T
he government has cut the board of directors of state-owned oil and gas giant Pertamina from 11 positions to six, a leaked document shows, in a continued campaign to slim down national enterprises.
State-Owned Enterprises (SOE) Minister Erick Thohir confirmed the move, saying the restructuring was aimed at refocusing the board’s role to focus on corporate management affairs such as finance and human capital, instead of operations.
“The overall plan has been consistent. We want all SOEs to focus on their core businesses,” Erick said during a press conference on Friday.
The restructuring, he continued, was expected to improve Pertamina’s business performance, which he said could be measured through, among other indicators, increased upstream oil and gas production and lower fuel distribution costs.
Nicke Widyawati, Emma Sri Martini and Koeshartanto retained their positions as president director, finance director and human capital director, respectively. The former logistics, supply chain and infrastructure director, Mulyono, and asset management director M. Haryo Yunianto were appointed as the integrated logistics and infrastructure director and corporate services director, respectively.
The remaining director positions for upstream operations, refining, corporate marketing, retail marketing, petrochemical, megaprojects, investment and risk management have been scrapped.
Iman Rachman, the former president director of state asset management firm PT Perusahaan Pengelola Aset (PPA), is the only newcomer to Pertamina’s board of directors. Iman has experience in listed companies, Erick said.
The board of commissioners, which includes former Jakarta governor Basuki “Ahok” Tjahaja Purnama, remains unchanged, according to the document.
Pertamina is the latest in a series of SOEs to have its board of directors restructured to improve efficiency at the behest of the ministry. Last month, the SOE Ministry restructured 14 national plantation firms to consolidate PT Perkebunan Nusantara III (PTPN) as the holding company of the firms.
Similar to Pertamina’s restructuring, PTPN III will focus on corporate management while its subsidiaries will focus on producing various crops, such as palm oil, natural rubber and cocoa.
Erick said that, going forward, Pertamina’s subsidiaries would also be grouped into specialized subholdings. He also expects two subholdings to be listed on the Indonesia Stock Exchange (IDX) within the next two years.
“There will be one for upstream, one for marketing and there’s already PGN for gas,” he said, referring to publicly-listed gas distributor PGN, which became the subholding company for all national gas-related firms under Pertamina in late 2018.
Pertamina owns dozens more subsidiaries that operate all along the domestic oil and gas supply chain, including in exploration, refining, distribution and retail. Pertamina even has a subsidiary in property, PT Patra Jasa, and health care, PT Pertamina Bina Medika IHC.
The company expects the new structure to make it more “agile” and “focused” in order to develop “world class capabilities” to become a global-scale energy company with market a value of US$100 billion.
“With the [restructuring], Pertamina’s role as a holding will be directed into portfolio management and facilitating business synergy among all units under Pertamina Group, speeding up new business development and executing national programs,” reads a statement from the company published on Friday.
“Meanwhile, subholding companies will perform the role of supporting operational excellence by developing their respective scales and synergy, speeding up business development and increasing their capabilities and flexibility in partnerships and funding.”
Pertamina president director Nicke Widyawati said in April that the company would liquidate and divest its stakes in 25 direct and indirect subsidiaries to focus more on its core business.
“We plan to liquidate and divest our stakes in eight subsidiaries this year and the rest next year,” she said, adding that many of the subsidiaries were no longer operational.
