SOE Ministry slashes Pertamina’s plank of directors to refocus business

The government has slice the board of directors of state-owned coal and oil giant Pertamina from 11 positions to six, a leaked document shows, in a continued campaign to lose fat national enterprises.

State-Owned Enterprises (SOE) Minister Erick Thohir verified the move, saying the restructuring was targeted at refocusing the board’s role to concentrate on corporate management affairs such as finance and individual capital, rather than operations.

“The entire plan has been consistent. We wish all SOEs to focus on their main businesses,” Erick said during a press meeting on Friday.

The restructuring, he continued, was expected to improve Pertamina’s business performance, which he said could possibly be measured through, among additional indicators, increased upstream coal and oil production and lower fuel distribution costs.

Nicke Widyawati, Emma Sri Martini and Koeshartanto retained their positions as president director, finance director and human being capital director, respectively. The former logistics, source chain and infrastructure director, Mulyono, and asset supervision director M. Haryo Yunianto had been appointed as the included logistics and infrastructure director and corporate companies director, respectively.

The rest of the director positions for upstream operations, refining, corporate advertising, retail advertising, petrochemical, megaprojects, investment and risk management have been scrapped.

Iman Rachman, the ex - president director of condition asset management organization PT Perusahaan Pengelola Aset (PPA), may be the sole newcomer to Pertamina’s plank of directors. Iman provides experience in listed corporations, Erick said.

The board of commissioners, which include former Jakarta governor Basuki “Ahok” Tjahaja Purnama, remains unchanged, in line with the document.

Pertamina may be the latest in a series of SOEs to have it is table of directors restructured to boost efficiency in the behest of the ministry. Previous month, the SOE Ministry restructured 14 national plantation companies to consolidate PT Perkebunan Nusantara III (PTPN) as the holding company of the firms. 

Equivalent to Pertamina’s restructuring, PTPN III will concentrate on corporate management even while its subsidiaries will focus on producing many crops, such as for example palm oil, all natural rubber and cocoa. 

Erick said that, in the years ahead, Pertamina’s subsidiaries would also come to be grouped into specialized subholdings. He also expects two subholdings to get stated on the Indonesia STOCK MARKET (IDX) next two years.

“There will be one for upstream, one for marketing and there’s previously PGN for gas,” he said, discussing publicly-listed gas distributor PGN, which became the subholding company for all national gas-related businesses under Pertamina in later 2018.

Pertamina owns dozens considerably more subsidiaries that operate all along the household oil and gas supply chain, including in exploration, refining, distribution and retail. Pertamina even includes a subsidiary in real estate, PT Patra Jasa, and health care, PT Pertamina Bina Medika IHC.

The company expects the brand new structure to make it more “agile” and “focused” as a way to develop “world class capabilities” to become global-scale energy company with industry a value of US$100 billion.

“With the [restructuring], Pertamina’s purpose as a holding will be directed into portfolio management and facilitating business synergy among all units under Pertamina Group, speeding up new business expansion and executing national programs,” reads a statement from the business published on Friday.

“Meanwhile, subholding companies can perform the position of helping operational excellence by growing their respective scales and synergy, accelerating business advancement and increasing their features and versatility in partnerships and financing.”

Pertamina president director Nicke Widyawati said found in April that the company would liquidate and divest its stakes found in 25 direct and indirect subsidiaries to focus more on its primary business.

“We intend to liquidate and divest our stakes in eight subsidiaries this season and the others next 12 months,” she explained, adding that lots of of the subsidiaries were no longer operational.