Pertamina plans IPO for three units by 2013

State energy company PT Pertamina said late on Thursday that it planned to list three of its units on the Indonesia Stock Exchange by 2013 to help them expand and increase transparency in the parent company, long accused of being a cash cow for politicians.

Pertamina currently owns six companies in the upstream sector, which covers exploration and the production of oil, gas and geothermal energy

?We plan to conduct initial public offerings for three of Pertamina?s upstream subsidiaries in 2013,? said Karen Agustiawan, Pertamina?s president director. ?The subsidiaries are PT Pertagas, PT Pertamina Drilling Services and PT Pertamina Hulu Energi?

Karen said the three companies had been chosen because they offered drilling and exploration, support services, and the natural gas business all of which had extremely good prospects, with more oil and gas fields expected to come online in the next few years.

?I hope Pertagas could grow in line with PT Perusahaan Gas Negara, the state gas operator,? Karen said, adding that the three companies were free of debt to the government and Pertamina.

Karen said the parent company could not go public until the govermnent?s fuel subsidy scheme was lifted, but vowed it would meet the financial reporting requirements of a listed company by 2010.

"We need to sustain the company?s transformation from the ?old style, bad management? to a more open company by pushing good corporate governance principles,? she said.

Pertamina Driling Services is currently managing 26 rigs across the archipelago as well as providing drilling services, while Pertagas takes care of Pertamina?s gas business.

Pertamina Hulu Energi oversees and develops domestic and international oil and gas resources through partnerships with other companies.

Suharyanto, Pertagas?s president director, confirmed that the company had been told about the plan to go public by its parent. ?There have not been any official letters yet, but Pertamina has formally told us to be ready for an IPO in 2013,? Suharyanto said.

A public listing would help Pertagas finish a pipeline connecting East and West Java and Madura Island.

?We forecast that we could triple our profit when the pipeline project is finished,? Suharyanto said, referring to the lucrative industrial market on the island.

He said national demand for gas was high and the company could not meet demand. ?We are still under committed in various contracts?. (*)