Pertamina to form eight subsidiaries to operate its oil and gas fields

The state owned oil and gas company Pertamina will establish at least eight subsidiaries later this year to operate the company's oil and gas fields in the country as part of its program to fully operate as a profit-oriented corporation, Investor Daily reported on Monday.

Pertamina's corporate secretary Sudrajat said in Jakarta last week that six subsidiaries would be formed this year to take over oil and gas exploration activities in Nanggroe Aceh and North Sumatra, South Sumatra, West Java , East Java , East Kalimantan and Papua.

In addition, Pertamina will also form several other subsidiaries to operate its oil blocks including, the Matindok oil block in South Sulawesi, the Rantu Guntingan block in Central Java, he said.

"Pertamina will also form a holding company to oversee all activities of the subsidiaries in the upstream sector. We hope the holding company can be established on Sept. 17 at the latest," he was quoted as saying.

Under the new oil and gas law, Pertamina should be transformed into a full business entity and the change in its business orientation should be made within two years after the issuance of the law in 2001. Pertamina previously operated under a special law and received a number of exclusive rights and monopoly both in upstream and downstream activities.

Sudradjat said that Pertamina and BP Migas, the government's regulatory body in oil and gas exploration and production activities, were still negotiating the change in the term of oil and gas contracts to comply with the company's new business orientation.

According to Sudradjat, a holding company in downstream activities would be established on Nov. 23 at the latest. This holding company will also oversee a number of subsidiaries. (*)