Pertamina
Encyclopedia
Pertamina is an Indonesia
n government-owned corporation
which extracts and refines the country's oil and gas reserves. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of Liquefied Natural Gas (LNG).
. Ibnu Sutowo's position as the second deputy of Abdul Haris Nasution
was the beginning of the army's involvement in the oil industry. Permina distributed oil for the entire archipelago.
Permina founded the Apprentice Technical School (Sekolah Kader Teknik) in Brandan to train and produce experts in the field. To meet this goal Permina established the Oil Academy in Bandung
at 1962. Oil Academy's curriculum pertains to the technical aspects of the oil industry, and the graduates turned into the main forces in Pertamin (which later transformed to Pertamina).
In 1960, the Congress enacted a policy that the mining of Indonesian oil and ground gases are only permitted for the state, through a state-administered company. Pertamin, established in 1961, was responsible for the administration, management and controlling of the exploration and production. The policy was short lived. An agreement between the state and foreign companies was affirmed that gradually, oil refinement
manufactures and other assets in marketing and distribution were to be sold to Indonesia within five to fifteen years.
In 1968, to consolidate oil and gas industry for its management, exploration, marketing and distribution, Permina and Pertamin merged and became PN. Pertamina. It continued to do little drilling itself, but made production-sharing agreements with foreign companies.
and Stanvac to produce the rest (67.8% and 3.6%, respectively). Its assets included seven refineries
, oil terminals, 116 tankers
, 102 other vessels and an airline. It was also active in cement
, fertilizer
, liquid natural gas, steel
, hospital
s, real estate
, a rice
estate, and telecommunications.
The 1974 oil price increases produced revenues of $4.2 billion in that year, equivalent to approximately one sixth of Indonesia's gross domestic product. Much of this revenue was used by Sutowo to expand Pertamina's interests far beyond oil production to include investments in oil tankers, steel and construction. Pertamina built the Bina Graha, the presidential executive office building in Jakarta
. The global oil crisis of the 1970s greatly increased oil prices and profits. Pertamina initially provided a fiscal lift to the hopes of Indonesia's development planners
.
For President Suharto and other members of the ruling elite, revenue from Pertamina "an ongoing source of funding" without accountability: "they ran this cash-cow into the ground, using it for both military and personal ends." Historian Adrian Vickers describes the endemic corruption at Pertamina:
In 1973, the government's ability to borrow money from overseas was constrained, and Pertamina was no longer providing revenues to the state. Instead, the massive enterprise turned out not to be making money, but compiling exponentially large losses. In February 1975, Pertamina could no longer pay its American and Canadian creditors. An investigation followed, which revealed over US$10 billion in debts, mismanagement, and corruption within the company. This debt was equivalent to approximately thirty percent of Indonesia's GNP
at the time. Others offer a figure of a $15 billion debt. A public investigation hurt the reputation of the national elite both among Indonesians and foreigners. The man most responsible for the collapse, Ibnu Sutowo
, was eventually dismissed. He and his family were among the richest and most powerful in Indonesia, into the 21st century. The government took over the operation of the company and sought means by which to repay its debts. Pertamina's debt problems were eventually solved through a large government bail-out, which nearly doubled Indonesia's foreign debt.
In the 1980s, major partnerships with American and French firms produced vast quantities of petroleum. Caltex
, a joint Chevron
-Texaco
company, and Total S.A.
were some of the largest foreign players.
Human rights observers have long expressed concerns about Indonesia's hostility to labor unions. According to the Multinational Monitor
: "In 1985, the government ordered the firing of over 1,600 workers at Pertamina and foreign oil companies, charging that they had been members of the Indonesian Communist Party
, which had been banned 19 years earlier when Suharto took power."
In 2003 Pertamina legally became PT. Pertamina (Persero), as per the enactment of Government Regulation No.31/2003. Pertamina is now under the coordinator of the State Minister of State-owned Enterprises.
