JAKARTA. The holding of oil and gas state owned oil and gas companies is almost definitely established in January. PT Pertamina (State Owned Oil Company) will likely be leading the company, and also supervising PT Perusahaan Gas Negara Tbk (State Gas Company).
On 30 December 2016, President Joko Widodo has signed Government Regulation No 72/2016, which revised the Government Rgulation No 43/2005 on the Inclusion and Administration of State Capital on State Owned Enterprise (SOE) and Limited Company.
“The establishment of oil and gas holding requires the revision,” said Deputy for Restructuring and Business Development of Ministry of SOE Aloysius Kiik Ro. Subsequently, the government will immediately establish oil and gas holding. Aloysius added, the draft of the government regulation on oil and gas holding is still being assessed by Ministry of Finance.
The draft of the regulation mentions that the government will increase state capital participation in Pertamina by shifting 13.8 billion of government’s series B shares in PGN to Pertamina. The number is equal with 59.6% of PGN’s shareholders. The state capital participation value was determined by Minister of Finance, based on the proposal of Minister of SOE.
Vice President Director of Pertamina Ahmad Bambang said that he still does not have information about the current status of the oil and gas holding. Likewise, Chairman of PGN Labors Union Rosyid admitted, he has not received yet the regulation so that he refused to make comment related to the government regulation.
The establishment of the holding will change the status of PGN, which will become the subsidiary of Pertamina, to be private company. As a private company, PGN will no longer have obligation to pay the dividends to the state. In fact, PGN is one of the ten largest dividends contributors SOEs to the state.
The future holding will also combine oil and gas under one entity, while oil and gas are substituting. The larger fuel conversion to gas will reduce fuel imports. In this case, the holding will be allowed to control the gas management so that the holding will be difficult to maintain the oil import business.
Energy observer Iwan Garniwa questioned the job division of the holding, since the holding will have three superiors, namely Ministry of Oil and Mineral Resources, Ministry of SOEs, and Ministry of Finance. However, Aloysius stated that the oil and gas holding will have privilege as SOEs holding.