End of Pertamina's glory?

End of Pertamina's glory?

Pertamina, a state-owned company that has frequently entered the public spotlight, no longer enjoys the right to handle oil and gas contracts. This marks a new chapter for the company. Later on, these oil and gas contracts will be handled by a special executive agency that the government will set up.

The issuance of Government Regulation No. 42/2002 on the executive agency for upstream natural oil and gas business activities this week, also means that Pertamina no longer enjoys the right to appoint sellers of the government's portion of natural oil and gas from production-sharing contracts.

With this change in status, Pertamina's rights and obligations are the same as other domestic and foreign companies dealing in natural oil and gas in Indonesia. It this its 44th year of existence, Pertamina is planning to become publicly listed.

With its loss of authority to sign oil and gas contracts, Pertamina will be a pure state-owned company, just like other state-owned limited liability companies. Does this mean the end of Pertamina's glory? Of course not.

The removal of this monopoly from the hands of Pertamina will surely encourage foreign oil and gas companies to enter the domestic market, with its population of 210 million people. They certainly do not want to miss this huge potential market in the southern hemisphere.

For Pertamina, this is a new challenge. Having dominated the domestic market for dozens of years, Pertamina certainly does not wish to lose its market share. So it must do all it can to win the competition, or else it will be just a spectator on its own turf.

-- Bisnis Indonesia