Like other contractors, Pertamina holds Cooperation Contract to Oil and Gas Regulatory Body. With its transformation into a limited liability company
, Pertamina has become a business entity with the main target of making a profit.
which have a capacity of 1,041.2 thousand barrels (Refinery Unit (RU) II in Dumai, RU III in Plaju, RU IV in Cilacap, RU V in Balikpapan, RU VI in Balongan, and RU VII in Kasim/Sorong), two gas reserves with a capacity of 31 tons per year, and a petrochemical company. Pertamina's products include a great variety of fuels, chemicals, additives, and retail products.
In the gas transmission business, Pertamina owns a gas pipeline network with a total volume of 34,000 km-inches in Northern Sumatra, Central Sumatra, Southern Sumatra, Western Java, Eastern Java
, and East Kalimantan
In January 2009, PT Pertamina Gas obtained a Transportation Permit and in February 2009, it received an exclusive right from BPH Migas for gas
transportation along 43 transmission routes. These permit and exclusive rights complemented the business permit that had been issued previously (in September 2008). By obtaining a business license and special rights, PT Pertamina Gas now has a regulatory basis to play the principal role in the gas business in Indonesia.
The services provided comprise drilling, workover activities, and drilling services that use a Daily Rate and Integrated Drilling Management (MPT) system for oil, gas, and geothermal wells.
Presently, PT PDSI owned 34 drilling rigs (28 owned by PT PDSI and 6 transferred from PT Usayana)
Fuel (BBM)
Fuel Products:
Special Fuel
Special Fuel products :
Non-Fuel (Non-BBM)
Non Fuel Products :
Gas
Petrochemical
Numbers of PERTAMINA’s Petrochemical Products.
Lube Base Oil
Provides information of PERTAMINA’s Lube Base Oil Products based on their function:
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
n government-owned corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
which extracts and refines the country's oil and gas reserves. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of Liquefied Natural Gas (LNG).
Nationalization
In 1957, Dutch assets in petroleum were nationalized, from which Permina was founded as a state-owned oil monopoly, headed by Lieutenant-General Ibnu SutowoIbnu Sutowo
Ibnu Muhari was an Indonesian army officer, Cabinet Minister and former head of the Indonesian oil and gas producer Pertamina....
. Ibnu Sutowo's position as the second deputy of Abdul Haris Nasution
Abdul Haris Nasution
In this Indonesian name, the name "Nasution" is a family name, and the person should be referred to by the family name "Nasution".Abdul Haris Nasution was an Indonesian general who was twice appointed Army Chief of Staff and who escaped an assassination attempt during the...
was the beginning of the army's involvement in the oil industry. Permina distributed oil for the entire archipelago.
Permina founded the Apprentice Technical School (Sekolah Kader Teknik) in Brandan to train and produce experts in the field. To meet this goal Permina established the Oil Academy in Bandung
Bandung
Bandung is the capital of West Java province in Indonesia, and the country's third largest city, and 2nd largest metropolitan area in Indonesia, with a population of 7.4 million in 2007. Located 768 metres above sea level, approximately 140 km southeast of Jakarta, Bandung has cooler...
at 1962. Oil Academy's curriculum pertains to the technical aspects of the oil industry, and the graduates turned into the main forces in Pertamin (which later transformed to Pertamina).
In 1960, the Congress enacted a policy that the mining of Indonesian oil and ground gases are only permitted for the state, through a state-administered company. Pertamin, established in 1961, was responsible for the administration, management and controlling of the exploration and production. The policy was short lived. An agreement between the state and foreign companies was affirmed that gradually, oil refinement
Refinement
In formal methods, program refinement is the verifiable transformation of an abstract formal specification into a concrete executable program. Stepwise refinement allows this process to be done in stages...
manufactures and other assets in marketing and distribution were to be sold to Indonesia within five to fifteen years.
In 1968, to consolidate oil and gas industry for its management, exploration, marketing and distribution, Permina and Pertamin merged and became PN. Pertamina. It continued to do little drilling itself, but made production-sharing agreements with foreign companies.
