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current situation, that drops to a maximum of Gas Negara (PGN) already served this purpose
$11.8bn,” he said. Investment in 2019 amounted for natural gas units.
to $11.49bn. “The target is to have one or two sub-hold-
Companies were already struggling to jus- ings to go public within two years. This is part of
tify major new investment commitments in the efforts to improve transparency and their capa-
Indonesian upstream, which has been charac- bilities,” Thohir said. “It’s time for consolidation
terised by bureaucracy and political uncertainty, and efficiencies.”
before the global downturn. With oil prices Thohir said the move should help improve
struggling to mount a sustained recovery there Pertamina’s business performance and that the
is even less incentive to invest. government would use oil and gas production
The situation forced the government to lean figures as well as fuel distribution costs as metrics
heavily on Pertamina in the past and, while it is in gauging performance.
having to do so again, it at least appears ready to Pertamina used the words “agile” and
address questions around the company’s opera- “focused” when describing the reforms changes
tional capabilities. and said: “With the [restructuring], Pertamina’s
role as a holding will be directed into portfolio
Restructuring management and facilitating business synergy
Jakarta has reduced the number of board mem- among all units under Pertamina Group, speed-
bers from 11 to six, removing key positions ing up new business development and executing
related to operational oversight as it prepares to national programmes.”
merge the company’s various subsidiaries into a
handful of “sub-holdings”. What next
Thohir confirmed in a press briefing that the Pertamina’s ability to successfully assume control
government had scrapped directorial positions of a plethora of the country’s expiring oil and gas
relating to the upstream, downstream, petro- licences has been called into question the past.
chemical, corporate and retail marketing, meg- A sore point for the government is the limited
aprojects, investment and risk management. success the state major has seen at the Mahakam
The board now consist of Nicke Widya- block, which likely contributed to the govern-
wati as CEO as well as Emma Sri Martini, ment’s decision last year to extend ConocoPhil-
Koeshartanto, Mulyono, M Haryo Yunianto lips’s production-sharing contract (PSC) for the
and Iman Rachman as the respective heads Corridor Block rather than simply hand it over
of finance, human resources, logistics and to Pertamina.
infrastructure, corporate services, and With Pertamina likely to struggle to nail
restructuring and IPO preparation. down new partnerships in both the upstream
Rachman, the former head of state asset man- and downstream, given pre-existing economic
agement firm Perusahaan Pengelola Aset (PPA) and political challenges coupled with the pan-
and the board’s only new face, appears to have demic-induced global recession, Jakarta has
been brought in to help realise Thohir’s goal of decided that the state major must be made fit for
launching sub-holding IPOs within the next purpose.
couple of years. This is a sound decision, but is unlikely to
Thohir said the government wanted to cre- yield tangible benefits within the next year or so.
ate a single upstream unit as well as a marketing As such, an anticipation of further production
holding company, while noting that Perusahaan declines remains the safest bet.™

Week 24 18•June•2020 www. NEWSBASE .com P7