Pertamina

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  9. Oil and gas companies of Indonesia
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Perusahaan Pertambangan Minyak dan Gas Bumi Negara (PERTAMINA)
Type Government-owned corporation
Industry Oil and Gas
Founded 10 December 1957
Headquarters Jakarta, Indonesia
Key people Karen Agustiawan, President & CEO
Products Oil
Natural gas
Petrochemical manufacturing
Website Official website

Pertamina (Perusahaan Pertambangan Minyak dan Gas Bumi Negara, lit. 'State Oil and Natural Gas Mining Company') is an Indonesian government-owned corporation which extracts and refines the country's oil and gas reserves. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of Liquefied Natural Gas (LNG).[2]

History

Nationalization

This section needs additional citations for verification. (June 2008)

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.[3] Ibnu Sutowo's position as the second deputy of Abdul Haris Nasution was the beginning of the army's involvement in the oil industry.[4] Permina distributed oil for the entire archipelago.

Permina founded the Apprentice Technical School (Sekolah Kader Teknik) 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.

The 1970s

After the merge, Pertamina's production rose considerably (about 15% each in 1968 and 1969, and nearly 20% in 1973).[5] 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 sixth 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.[6] Pertamina built the Bina Graha, the presidential executive office building in Jakarta.[7] 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.

For President Suharto and other members of the ruling elite, revenue from Pertamina "an ongoing source of funding" without accountability: "they ran this cash-cow into the ground, using it for both military and personal ends."[8] Historian Adrian Vickers describes the endemic corruption at Pertamina:

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.[9]

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.[10] 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.[11] Others offer a figure of a $15 billion debt.[12] A public investigation hurt the reputation of the national elite both among Indonesians and foreigners. The man most responsible for the collapse, Ibnu Sutowo, was eventually dismissed. He and his family were among the richest and most powerful in Indonesia, into the 21st century.[8] The government took over the operation of the company and sought means by which to repay its debts.[7] Pertamina's debt problems were eventually solved through a large government bail-out, which nearly doubled Indonesia's foreign debt.[11]

Since the 1980s

File:PertaminaHO.jpg
The Pertamina head office building in Jakarta

In the 1980s, major partnerships with American and French firms produced vast quantities of petroleum. Caltex, a joint Chevron-Texaco company, and Total S.A. were some of the largest foreign players.[13]

Human rights observers have long expressed concerns about Indonesia's hostility to labor unions. According to the Multinational Monitor: "In 1985, the government ordered the firing of over 1,600 workers at Pertamina and foreign oil companies, charging that they had been members of the Indonesian Communist Party, which had been banned 19 years earlier when Suharto took power." [14]

In 2003 Pertamina legally became PT. Pertamina (Persero), 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.

Facilities

Currently Pertamina owns six oil refineries which have a capacity of 1,041.2 thousand barrels (Refinery Unit (RU) II in Dumai, RU III in Plaju, RU IV in Cilacap, RU V in Balikpapan, RU VI in Balongan, and RU VII in Kasim/Sorong), two gas reserves with a capacity of 31 tons per year, and a petrochemical company. Pertamina's products include a great variety of fuels, chemicals, additives, and retail products.

Filling stations

File:Pertamina filling station, Bali, Indonesia.jpg
Pertamina's filling station in Bali, Indonesia. There are separate filling islands for motorcycles and cars.

Pertamina has by far the largest distribution network of petroleum products (filling stations, etc.) in Indonesia and is familiar to virtually all Indonesian citizens.[citation needed]

Subsidiaries

Pertamina EP

PEP was established on 13 September 2005, to manage oil and gas operations (own operations) based on a Cooperation Contract (KKS) with BP Migas signed on 17 September 2005. As an upstream sector subsidiary, PEP carries out exploration and production of oil and gas in domestic working areas covering 140,000 km² formerly managed by PERTAMINA. PEP’s working area is divided into three regions: The Sumatra, Java, and Eastern Indonesian (KTI) Regions. The Sumatra Region covers the Rantau, Pangkalan Susu, Jambi, Pendopo and Prabumulih Fields, as well as the Pertamina EP Business Units (UBEP) at Jambi, Limau, Lirik, and Adera (ex JOB-EOR PERTAMINA Lekomaras, 22 April 2009). The Java Region covers The Cepu, Jatibarang, Subang and Tambun Fields. The Eastern Indonesian Region (KTI) covers: The Bunyu, Sangatta and Sorong Fields as well as the Tanjung and Sangasanga-Tarakan UBEPs.

Pertamina Gas

Pertamina established PT Pertagas on 23 February 2007, and it became PT Pertamina Gas in 2008. The company undertakes gas transportation, trading and processing. In the gas transmission business, Pertamina owns a gas pipeline network with a total volume of 34,000 km-inches in Northern Sumatra, Central Sumatra, Southern Sumatra, Western Java, Eastern Java, and East Kalimantan

In January 2009, PT Pertamina Gas obtained a Transportation Permit and in February 2009, it received an exclusive right from BPH Migas for gas transportation along 43 transmission routes. These permit and exclusive rights complemented the business permit that had been issued previously (in September 2008). By obtaining a business license and special rights, PT Pertamina Gas now has a regulatory basis to play the principal role in the gas business in Indonesia.

