Pertamina to turn its upstream division into holding company

State owned oil and gas company Pertamina will operate three holding companies beginning November, this year, Neraca reported on Monday.

Pertamina?s spokesman Ridwan Nyak Baik said in Jakarta last week that one of the holding companies will oversee all the upstream operations, which are now directly handled by the company?s upstream division. The other two holding companies will oversee the company?s downstream operations and strategic investment, respectively.

?Pertamina has held a leadership meeting to discuss the business units which will be directly under the upstream holding firm,? he was quoted by the daily as saying.

One business unit to be established under the planned upstream holding firm is PT Pertamina Geothermal Indonesia (PGI) which will handle all Pertamina's geothermal business.

"The new business unit will be established in April, this year," Ridwan said.

In the middle of last month, Pertamina signed a memorandum of understandings with Japan?s Marubeni Corporation and the Philippine National Oil Company (PNOC) to cooperate in the development of geothermal energy. Pertamina is preparing the construction of three geothermal plants, respectively in Ulubelu, Lampung, with a capacity of 110 Megawatt (MW), in Bumi Balai, South Sumatra, with a capacity 330 MW and in Tompase Lahedong in North Sulawesi, with a capacity of 60 MW. The geothermal power plants are scheduled for operations in 2007.

Pertamina?s upstream division recently announced the finding of crude oil reserves of about 424 million barrels and gas deposits of 3.34 trillion cubic feet. The oil was mostly discovered in the company?s concession areas in Pondok Tengah, Bekasi, West Java, while the gas was discovered in Randublatung, Blora, Central Java.

The new finding is expected to increase Pertamina?s crude oil production by 140,000 barrels per day. (*)