TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Pertagas worker union questions acquisition plan
Hundreds of state-owned energy firm Pertamina subsidiary PT Pertamina Gas’ (Pertagas) workers continue to question state gas distributor Perusahaan Gas Negara’s (PGN) plan to acquire Pertagas
Change Size
H
undreds of state-owned energy firm Pertamina subsidiary PT Pertamina Gas’ (Pertagas) workers continue to question state gas distributor Perusahaan Gas Negara’s (PGN) plan to acquire Pertagas.
The Pertamina Gas Worker Union (SPPG) has protested the planned acquisition for more than a month, installing banners at Pertamina’s headquarters in Central Jakarta and its offices across the country conveying their concerns.
One banner observed by The Jakarta Post read, “We fight any measures that stunts Pertagas in the oil and gas holding!”
SPPG chairman Nugeraha Junaedy said workers would continue to protest until Pertamina explained why the acquisition was necessary. “As [both companies] would already be [under Pertamina], what is the urgency for PGN to acquire Pertagas? Besides, the two firms have collaborated even before the holding plan existed,” Nugeraha told the Post recently.
One example, he said, was the Duri-Dumai transmission pipeline in Riau, which spans 67 kilometers and transports about 140 million metric standard cubic feet of gas per day (mmscfd).
Nugeraha stressed that the workers were not against the establishment of an oil and gas holding, saying that they agreed it was a way to improve efficiency in the sector.
However, they argued that the acquisition scheme would increase Pertamina’s financial burden as PGN was currently not in a financially healthy state.
The Indonesian Resources Studies (IRESS) recorded that PGN’s net profit had slumped from US$891 million in 2012 to $147 million in 2017, an 84 percent drop.
“It is better to solve PGN’s financial [condition] first [before proceeding] to discuss how to maximize combining the two firms’ infrastructure,” Nugeraha said.
He added that one of the urgent matters was to map out new locations that needed gas distribution, which are mainly cities in eastern Indonesia.
PGN operates about 7,450 km in transmission pipelines or about 80 percent of Indonesia’s overall downstream gas pipelines. Pertagas operates 2,085 km.
Since the establishment of the oil and gas holding in January, Nugeraha said the integration process had not reached 50 percent of its total potential.
“The talks have mainly been about the acquisition scheme rather than [how to maximize the integration of the two firms],” he added.
Commenting on the matter, a state-owned enterprises (SOEs) expert from the University of Indonesia (UI), Toto Pranoto, said the government could choose another option to integrate Pertagas and PGN if the acquisition proved to be a hassle.
He added that integration could work in an asset transfer scheme, known as inbreng, which was used to establish Pertamina as the holding firm.
“The mechanism for integration could have several options, but the integration is non-negotiable as it is needed to create confidence [in toil and gas holding] in the market,” Toto said.
Previously, the State-Owned Enterprises Ministry’s undersecretary for mining, strategic industries and media affairs, Fajar Harry Sampurno, said the acquisition of Pertagas would be completed before June 29.
“[The valuation of Pertagas] is done […] we will disclose it no later than June 29 through an acquisition scheme with the funding from PGN’s cash flow or from a loan,” he added without disclosing the value.
The workers are scheduled to meet with Pertamina’s top management by the end of this month.
SPPG’s Nugeraha said the workers wanted a solid explanation about the planned acquisition. “We will demand that they halt any corporate action, but if they can make us understand that it [the acquisition] is urgent, why not?”
