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Indonesia eyes IPOs at

Pertamina units

INVESTMENT INDONESIA aims to launch initial public offer- prices,” Pahala said, noting that the government
ings (IPOs) at two divisions of state oil company also wanted Pertamina to pursue greater off-
Pertamina this year, Deputy Enterprise Minis- shore hydrocarbon development.
ter Pahala Mansury told Parliament last week, In other news, Pertamina has launched talks
according to Reuters. with Shell to acquire the latter’s 35% interest in
The government envisions the sale of a the undeveloped Abadi LNG project, based on
10-15% stake in Pertamina’s upstream arm Hulu resources at the Masela block off Indonesia’s
Energi next year, and has launched an initial coast.
“sounding out” of potential investors, Pahala “We have entered the non-binding offer and
said. It also intends to wrap up an IPO at Per- are now in the negotiation stage,” Hulu Energi’s
tamina’s geothermal business in the first quarter director, Wiko Migantoro, said last week.
of 2023. The sale was meant to happen this year If a deal takes place, Pertamina could later
but it was stalled because of “less than optimum” divest part of its share in order to form a con-
market conditions,” according to the minister. sortium of two or three companies. US major
Refinitiv estimates that the sale at Hulu ExxonMobil and Malaysia’s Petronas have both
Energi could raise something between $1-3bn, expressed interest in the project.
while the stake in the geothermal unit could gen- “If Pertamina wants to divest, that’s the matter
erate up to $500mn. for later. Now it must take over 35%. The prob-
“The initial public offering of Pertamina lem is the price, whether Pertamina’s offer fits
Geothermal Energy, which uses seismic heat Shell or not,” Indonesia’s director for oil and gas,
to generate electricity in the volcano-studded Tutuka Ariadji, said.
archipelago, could value the company at up to Shell has already invested $1.4bn to date
$2bn depending on market conditions, people at the Masela block, and Pertamina must be
familiar with the matter said,” the Financial prepared this sum or more for the UK major’s
Times reported in October. take, according to Indonesian upstream regula-
Pahala did not comment on how much the tor SKKMigas. The regulator states that Shell’s
sales were expected to raise. This marks the first replacement must be prepared to invest at least
time that one of Pertamina’s units goes public. $6.3bn in the first five years of the project’s devel-
Hulu Energi alone is set to splash out $4-6bn in opment, estimating the total investment cost at
investment each year over the coming years, as $19.8bn.
the government pushes to boost energy security The project’s operator, Japan’s Inpex, is shortly
in response to declining oil and gas production expected to file a new plan of development for
over the past decade. Abadi LNG that will include a carbon capture
“We hope to diversify financing … and to and storage (CCS), raising cost by a further
optimise the momentum of high oil and gas $1.2-1.4bn.™

Week 50 15•December•2022 www. NEWSBASE .com P9