a state-owned oil monopoly, headed by Lieutenant-General Ibnu Sutowo. Ibnu Sutowo's position as the second deputy of Abdul Haris Nasution was the beginning of the armed forces' involvement in the oil industry. Permina distributed oil for the entire archipelago.Permina founded the Apprentice Technical School in Brandan to train and produce experts in the field. To meet this goal Permina established the Oil Academy in Bandung in 1962. Oil Academy's curriculum pertains to the technical aspects of the oil industry, and the graduates became the main forces of Pertamin.
In 1960, the People's Consultative Assembly enacted a policy that the mining of Indonesian oil and ground gases are only permitted for the state, through a state-administered company. Pertamin, established in 1961, was responsible for the administration, management and controlling of the exploration and production. The policy was short lived. An agreement between the state and foreign companies was affirmed that gradually, oil refinery manufactures and other assets in marketing and distribution were to be sold to Indonesia within five to fifteen years.
In 1968, to consolidate oil and gas industry for its management, exploration, marketing and distribution, Permina and Pertamin merged and became PN. Pertamina. It continued to do little drilling itself, but made production-sharing agreements with foreign companies.
The 1970s
After the merge, Pertamina's production rose considerably. By the end of 1973, it directly produced 28.2% of Indonesia's oil, with agreements of Caltex and Stanvac to produce the rest. Its assets included seven refineries, oil terminals, 116 tankers, 102 other vessels and an airline. It was also active in cement, fertiliser, liquid natural gas, steel, hospitals, real estate, a rice estate, and telecommunications.The 1974 oil price increases produced revenues of $4.2 billion in that year, equivalent to approximately one sixth of Indonesia's gross domestic product. Much of this revenue was used by Sutowo to expand Pertamina's interests far beyond oil production to include investments in oil tankers, steel and construction. Pertamina built the Bina Graha, the presidential executive office building in Jakarta. The global oil crisis of the 1970s greatly increased oil prices and profits. Pertamina initially provided a fiscal lift to the hopes of Indonesia's development planners.
For President Suharto and other members of the ruling elite revenue from Pertamina was "an ongoing source of funding" without accountability. "They ran this cash-cow into the ground, using it for both military and personal ends." Historian Adrian Vickers describes the endemic corruption at Pertamina:
At each stage of the transaction chain somebody was getting a percentage... If accidents occurred, as in 1972 when eighty impoverished people died... they could be covered up.
In 1973, the government's ability to borrow money from overseas was constrained, and Pertamina was no longer providing revenues to the state. Instead, the massive enterprise turned out not to be making money, but compiling exponentially large losses. In February 1975, Pertamina could no longer pay its American and Canadian creditors. An investigation followed, which revealed over US$10 billion in debts, mismanagement, and corruption within the company. This debt was equivalent to approximately thirty percent of Indonesia's GNP at the time. Others offer a figure of a $15 billion debt. A public investigation hurt the reputation of the national elite both among Indonesians and foreigners. The charges against Ibnu Sutowo were dismissed. Ibnu Sutowo and his family were among the richest and most powerful in Indonesia, into the 21st century. The government took over the operation of the company and sought means by which to repay its debts. Pertamina's debt problems were eventually solved through a large government bail-out, which nearly doubled Indonesia's foreign debt.
Since the 1980s
observers have long expressed concerns about Indonesia's hostility to labour unions. According to the Multinational Monitor: "In 1985, the government ordered the firing of over 1,600 workers at Pertamina and foreign oil companies, charging that they had been members of the Indonesian Communist Party, which had been banned 19 years earlier when Suharto took power."In 2003 Pertamina legally became PT. Pertamina, as per the enactment of Government Regulation No.31/2003. Pertamina is now under the coordinator of the State Minister of State-owned Enterprises.
Like other contractors, Pertamina holds Cooperation Contract to the Oil and Gas Regulatory Body. With its transformation into a limited liability company, Pertamina has become a business entity with the main target of making a profit.
President directors
During the 1970s, until 1976, the president director of Pertamina was Ibnu Sutowo, a well-known figure in Indonesia. Since then, there have been a number of president directors. Recent president directors have included the following:No | Name | Begin | End |
1 | Soegijanto | 1996 | 1998 |
2 | Martiono Hadianto | 1998 | 2000 |
3 | Baihaki Hakim | 2000 | 2003 |
4 | Ariffi Nawawi | 2003 | 2004 |
5 | Widya Purnama | 2004 | 2006 |
6 | Ari Hernanto Soemarno | 2006 | 2009 |
7 | Karen Agustiawan | 2009 | 2014 |
8 | Dwi Soetjipto | 2014 | 2017 |
9 | Elia Massa Manik | 2017 | 2018 |
10 | Nicke Widyawati | 2018 | present |
Soegijanto.
