The Jakarta Post
President Joko “Jokowi” Widodo has signed the long-awaited Government Regulation (PP) No. 6/2018 on additional state capital injection for state-owned energy giant Pertamina that serves as the legal basis to transform the company into an oil and gas holding firm.
The regulation, which was enacted into law at the end of February but had only been obtained by the press on Friday, formalizes the government’s decision to transfer its 57 percent stake in gas distributor PT Perusahaan Gas Negara (PGN) in the form of Series B shares to Pertamina.
However, the government still has one Series A shares in PGN, through which it still has a veto right regarding any of the company’s corporate actions.
“With the transfer of the Series B shares, the state takes control of PT Perusahaan Gas Negara through the possession of the two-color Series A share,” the PP No. 6/2018 states.
Fajar Harry Sampurno, the State-Owned Enterprise (SOE) Ministry's undersecretary for mining, strategic industries and media affairs, previously said Pertamina would immediately hold an extraordinary general shareholders meeting and conclude its transformation after the PP had been signed by Jokowi.
Under the restructuring plan, PGN will be consolidated with Pertamina gas subsidiary PT Pertamina Gas (Pertagas), a move that will pave the way for the former to become the subholding firm overseeing the midstream to downstream gas business.
As of last year, PGN operated gas transmission and distribution pipelines spanning 7,435 kilometers, or 76 percent of the country’s overall downstream gas pipelines. Meanwhile, Pertagas operated 2,085-km transmission pipelines. (bbn)