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AsianOil SOUTHEAST ASIA AsianOil

Indonesia begins

overhauling Pertamina

The government has launched a top down reform of the
company as it looks to boost operational efficiencies

COMMENTARY INDONESIA’S deteriorating upstream perfor- will amount to $18.7-22.31bn, based on an oil
mance has forced the government to rethink price range of $40-50 per barrel.
state-owned Pertamina’s future, unveiling plans Based on these current figures, Pertamina is
WHAT: that will see the company’s operations com- expected to contribute $5.86bn in government
Pertamina’s board has partmentalised and even opened up to private income this year and $5.30-7.19bn in 2021.
been trimmed from 11 investment. Falling oil and gas production, with liftings
members to six. Jakarta has begun a top down restructuring of down marginally for both in January-May, has
Pertamina, from trimming the number of board prompted the regulator to lower its upstream
WHY: seats to unveiling plans for subsidiaries being targets twice this year.
The major’s subsidiaries merged along strict sector lines before eventu- April saw this year’s oil lifting target cut by 4%
are going to be merged ally launching their own initial public offerings to 725,000 barrels per day from an initial target
into a handful of larger (IPOs). The goal is to boost performance across of 755,000 bpd, while the gas target received a
companies. the board by reducing corporate bloat, State- 14.2% haircut from 6.67bn cubic feet (188.89mn
Owned Enterprise Minister Erick Thohir said cubic metres) per day to 5.73 bcf (162.27 mcm)
WHAT NEXT: on June 12. per day. These were lowered again on June 11 to
It may be years before The move is a dramatic rethink of the coun- 705,000 bpd and 5.64 bcf (159.72 mcm) respec-
these efforts deliver try’s oil and gas giant, but is sensible given the tively. SKK Migas kept its 2021 crude lifting esti-
the desired operational challenges facing the country’s oil and gas sector. mates unchanged in its June 18 statement.
efficiencies. Oil liftings in the first five months of the year
Upstream struggle inched down to 701,000 bpd from 701,600 bpd
Upstream regulator SKK Migas has projected a year earlier, while gas lifting was also down
that the country’s upstream revenue will amount at 5.66 bcf (16.29 mcm) per day from 5.87 bcf
to $17.86bn this year based on an oil price of $38 (166.24 mcm) per day.
per barrel, agency head Dwi Soetjipto told Par- The agency has been concerned with
liament on June 18. upstream investment levels over the past few
The figure, a far cry from the agency’s ini- years and Soetjipto highlighted shrinking oil and
tial projection of $32bn, is the second revenue gas developer spending as an area of concern yet
revision this year after SKK Migas lowered its again.
income projections to $19.96bn in April. The “The investment [in the upstream] was
regulator now projects that next year’s revenue initially targeted at $13.8bn, but based on the

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