Martiono Hadianto. Before his appointment as president director of Pertamina, Martiono was briefly Finance Director of the state-owned airline company Garuda Indonesia
Baihaki Hakim. Baihaki was formerly president of Chevron Texaco's subsidiary in Indonesia PT Caltex Pacific Indonesia. He was appointed as president director of Pertamina by president Abdurrahman Wahid in 2000. Subsequent to his resignation in 2003, there was controversy surrounding decisions taken in Pertamina during his period as president director concerning the purchase of giant tankers for the transport of oil.
Ariffi Nawawi.
Widya Purnama. Widya Purnama was appointed from outside of the energy sector, formerly having been president of the Indonesian telecommunications company PT Indosat.
Ari Hernanto Soemarno.
Karen Agustiawan. In February 2009 it was announced that Karen Agustiawan would become president director of Pertamina for a five-year term. Her appointment was extended in 2013. She resigned for unannounced reasons in August 2014. It was said at the time that she had plans to teach in Harvard University in the United States.
Dwi Soetjipto. In November 2014, the new president of Indonesia Joko Widodo announced a major reorganisation of the board of Pertamina as part of a series of reform measures for the energy sector. A new president director, Dwi Soetjipto, was appointed along with a number of new members to the board. The appointment of Dwi Soetjipto, previously president director of the major state-owned cement firm PT Semen Indonesia, attracted media attention because unlike most previous president directors of Pertamina, he had little previous experience in the oil sector.
Elia Massa Manik. In March 2017, after Soetjipto was dismissed due to leadership issues, the Board appointed Manik who had served as president director of Elnusa, a Pertamina subsidiary, from 2011 to 2014. He then spent a period as the CEO of PT Perkebunan Nusantara III, the holding company of 14 state-owned agriculture firms.
Nicke Widyawati. In late August 2018, it was announced that president Jokowi had decided that Nicke Widyawati, who had been acting president director since March, would be confirmed in the position of head of Pertamina. The decision was announced at a press conference in the Ministry for State-Owned Enterprises on 29 August.
Facilities
Refineries
Pertamina has not built any new refineries since the Balongan refinery was opened in West Java in the mid-1990s.PTT Public Company Limited and Pertamina signed into partnership to build a new petrochemical complex in Indonesia for an estimated cost of US $4 to 5 billion.
Currently Pertamina owns six oil refineries which have a total combined capacity of around of oil per day:
No | Refinery Unit | Unit | Province | Capacity | Capacity |
1 | RU II | Dumai | Riau | - | |
2 | RU III | Plaju | South Sumatra | - | |
3 | RU IV | Cilacap | Central Java | - | |
4 | RU V | Balikpapan | East Kalimantan | - | |
5 | RU VI | Balongan | West Java | - | |
6 | RU VII | Kasim/Sorong | West Papua | - | |
Total | - |
Source:Indonesian Ministry of Energy and Resources, .
There are several other refineries in Indonesia which Pertamina has responsibilities for:
No | Unit | Province | Capacity | Capacity |
1 | Sungei Pakning | Riau | - | |
2 | Pangkalan Brandan | North Sumatra | - | |
3 | Cepu | Central Java | - | |
4 | Tuban | East Java | - |
Source:Indonesian Ministry of Energy and Resources, .
In addition to the refineries which Pertamina owns, Pertamina has invested in two operating companies which manage output from LNG plants.
- PT Badak LNG operates a plant in Bontang, East Kalimantan, with 8 trains having a total capacity of 22.5 million tons per annum.
- PT Donggi Senoro LNG in Uso Village, Batui Subdistrict, Banggai Regency, Central Sulawesi Province, with 1 train with a capacity of 2 million tons per annum.
During 2012 and early 2013, it was announced several times that there were plans to build two more large fuel refineries, each with a capacity of around per day, perhaps in Balongan, West Java and in Tuban, East Java. The first facility was planned to be built by Pertamina in partnership with Kuwait Petroleum, while the second was expected be built by Pertamina in co-operation with Saudi Aramco. Total investment was expected to be around $20 billion. One main problem holding up agreement to build the refineries was the issue of financial concessions to be provided for the foreign investors. Eventually, in September 2013 it was announced that the plans for the first refinery had been cancelled. At the same time, the government said that there were plans for yet a different refinery project which would be constructed solely by Pertamina and funded by the state. The crude oil for this alternative project was expected to be supplied from Iraq. Pending further progress on these large investment plans, Pertamina has announced plans to upgrade the existing refineries so as to add around per day to Pertamina's current refining capacity of around per day.
Pertamina also has two gas reserves and a petrochemical company. Pertamina's products include a great variety of fuels, chemicals, additives, and retail products.
