Pertamina
In 1957, Dutch assets in petroleum were nationalized, from which Permina was founded as a state-owned oil monopoly, headed by Lieutenant-General Ibnu Sutowo. Ibnu Sutowo's position as the 2nd deputy of Abdul Haris Nasution was the beginning of the army's involvement in the oil industry. Permina distributed oil for the entire archipelago.
Permina founded the Apprentice Technical School in Brandan to train and produce experts in the field. To meet this goal Permina established the Oil Academy in Bandung at 1962. Oil Academy's curriculum pertains to the technical aspects of the oil industry, and the graduates turned into the main forces in Pertamin (which later transformed to Pertamina).
In 1960, the Congress enacted a policy that the mining of Indonesian oil and ground gases are only permitted for the state, through a state-administered company. Pertamin, established in 1961, was responsible for the administration, management and controlling of the exploration and production. The policy was short lived. An agreement between the state and foreign companies was affirmed that gradually, oil refinement manufactures and other assets in marketing and distribution were to be sold to Indonesia within five to fifteen years.
In 1968, to consolidate oil and gas industry for its management, exploration, marketing and distribution, Permina and Pertamin merged and became PN. Pertamina. It continued to do little drilling itself, but made production-sharing agreements with foreign companies.
After the merge, Pertamina's production rose considerably. By the end of 1973, it directly produced 28.2% of Indonesia's oil, with agreements of Caltex and Stanvac to produce the rest (67.8% and 3.6%, respectively). Its assets included seven refineries, oil terminals, 116 tankers, 102 other vessels and an airline. It was also active in cement, fertilizer, liquid natural gas, steel, hospitals, real estate, a rice estate, and telecommunications.
The 1974 oil price increases produced revenues of $4.2 billion in that year, equivalent to approximately one 6th of Indonesia's gross domestic product. Much of this revenue was used by Sutowo to expand Pertamina's interests far beyond oil production to include investments in oil tankers, steel and construction. Pertamina built the Bina Graha, the presidential executive office building in Jakarta. The global oil crisis of the 1970s greatly increased oil prices and profits. Pertamina initially provided a fiscal lift to the hopes of Indonesia's development planners.
At each stage of the transaction chain somebody was getting a percentage... If accidents occurred, as in 1972 when eighty impoverished people died... they could be covered up.
In 1973, the government's ability to borrow money from overseas was constrained, and Pertamina was no longer providing revenues to the state. Instead, the massive enterprise turned out not to be making money, but compiling exponentially large losses. In February 1975, Pertamina could no longer pay its American and Canadian creditors. An investigation followed, which revealed over US$10 billion in debts, mismanagement, and corruption within the company. This debt was equivalent to approximately thirty percent of Indonesia's GNP at the time. Others offer a figure of a $15 billion debt. A public investigation hurt the reputation of the national elite both among Indonesians and foreigners. The man most responsible for the collapse, Bruce Rappaport, was never charged. The charges against Ibnu Sutowo were dismissed. Ibnu Sutowo and his family were among the richest and most powerful in Indonesia, into the 21st century. The government took over the operation of the company and sought means by which to repay its debts. Pertamina's debt problems were eventually solved through a large government bail-out, which nearly doubled Indonesia's foreign debt.
In 2003 Pertamina legally became PT. Pertamina, as per the enactment of Government Regulation No.31/2003. Pertamina is now under the coordinator of the State Minister of State-owned Enterprises.
Like other contractors, Pertamina holds Cooperation Contract to Oil and Gas Regulatory Body. With its transformation into a limited liability company, Pertamina has become a business entity with the main target of making a profit.
Pertamina has not built any new refineries since the Balongan refinery was opened in West Java in the mid-1990s.
Source:Indonesian Ministry of Energy and Resources, 2012 Handbook of Energy and Economic Statistics of Indonesia.
| There are three other Indonesia which Pertamina is | small refineries in responsible for operating. |
In addition to the refineries which Pertamina owns, Pertamina has two operating companies which manage output from LNG plants.
During 2012 and early 2013 it was announced several times that there were plans to build two more large fuel refineries, each with a capacity of around 300,000 bpd, perhaps in Balongon, West Java and in Tuban, East Java. The 1st facility was planned to be build by Pertamina in partnership with Kuwait Petroleum, while the 2nd second was expected be built by Pertamina in cooperation with Saudi Aramco. Total investment was expected to be around $20 billion. One main problem holding up agreement to build the refineries was the issue of financial concessions to be provided for the foreign investors. Eventually, in September 2013 it was announced that the plans for the 1st refinery had been cancelled. At the same time, the government said that there were plans for yet a different refinery project which would be constructed solely by Pertamina and funded by the state. The crude oil for this alternative project was expected to be supplied from Iraq.
Pertamina also has two gas reserves and a petrochemical company. Pertamina's products include a great variety of fuels, chemicals, additives, and retail products.
Pertamina has by far the largest distribution network of petroleum products in Indonesia and is familiar to virtually all Indonesian citizens.
PT Pertamina EP is engaged in managing the upstream oil and gas production through a more manageable exploration and exploitation activities. Adding to that, PEP has been undertaking other supporting businesses, which have been intended to back up the main business directly or indirectly.
Presently, Pertamina EP production level for oil is around 127,635 throusand barrel oil per day and around 1,054 million standard cubic feet per day (MMSCFD) for gas.
Pertamina EP Working Areas of 140.000 km2 were once largely PT Pertamina รข€™s Oil and Gas Mining Authority Zone. The working areas are managed through own operation and partnership cooperation.
Pertamina EP Working Areas consist of five assets. The operation of those assets comprise 19 Field Areas, namely Rantau, Pangkalan Susu, Lirik, Jambi and Ramba in Asset 1, Prabumulih, Adera, Limau and Pendopo in Asset 2, Tanjung, Subang and Jatibarang in Asset 3, Cepu in Asset 4 as well as Sangatta, Sangasanga, Bunyu, Tarakan, Tanjung and Papua in Asset 5.
Beside the management of working areas as stated earlier, other business pattern is management through projects, such as Pondok Makmur Development Project in West Java, Paku Gajah Development Project in South Sumatera, Jawa Gas Development Project in Central Java, and Matindok Gas Development Project in Central Sulawesi.
Related Sites for Pertamina
- Jobs - Home read Pertamina
- Daftar Produk - Unit Bisnis Pelumas PERTAMINA read Pertamina
- Pertamina | LinkedIn read Pertamina
- Pertamina Lubricants - Synthetic Lubricant and Automotive Engine ... read Pertamina
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