Pertamina to change status, sell profitable noncore assets<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
State oil and gas company Pertamina will soon have to divest
\nits ownership of a number of profitable noncore assets as
\nrequired by a new government regulation, a government official
\nsaid on Monday.<\/p>\n
Ministry of Energy and Mineral Resources public relations
\nchief TA Winakun said the government regulation was expected to
\nbe approved by President Megawati Soekarnoputri on March 31.<\/p>\n
\"The final discussion on the government regulation will be
\nheld on Thursday, but both sides (government and Pertamina) have
\nbasically agreed on the contents,\" he said.<\/p>\n
The regulation will become a legal basis for Pertamina to
\nbecome a limited liability company, a move that will help the
\ncompany boost its competitiveness when the oil and gas sector is
\nliberalized.<\/p>\n
Winakun said that Pertamina had also agreed it would unload
\nits noncore assets worth some Rp 4 trillion (US$450 million),
\nsuch as a hospital, an air transportation company, hotels and
\nproperty after it becomes a limited liability company.<\/p>\n
Reports earlier said that Pertamina wanted to retain the
\nnoncore assets by setting up subsidiaries.<\/p>\n
\"If Pertamina can manage these assets well, why sell them?\"
\ncompany spokesman Ridwan Nyak Baik said.<\/p>\n
But the government has insisted that Pertamina focus on
\nimproving its competitiveness purely in the oil and gas sector to
\nallow it to compete with foreign players once the sector is fully
\nopen to free competition. The government has said that the
\nproceeds from the sale of the noncore assets should be used to
\nupgrade Pertamina's core operation.<\/p>\n
One analyst said that the restructuring of Pertamina's
\noperation, including the sale of its noncore businesses and
\ncreating a completely new corporate culture, was important if
\nPertamina wanted to compete with foreign companies.<\/p>\n
Elsewhere, Winakun said that the divestment of the noncore
\nassets would not create massive unemployment. He did not provide
\ndetails.<\/p>\n
Turning Pertamina into a limited liability company is a
\nconsequence of the enactment of Law No. 22\/2001 on oil and gas
\nthat terminates Pertamina's decades long regulatory role.<\/p>\n
The law will also end Pertamina's monopoly in the upstream oil
\nand natural gas industry -- exploration, mining and refining --
\nby this year, and in the distribution of oil products by 2005.<\/p>\n
The new law is expected to help boost investment in the
\ncountry's oil and gas sector, which is essential to avoid the
\ncountry from becoming a net oil importer by 2010 as many have
\npredicted.<\/p>\n
Last year, the government set up the Upstream Oil and Gas
\nImplementing Body (BP Migas) to take over Pertamina's regulatory
\nrole in the upstream sector.<\/p>\n
In the downstream sector, a separate body called the
\nDownstream Regulatory Agency will assume Pertamina's role.<\/p>\n
Pertamina's key noncore assets: PT Rumah Sakit Pusat Pertamina
\n(hospital), PT Patra Jasa (hotels and restaurants), PT Pelita Air
\nService (air transportation), PT Patra Dok Dumai (shipping docks),
\n PT Tugu Pratama (oil and gas insurance), PT Pertamina Tongkang
\n(small vessels provider).<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-to-change-status-sell-profitable-noncore-assets-1447893297",
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"sponsor": "Okusi Associates",
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