Petrol pumps
Pertamina is the largest distribution network of petroleum products in Indonesia.Bright Convenience Store
Along with the gas stations, Pertamina also has a convenience store chain, integrated with their gas stations. The development of Bright convenience stores and cafes is self-governed by PT Pertamina Retail.Subsidiaries
These are 27 subsidiaries of Pertamina based on Pertamina Annual Report 2016.- Pertamina EP
Presently, Pertamina EP production level for oil is around per day and around per day at standard conditions for gas.
Pertamina EP Working Areas of 140.000 km2 were once largely PT Pertamina ’s Oil and Gas Mining Authority Zone. The working areas are managed through own operation and partnership co-operation.
Pertamina EP Working Areas consist of five assets. The operation of those assets comprise 19 Field Areas, namely Rantau, Pangkalan Susu, Lirik, Jambi and Ramba in Asset 1, Prabumulih, Adera, Limau and Pendopo in Asset 2, Tambun, Subang and Jatibarang in Asset 3, Cepu in Asset 4 as well as Sangatta, Sangasanga, Bunyu, Tarakan, Tanjung and Papua in Asset 5.
Beside the management of working areas as stated earlier, other business patterns include management through projects, such as Pondok Makmur Development Project in West Java, Paku Gajah Development Project in South Sumatera, Jawa Gas Development Project in Central Java, and Matindok Gas Development Project in Central Sulawesi.
- Pertamina Gas
In the gas transmission business, Pertamina owns a gas pipeline network with a total volume of 34,000 km-inches in Northern Sumatra, Central Sumatra, Southern Sumatra, Western Java, Eastern Java, and East Kalimantan
In January 2009, PT Pertamina Gas obtained a Transportation Permit and in February 2009, it received an exclusive right from BPH Migas for gas transportation along 43 transmission routes. These permit and exclusive rights complemented the business permit that had been issued previously. By obtaining a business license and special rights, PT Pertamina Gas now has a regulatory basis to play the principal role in the gas business in Indonesia.
- Pertamina Geothermal Energy
- Pertamina EP Cepu
- Pertamina Drilling Services Indonesia
The services provided comprise drilling, workover activities, and drilling services that use a Daily Rate and Integrated Drilling Management system for oil, gas, and geothermal wells.
Presently, PT PDSI owns 34 drilling rigs
- Pertamina Hulu Energy
- Pertamina Internasional EP
- Pertamina EP Cepu ADK
- ConocoPhillips Algeria Ltd
- Pertamina Power Indonesia
- Pertamina Patra Niaga
- Pertamina Trans Kontinental
- Pertamina Retail
- Pertamina Lubricants
- Pertamina Internasional Shipping
- Pertamina Training & Consulting
- Patra Jasa
- Tugu Pratama Indonesia
- Pertamina Bina Medika
- Pelita Air Service
- Pertamina Dana Ventura
- Elnusa, Tbk.
- Pertamina Internasional Timor S.A.
- Pertamina Hulu Indonesia
- Pertamina East Natuna
- Pertamina Energy Trading Limited
- Pertamina E&P Libya
Products
Fuel
Fuel Products:
- Kerosene
- HSD
- MDF
- MFO
- Motor Gasoline
Special Fuel products :
- Aviation Gasoline
- Aviation Turbine Fuel
- Bio Solar
- Pertalite
- Bio Pertamax
- Pertamax
- Pertamax Plus
- Pertamax Turbo
- Pertamax Racing
- Pertamina Dex
- Dexlite
Non Fuel Products :
- Asphalt
- Calcined Coke
- Green Coke
- Heavy Aromate
- Paraffin Wax
- Pelarut
- Pelumas
- Slack Wax
Provides information of PERTAMINA’s Lube Base Oil Products based on their function:
- Automotive Gear Oil
- Circulating Oils
- Heavy Duty Diesel Engine Oils
- Industrial and Marine Engine Oils
- Industrial and Hydraulic Oils
- Passenger Car Oils
- Powershift Transmissions and Heavy Equipment Hydraulic Oils
- Refrigerating Oils
- Two Stroke Gasoline Engine Oils
Gas products include
- LPG
- Gas Fuel
- Musicool
- PolyPropylene
Financial summary
Assets | $ bill | Liabilities and equity | $ bill |
Current | 16.2 | Short-term liabilities | 8.1 |
Non-current | 31.0 | Long-term liabilities | 17.1 |
Total liabilities | 25.2 | ||
Equity | 22.1 | ||
Total | 47.2 | Total | 47.2 |
2016 data:
- Total sales: $36.5 billion
- Gross profit: $8.5 billion
- Net profit: $3.2 billion