Pertamina Geothermal Energy

PGE was founded on 12 December 2006. This Pertamina subsidiary carries out geothermal exploration and exploitation in 15 working areas (WKP) in Indonesia, namely: Sibayak-Sinabung, Sibual-buali–Sarulla, Sungai Penuh-Sumurup, Tambang Sawah-Hululais, Lumut Balai, Waypanas-Ulubelu, Cibereum-Parabakti, Pengalengan (Patuha-Wayang Windu), Kamojang-Darajat, Karaha-Telagabodas, Dieng, Iyang-Argopuro, Tabanan-Bali, Lahendong-Tompaso and Kotamobagu.

Pertamina EP Cepu

PEP Cepu, which was established on 14 September 2005, is a subsidiary of PT Pertamina (Persero) that focuses on the upstream oil and gas business. In the Cepu Block, Pertamina has a 45% interest in partnership with Mobil Cepu Ltd (as the operator) and the Regional Owned Enterprise (BUMD) that manages the KKS for the Cepu Block.

Pertamina Drilling Services Indonesia

PT PDSI was established on 13 June 2008 as a drilling service management business entity. The services provided comprise drilling, workover activities, and drilling services that use a Daily Rate and Integrated Drilling Management (MPT) system for oil, gas, and geothermal wells.


Presently, PT PDSI owned 34 drilling rigs (28 owned by PT PDSI and 6 transferred from PT Usayana)

Pertamina Hulu Energy

PHE is one of the Upstream Directorate subsidiaries working in the oil and gas upstream business, and is also an upstream business vehicle for managing the domestic and overseas cooperation portfolio in the form of: Production Sharing Contracts (PSC), Joint Operating Body-Production Sharing Contracts (JOB-PSC), Indonesian Participating / Pertamina Participating Interests (IP/PPI) and Badan Operasi Bersama (BOB). PHE’s overseas working areas covered: Western Desert Block 3,Iraq; Block 10&11.1, Offshore South Vietnam; Block SK-305, Offshore Sarawak, Malaysia; Sabratah 17-3 Block, Offshore Libya; Sirte 123-3 Block, Libya; Block 13, Red Sea, Offshore Sudan; Block-3, Offshore Qatar; and Basker Manta Gummy Block, Australia.

Products

There are PERTAMINA’s products; consist of Fuel (BBM), non-fuel, Gas, Petrochemical, and Lubricant.[15]

Fuel (BBM)

Fuel Products:

  • Motor Gasoline (Such As : Premium 88 and Solar )
  • Kerosene
  • HSD (High Speed Diesel)
  • MDF (Marine Diesel Fuel)
  • MFO (Marine Fuel Oil)

Special Fuel

Special Fuel products :

  • Aviation Turbine Fuel
  • Bio Solar
  • Pertamax (RON 92)
  • Pertamax Plus (RON 95)
  • Bio Pertamax (RON 92 + E5)

Non-Fuel (Non-BBM)

Non Fuel Products :

  • Asphalt
  • Pelumas (Lube Base Oil)
  • Pelarut (Solvent)
  • Green Coke
  • Calcined Coke
  • Paraffin Wax
  • Slack Wax
  • Heavy Aromate

Gas

  • Gas Products consists of LPG (Liquid Petroleum Gas), Gas Fuel (BBG), Musicool (Substitute refrigerant for CFC, with low pollution and environmentally friendly)

Petrochemical

Numbers of PERTAMINA’s Petrochemical Products.

Lube Base Oil

Provides information of PERTAMINA’s Lube Base Oil Products based on their function:

  • Automotive Gear Oil
  • Circulating Oils
  • Heavy Duty Diesel Engine Oils
  • Industrial and Marine Engine Oils
  • Industrial and Hydraulic Oils
  • Passenger Car Oils
  • Powershift Transmissions and Heavy Equipment Hydraulic Oils
  • Refrigerating Oils
  • Two Stroke Gasoline Engine Oils

Notes

  1. ↑ [1]
  2. ↑ http://www.hoovers.com/pertamina/--ID__55884--/free-co-profile.xhtml
  3. ↑ Vickers (2005), p. 185.
  4. ↑ Ricklefs, A History of Modern Indonesia Since c. 1300, 2nd ed., Stanford: Stanford University Press, 1994, p. 262.
  5. ↑ Ricklefs, 296
  6. ↑ Schwarz (1994), p. 55
  7. ↑ 7.0 7.1 Ricklefs, 301
  8. ↑ 8.0 8.1 Vickers, Adrian. 2005. A History of Modern Indonesia, Cambridge: University of Cambridge Press, p. 185.
  9. ↑ Vickers, Adrian. 2005. A History of Modern Indonesia, Cambridge: University of Cambridge Press, p. 187.
  10. ↑ McCawley, Peter. 1978. "Some Consequences of the Pertamina Crisis in Indonesia," Jour of Southeast Asian Studies, IX(1), March.
  11. ↑ 11.0 11.1 Script error
  12. ↑ cf., Vickers, Adrian. 2005. A History of Modern Indonesia, Cambridge: University of Cambridge Press, p. 185.
  13. ↑ Weissman, Robert. 1990. "Rich Land, Poor People: The Economics of Indonesian Economic Development." The Multinational Monitor, October 1990 - Vol 11(no. 10).
  14. ↑ Weissman 1990
  15. ↑ http://www.pertamina.com/index.php/detail/read/our_products

External links

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