The 1970s
After the merge, Pertamina's production rose considerably (about 15% each in 1968 and 1969, and nearly 20% in 1973). By the end of 1973, it directly produced 28.2% of Indonesia's oil, with agreements of CaltexCaltex
Caltex is a petroleum brand name of Chevron Corporation used in more than 60 countries in the Asia-Pacific region, the Middle East, and southern Africa.-History:...
and Stanvac to produce the rest (67.8% and 3.6%, respectively). Its assets included seven refineries
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
, oil terminals, 116 tankers
Oil tanker
An oil tanker, also known as a petroleum tanker, is a merchant ship designed for the bulk transport of oil. There are two basic types of oil tankers: the crude tanker and the product tanker. Crude tankers move large quantities of unrefined crude oil from its point of extraction to refineries...
, 102 other vessels and an airline. It was also active in cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...
, fertilizer
Fertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
, liquid natural gas, steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
, hospital
Hospital
A hospital is a health care institution providing patient treatment by specialized staff and equipment. Hospitals often, but not always, provide for inpatient care or longer-term patient stays....
s, real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
, a rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
estate, and telecommunications.
The 1974 oil price increases produced revenues of $4.2 billion in that year, equivalent to approximately one sixth of Indonesia's gross domestic product. Much of this revenue was used by Sutowo to expand Pertamina's interests far beyond oil production to include investments in oil tankers, steel and construction. Pertamina built the Bina Graha, the presidential executive office building in Jakarta
Jakarta
Jakarta is the capital and largest city of Indonesia. Officially known as the Special Capital Territory of Jakarta, it is located on the northwest coast of Java, has an area of , and a population of 9,580,000. Jakarta is the country's economic, cultural and political centre...
. The global oil crisis of the 1970s greatly increased oil prices and profits. Pertamina initially provided a fiscal lift to the hopes of Indonesia's development planners
Berkeley Mafia
The Berkeley Mafia was term given to a group of U.S.-educated Indonesian economists whose efforts brought Indonesia back from dire economic conditions and the brink of famine in the mid-1960s. They were appointed in the early stages of the 'New Order' administration. Almost three decades of...
.
For President Suharto and other members of the ruling elite, revenue from Pertamina "an ongoing source of funding" without accountability: "they ran this cash-cow into the ground, using it for both military and personal ends." Historian Adrian Vickers describes the endemic corruption at Pertamina:
At each stage of the transaction chain somebody was getting a percentage... If accidents occurred, as in 1972 when eighty impoverished people died... they could be covered up.
In 1973, the government's ability to borrow money from overseas was constrained, and Pertamina was no longer providing revenues to the state. Instead, the massive enterprise turned out not to be making money, but compiling exponentially large losses. In February 1975, Pertamina could no longer pay its American and Canadian creditors. An investigation followed, which revealed over US$10 billion in debts, mismanagement, and corruption within the company. This debt was equivalent to approximately thirty percent of Indonesia's GNP
GNP
Gross National Product is the market value of all products and services produced in one year by labor and property supplied by the residents of a country...
at the time. Others offer a figure of a $15 billion debt. A public investigation hurt the reputation of the national elite both among Indonesians and foreigners. The man most responsible for the collapse, Ibnu Sutowo
Ibnu Sutowo
Ibnu Muhari was an Indonesian army officer, Cabinet Minister and former head of the Indonesian oil and gas producer Pertamina....
, was eventually dismissed. He and his family were among the richest and most powerful in Indonesia, into the 21st century. The government took over the operation of the company and sought means by which to repay its debts. Pertamina's debt problems were eventually solved through a large government bail-out, which nearly doubled Indonesia's foreign debt.
Since the 1980s
Caltex
Caltex is a petroleum brand name of Chevron Corporation used in more than 60 countries in the Asia-Pacific region, the Middle East, and southern Africa.-History:...
, a joint Chevron
Chevron Corporation
Chevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
-Texaco
Texaco
Texaco is the name of an American oil retail brand. Its flagship product is its fuel "Texaco with Techron". It also owns the Havoline motor oil brand....
company, and Total S.A.
Total S.A.
Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
were some of the largest foreign players.
