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