In 1957, Royal Dutch/Shell's assets in Indonesia (trading as Bataafse Petroleum Maatschappij) were nationalised, from which Permina was founded as a state-owned oil monopoly, headed by Lieutenant-General Ibnu Sutowo.[5] Sutowo's position as the second deputy of Abdul Haris Nasution was the beginning of the armed forces' involvement in the oil industry.[6] 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. In 1962, the company went on to establish the Oil Academy in Bandung. The academy's curriculum covered the technical aspects of the petroleum industry, and the graduates became the main source of labor for Permina (which was renamed Pertamin in 1961).
In 1960, the Provisional People's Consultative Assembly adopted a policy that oil and gas extraction could only be carried out by the state, through a state-administered company. Pertamin 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 refinery manufactures and other assets in marketing and distribution were to be sold to Indonesia within five to fifteen years.
In 1968, to consolidate the 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 1974 oil price increases produced revenues of USD 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.[8] Pertamina built the Bina Graha, the presidential executive office building in Jakarta.[9] The global oil crisis of the 1970s greatly increased oil prices and thus Pertamina's profits. The company 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 was "an ongoing source of funding" without accountability. "They ran this cash-cow into the ground, using it for both military and personal ends."[10] 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.[11]
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 accumulating losses. In February 1975, Pertamina could no longer pay its American and Canadian creditors.[12] An investigation followed, which revealed over US$10 billion in debts, mismanagement, and corruption within the company. This debt was equivalent to approximately thirty per cent of Indonesia's GNP at the time.[13] Others offer a figure of a $15 billion debt.[14] A public investigation damaged the reputation of the national elite both among Indonesians and foreigners.
However, charges against Ibnu Sutowo were dismissed and he and his family remained among the richest and most powerful in Indonesia, into the 21st century.[10] The government took over the operation of the company and sought means by which to repay its debts.[9] Pertamina's debt problems were eventually solved through a large government bail-out, which nearly doubled Indonesia's foreign debt.[13]
Since the 1980s
Human rights observers have long expressed concerns about Indonesia's hostility to labour 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 permanently banned 19 years earlier when Suharto took power."[15]
To execute a clause in the 2001 Oil and Natural Gas Act, 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 a Cooperation Contract with the Oil and Gas Regulatory Body. With its transformation into a limited company, Pertamina has become a business entity with the main target of making a profit.
President directors
During the 1970s, until 1976, the president director of Pertamina was Ibnu Sutowo, a well-known figure in Indonesia. Since then, there have been a number of president directors. Recent president directors have included the following:
No
Name
Term of office
Remarks
Start
End
1
Soegijanto
1996
1998
2
Martiono Hadianto
1998
2000
Before his appointment as president director of Pertamina, Martiono was briefly Finance Director of the state-owned airline company Garuda Indonesia[16]
3
Baihaki Hakim
2000
2003
Baihaki was formerly president of Chevron Texaco's subsidiary in Indonesia PT Caltex Pacific Indonesia. He was appointed as president director of Pertamina by the president Abdurrahman Wahid in 2000. Subsequent to his resignation in 2003, there was controversy surrounding decisions taken in Pertamina during his period as president director concerning the purchase of giant tankers for the transport of oil.[17]
4
Ariffi Nawawi
2003
2004
5
Widya Purnama
2004
2006
Widya Purnama was appointed from outside of the energy sector, formerly having been president (since 2002) of the Indonesian telecommunications company PT Indosat.
In February 2009 it was announced that Karen Agustiawan would become president director of Pertamina for a five-year term.[18] Her appointment was extended in 2013.[19] She resigned for unannounced reasons in August 2014. It was said at the time that she had plans to teach in Harvard University in the United States.[20]
8
Dwi Soetjipto
2014
2017
In November 2014, the new president of Indonesia Joko Widodo announced a major reorganisation of the board of Pertamina as part of a series of reform measures for the energy sector. A new president director, Dwi Soetjipto, was appointed along with a number of new members to the board. The appointment of Dwi Soetjipto, previously president director of the major state-owned cement firm PT Semen Indonesia, attracted media attention because unlike most previous president directors of Pertamina, he had little previous experience in the oil sector.[21]
9
Elia Massa Manik
2017
2018
In March 2017, after Soetjipto was dismissed due to leadership issues, the Board appointed Manik who had served as president director of Elnusa, a Pertamina subsidiary, from 2011 to 2014. He then spent a period as the CEO of PT Perkebunan Nusantara (PTPN) III, the holding company of 14 state-owned agriculture firms.[22]
10
Nicke Widyawati
2018
present
In late August 2018, it was announced that president Jokowi had decided that Nicke Widyawati, who had been acting president director since March, would be confirmed in the position of head of Pertamina. The decision was announced at a press conference in the Ministry for State-Owned Enterprises on 29 August.[23]
Facilities
Refineries
Pertamina has not built any new refineries since the Balongan refinery was opened in West Java in the mid-1990s.[24]
PTT Public Company Limited and Pertamina signed into partnership to build a new petrochemical complex in Indonesia for an estimated cost of US $4 to 5 billion.[25]
As of 2013, Pertamina operates six oil refineries which have a total combined capacity of around 1 million barrels (160 thousand cubic metres) of oil per day:[26]
Source: Indonesian Ministry of Energy and Resources, 2012 Handbook of Energy and Economic Statistics of Indonesia.
(Note: By world standards, none of Indonesia's refineries are large. The world's largest refinery, at Jamnagar in India, has a production capacity of over 1,200,000 barrels (190,000 cubic metres) per day. As a rule of thumb, refineries need to produce at least 200,000 bbl (32,000 m3) per day to reach reasonable international standards of efficiency.)[27]
There are several other refineries in Indonesia which Pertamina has responsibilities for:
In addition to the refineries which Pertamina owns, Pertamina has invested in two operating companies that manage output from LNG plants.