Human rights observers have long expressed concerns about Indonesia's hostility to labor unions. According to the Multinational Monitor
Multinational Monitor
The Multinational Monitor is a bimonthly magazine founded by Ralph Nader in 1980. It is published by Essential Information. Although its primary focus is on analysis of corporations, it also publishes articles on labor issues and occupational safety and health, the environment, globalization,...
: "In 1985, the government ordered the firing of over 1,600 workers at Pertamina and foreign oil companies, charging that they had been members of the Indonesian Communist Party
Communist Party of Indonesia
The Communist Party of Indonesia was the largest non-ruling communist party in the world prior to being crushed in 1965 and banned the following year.-Forerunners:...
, which had been banned 19 years earlier when Suharto took power."
In 2003 Pertamina legally became PT. Pertamina (Persero), as per the enactment of Government Regulation No.31/2003. Pertamina is now under the coordinator of the State Minister of State-owned Enterprises.
Like other contractors, Pertamina holds Cooperation Contract to Oil and Gas Regulatory Body. With its transformation into a limited liability company
Limited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
, Pertamina has become a business entity with the main target of making a profit.
Facilities
Currently Pertamina owns six oil refineriesOil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
which have a capacity of 1,041.2 thousand barrels (Refinery Unit (RU) II in Dumai, RU III in Plaju, RU IV in Cilacap, RU V in Balikpapan, RU VI in Balongan, and RU VII in Kasim/Sorong), two gas reserves with a capacity of 31 tons per year, and a petrochemical company. Pertamina's products include a great variety of fuels, chemicals, additives, and retail products.
Filling stations
Pertamina has by far the largest distribution network of petroleum products (filling stations, etc.) in Indonesia and is familiar to virtually all Indonesian citizens.Pertamina EP
PEP was established on 13 September 2005, to manage oil and gas operations (own operations) based on a Cooperation Contract (KKS) with BP Migas signed on 17 September 2005. As an upstream sector subsidiary, PEP carries out exploration and production of oil and gas in domestic working areas covering 140,000 km² formerly managed by PERTAMINA. PEP’s working area is divided into three regions: The Sumatra, Java, and Eastern Indonesian (KTI) Regions. The Sumatra Region covers the Rantau, Pangkalan Susu, Jambi, Pendopo and Prabumulih Fields, as well as the Pertamina EP Business Units (UBEP) at Jambi, Limau, Lirik, and Adera (ex JOB-EOR PERTAMINA Lekomaras, 22 April 2009). The Java Region covers The Cepu, Jatibarang, Subang and Tambun Fields. The Eastern Indonesian Region (KTI) covers: The Bunyu, Sangatta and Sorong Fields as well as the Tanjung and Sangasanga-Tarakan UBEPs.Pertamina Gas
Pertamina established PT Pertagas on 23 February 2007, and it became PT Pertamina Gas in 2008. The company undertakes gas transportation, trading and processing.In the gas transmission business, Pertamina owns a gas pipeline network with a total volume of 34,000 km-inches in Northern Sumatra, Central Sumatra, Southern Sumatra, Western Java, Eastern Java
Java
Java is an island of Indonesia. With a population of 135 million , it is the world's most populous island, and one of the most densely populated regions in the world. It is home to 60% of Indonesia's population. The Indonesian capital city, Jakarta, is in west Java...
, and East Kalimantan
Kalimantan
In English, the term Kalimantan refers to the Indonesian portion of the island of Borneo, while in Indonesian, the term "Kalimantan" refers to the whole island of Borneo....
In January 2009, PT Pertamina Gas obtained a Transportation Permit and in February 2009, it received an exclusive right from BPH Migas for gas
Gas
Gas is one of the three classical states of matter . Near absolute zero, a substance exists as a solid. As heat is added to this substance it melts into a liquid at its melting point , boils into a gas at its boiling point, and if heated high enough would enter a plasma state in which the electrons...
transportation along 43 transmission routes. These permit and exclusive rights complemented the business permit that had been issued previously (in September 2008). By obtaining a business license and special rights, PT Pertamina Gas now has a regulatory basis to play the principal role in the gas business in Indonesia.
