State gas company PT Perusahaan Gas Negara (PGN) has appointed Gigih Prakoso its new president director as part of the company’s move toward its integration with Pertagas, a subsidiary of state energy company Pertamina specializing in the gas business.

Gigih, a former director of investment planning and risk management at Pertamina, is replacing Jobi Triananda Hasjim, who helped PGN book a profit in the first half of this year.

The reshuffle took place on Monday through an extraordinary general shareholders meeting (RUPSLB), which saw the approval of 76.9 percent of PGN shareholders.

“The decision to replace Jobi Triananda Hasjim with Gigih Prakoso won the acclamation of the shareholders,” PGN secretary Rachmat Hutama said in a press briefing.

Of the five directors in PGN, only the president director was replaced, while the commercial, general and human resources, infrastructure and technology, and finance directors remain the same.

PGN director of infrastructure and technology Dilo Seno Widagdo said at the same event that the decision to replace the president director would not hamper the integration process given the fact that Gigih of Pertamina has been in the team in charge of the integration for some time.

“He [Gigih] knows our discussions on integration in terms of infrastructure, communication, vision and mission. Hence, I believe that he will commit to implementing the integration blueprint,” he said. Dilo was referring to the integration of PGN and Pertamina’s gas subsidiary Pertagas, which has been seen as the final phase in Pertamina fully becoming an oil and gas holding firm.

However, the integration between the two state gas companies is currently pending the finalization of the acquisition of 51 percent of Pertagas, the value of which is estimated at US$1.2 billion. For the takeover, PGN plans to seek half of the funding from foreign loans, whilst the rest will be from internal cash reserves.

Becoming the major owner of Pertagas, which is under a conditional sale and purchase agreement (CSPA), will be finalized no later than Sept. 29, said PGN finance director Said Reza Pahlevi.

“We will also revise our capital expenditure [capex] soon after the payment of the CSPA has been made,” he said, referring to the efficiency measures of reducing duplicate investments.

Newly elected PGN president director Gigih could not be reached for comment regarding his appointment as the new chief.

Speaking after the reshuffle, Jobi the former PGN president director said “my job at PGN is over and in the future I am ready to be placed in another assignment anywhere for my country”.

PGN posted revenues of $1.62 billion in the first half of 2018 and its net profits reached $145.94 million on the assumption of Rp 13,765 per US dollar.

The net profits were 191.8 percent higher than the same period last year, when PGN made net profits of $50 million.

“The biggest contribution to net profits in the first half of 2018 came from natural gas distribution revenues at $1.27 billion and oil and gas sales at $308 million,” read a PGN official statement regarding its 2018 first-half financial performance.

Rachmat of PGN said the number of PGN natural gas customers had increased 16.96 percent to 203,151 in the first half of 2018 compared to 173,681 customers in the same period last year.

According to PGN data, its customers are in North Sumatra, Riau Islands, Riau, South Sumatra, Lampung, DKI Jakarta, West Java, Banten, Central Java, East Java, North Kalimantan and Sorong in Papua.

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