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Royal Dutch Shell has already notified SKK less than half of a full-year forecast of $32.09bn,
Migas of its desire to exit the giant Masela gas and prompted SKK Migas to lower the target to
block, which will underpin the Abadi liquefied $19.91bn.
natural gas (LNG) terminal development. While The country was already struggling to attract
the regulator told the media Shell, alongside investment to its upstream, owing to political
partner Inpex, would have to continue develop- uncertainty and a history of bureaucracy, before
ing the scheme, it acknowledged that the project the pandemic, which will only make that task
would likely need to be recalculated and that it harder. With yet another hurdle in Jakarta’s
had become “a wait-and-see situation”. path, the government’s goal of boosting national
Government revenue from the oil and gas oil production to 1mn bpd by 2030 is once more
industry amounted to $11.89bn, which was in doubt.™

Labour union challenges

Pertamina reform plan

POLICY THE Indonesian government’s plan to stream- sub-holdings and said: “Don’t make things up.
line state-owned Pertamina has run into We are ready to face their lawsuit.”
opposition from the company’s labour union, Thohir announced the government’s plan to
which has accused Jakarta of trying to priva- restructure Pertamina in mid-June, around the
tise the major. same time the company’s board was trimmed.
Indonesian State-owned Enterprises (SOEs) The government scrapped directorial posi-
Minister Erick Thohir announced the govern- tions relating to a number of divisions, includ-
ment’s plan to restructure Pertamina on June ing the upstream and downstream segments.
12, noting that the major’s subsidiaries would be Jakarta wanted the company’s focus to be on
merged into sector specific sub-holdings, which operations as it prepares to form the individual
would eventually hold initial public offerings sub-holdings.
(IPOs). “The target is to have one or two sub-hold-
The Federation of Pertamina United Labor ings to go public within two years. This is part of
Unions (FSPPB) has taken exception to the efforts to improve transparency and their capa-
merger plan, however, and has filed a lawsuit bilities,” Thohir said at the time. “It’s time for con-
against the ministry. solidation and efficiencies.”
SOEs’ special staff of communication The Indonesian government is looking for
Arya Sinulangga told local media outlet ways to improve Pertamina’s efficiency follow-
Tempo on July 23 that the ministry intended ing the collapse in oil prices and the subsequent
to fight the case, as it had followed existing dwindling investment in the upstream.
constitutional laws. Upstream regulator SKK Migas said last
Sinulangga said: “In terms of ownership, week that the country had produced 713,300
assets and whatever it is. It remains to be owned barrels per day of crude oil in the first six
by Pertamina. The firm’s sub-holdings are Per- months of the year, down from the 755,000
tamina’s assets and not owned by the sub-hold- bpd in the same period of 2019. Natural gas
ing firms.” production slipped from 6.67bn cubic feet
The official denied that Pertamina’s employ- (188.89mn cubic metres) per day to 5.61 bcf
ees stood to lose out from the creation of the (158.88 mcm) per day.™

P6 www. NEWSBASE .com Week 29 23•July•2020