Pertamina Geothermal Energy
PGE was founded on 12 December 2006. This Pertamina subsidiary carries out geothermal exploration and exploitation in 15 working areas (WKP) in Indonesia, namely: Sibayak-Sinabung, Sibual-buali–Sarulla, Sungai Penuh-Sumurup, Tambang Sawah-Hululais, Lumut Balai, Waypanas-Ulubelu, Cibereum-Parabakti, Pengalengan (Patuha-Wayang Windu), Kamojang-Darajat, Karaha-Telagabodas, Dieng, Iyang-Argopuro, Tabanan-Bali, Lahendong-Tompaso and Kotamobagu.Pertamina EP Cepu
PEP Cepu, which was established on 14 September 2005, is a subsidiary of PT Pertamina (Persero) that focuses on the upstream oil and gas business. In the Cepu Block, Pertamina has a 45% interest in partnership with Mobil Cepu Ltd (as the operator) and the Regional Owned Enterprise (BUMD) that manages the KKS for the Cepu Block.Pertamina Drilling Services Indonesia
PT PDSI was established on 13 June 2008 as a drilling service management business entity.The services provided comprise drilling, workover activities, and drilling services that use a Daily Rate and Integrated Drilling Management (MPT) system for oil, gas, and geothermal wells.
Presently, PT PDSI owned 34 drilling rigs (28 owned by PT PDSI and 6 transferred from PT Usayana)
Pertamina Hulu Energy
PHE is one of the Upstream Directorate subsidiaries working in the oil and gas upstream business, and is also an upstream business vehicle for managing the domestic and overseas cooperation portfolio in the form of: Production Sharing Contracts (PSC), Joint Operating Body-Production Sharing Contracts (JOB-PSC), Indonesian Participating / Pertamina Participating Interests (IP/PPI) and Badan Operasi Bersama (BOB). PHE’s overseas working areas covered: Western Desert Block 3,Iraq; Block 10&11.1, Offshore South Vietnam; Block SK-305, Offshore Sarawak, Malaysia; Sabratah 17-3 Block, Offshore Libya; Sirte 123-3 Block, Libya; Block 13, Red Sea, Offshore Sudan; Block-3, Offshore Qatar; and Basker Manta Gummy Block, Australia.Products
There are PERTAMINA’s products; consist of Fuel (BBM), non-fuel, Gas, Petrochemical, and Lubricant.Fuel (BBM)
Fuel Products:
- Kerosene
- HSD (High Speed Diesel)
- MDF (Marine Diesel Fuel)
- MFO (Marine Fuel Oil)
- Motor Gasoline (Such As : Premium 88 and Solar )
Special Fuel
Special Fuel products :
- Aviation Gasoline
- Aviation Turbine Fuel
- Bio Solar
- Bio Pertamax (RON 92 + E5)
- Pertamax (RON 92)
- Pertamax Plus (RON 95)
- Pertamina Dex (Diesel)
Non-Fuel (Non-BBM)
Non Fuel Products :
- Asphalt
- Calcined Coke
- Green Coke
- Heavy Aromate
- Paraffin Wax
- Pelarut (Solvent)
- Pelumas (Lube Base Oil)
- Slack Wax
Gas
- Gas Products consists of LPG (Liquid Petroleum Gas), Gas Fuel (BBG), Musicool (Substitute refrigerant for CFC, with low pollution and environmentally friendly)
Petrochemical
Numbers of PERTAMINA’s Petrochemical Products.
Lube Base Oil
Provides information of PERTAMINA’s Lube Base Oil Products based on their function:
- Automotive Gear Oil
- Circulating Oils
- Heavy Duty Diesel Engine Oils
- Industrial and Marine Engine Oils
- Industrial and Hydraulic Oils
- Passenger Car Oils
- Powershift Transmissions and Heavy Equipment Hydraulic Oils
- Refrigerating Oils
- Two Stroke Gasoline Engine Oils