PT Badak LNG operates a plant in Bontang, East Kalimantan, with 8 trains having a total capacity of 22.5 million tons per annum.
PT Donggi Senoro LNG in Uso Village, Batui Subdistrict, Banggai Regency, Central Sulawesi Province, with 1 train with a capacity of 2 million tons per annum.[29]
Pertamina also invested in the PT Arun 6 LNG trains near Lhokseumawe, Aceh, which had a total capacity of 12.5 million tons per annum. They closed down due to a lack of feed gas in 2014, and now Arun has used an LNG import terminal.[30]
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 barrels (48,000 cubic metres) per day, perhaps in Balongan, West Java (or, alternatively, in Bontang, East Kalimantan) and in Tuban, East Java. The first facility was planned to be built by Pertamina in partnership with Kuwait Petroleum, while the second was expected to be built by Pertamina in co-operation with Saudi Aramco. Total investment was expected to be around $20 billion.[31] One main problem holding up an agreement to build the refineries was the issue of financial concessions to be provided for the foreign investors.[32] Eventually, in September 2013 it was announced that the plans for the first 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.[33] Pending further progress on these large investment plans, Pertamina has announced (late 2014) plans to upgrade the existing refineries so as to add around 500,000 bbl (79,000 m3) per day to Pertamina's current refining capacity of around 1 million bbl (160 thousand m3) per day.[34]
Pertamina also has two gas reserves and a petrochemical company. Pertamina's products include a great variety of fuels, chemicals, additives, and retail products.
Gas station
Pertamina has the largest distribution network for petroleum products (gas stations, etc.) in Indonesia.[citation needed]
Bright Convenience Store
Along with the gas stations, Pertamina also has a convenience store chain, integrated with their gas stations. The development of Bright convenience stores and cafes is self-governed by PT Pertamina Retail.[35]
PT Pertamina EP (PEP) is engaged in exploration. PEP has also been undertaking other supporting businesses, which have been intended to back up the main business directly or indirectly.
Pertamina EP Working Areas of 140.000 km2 were once largely PT Pertamina (Persero)’s Oil and Gas Mining Authority Zone. The working areas are managed through its own operation and partnership co-operation.
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, Tambun, Subang and Jatibarang in Asset 3, Cepu in Asset 4 as well as Sangatta, Sangasanga, Bunyu, Tarakan, Tanjung and Papua in Asset 5.
Besides the management of working areas as stated earlier, other business patterns include 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.
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 permits 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 owns 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 co-operation 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.
Pertamina Internasional EP
Pertamina Internasional Eksplorasi dan Produksi (PIEP) is established on 18 November 2013, based on the need for international asset management that is focused on overseas assets of PT Pertamina (Persero).[37]
Pertamina EP Cepu ADK
PT Pertamina EP Cepu ADK hereinafter referred to as PEPC ADK was established on 15 August 2013 in order to manage Fields of Alas Dara and Kemuning (ADK). Following the prevailing rules and legislation in the Ministry of Energy and Mineral Resources, the PSC between SKKMigas and PEPC ADK was signed on 26 February 2014. PEPC ADK is the operator of Alas Dara and Kemuning, located in Blora, Central Java, which was previously operated by Mobil Cepu Ltd. (MCL). In line with the commitment to the Government, PEPC ADK shall conduct Well Re-entry, Perform G&G Study, GGR Study, and exploration drilling. Since established, the PEPC ADK has never changed its name.[38]
ConocoPhillips Algeria Ltd
ConocoPhillips Algeria Ltd. owns three onshore oil fields. The company is based in Algeria. As of 27 November 2013, ConocoPhillips Algeria Ltd. operates as a subsidiary of PT Pertamina (Persero).[39]
From 2005 until 2007 Pertamina became the main sponsor for Doni Tata Pradita in Yamaha Team who raced in the MotoGP 125cc and 250cc class wildcard entry in Malaysian motorcycle Grand Prix. The partnership was extended to full 2008 season, with Pradita scored a single point in China.
Then starting the 2021 season, Pertamina collaborated with the Mandalika Racing Team and SAG Team to compete both in Moto2 World Championship and the CEV Moto2 Championship.
Rio Haryanto, Indonesia's first Formula One driver, was sponsored by Pertamina throughout his junior career and played a role in securing his drive with the Manor Racing team in 2016. However, Pertamina ended their sponsorship with Manor halfway through the season as Haryanto was demoted to reserve driver due to lack of funding.[42]
Since 2016 Pertamina has also supported Indonesian driver Sean Gelael, with its brandings prominently featured in his race cars ever since.
Pertamina also sponsored the Italian automotive manufacturer Lamborghini since 2015 as an official global lubricant partner, which also extended to Lamborghini Super Trofeo as title sponsor.
^Useful details about the history of Pertamina are contained in the book about Pertamina by Rhenald Kasali, DNA mutation of a powerhouse: Pertamina on the move, PT Gramedia Pustaka Utama, Jakarta, 2008
^"Archived copy". Archived from the original on 14 December 2010. Retrieved 29 January 2011.((cite web)): CS1 maint: archived copy as title (link) Pertamina Products
^Formerly an abbreviation of Perusahaan Negara Pertambangan Minyak dan Gas Bumi Nasional (lit. 'National Oil and Natural Gas Mining State Corporation') between 1968 and 31 December 1971 and Perusahaan Pertambangan Minyak dan Gas Bumi Negara (lit. 'State Oil and Natural Gas Mining Company') between 1 January 1972 and 2003
US$ 57 billion (2021)[1]
US$ 4.1 billion (2020)[1]
