See Pertamina's New Structure

Friday, June 12, 2020, became a special day for PT Pertamina (Persero), because at that time through the General Meeting of Shareholders (GMS) held virtually during the Covid-19 pandemic, the structure of this oil and gas BUMN changed.

Although there have been many speculations circulating before, starting from the very hot one, namely the issue of replacing the President Director to the changes in the composition of the directors, the results gave many surprises. The government decided to keep Nicke Widyawati as President Director. For this, the government has its own reasons.

Nicke Widyawati

"So far, Nicke Widyawati is still the best as Pertamina's Managing Director, because it is able to carry out the tasks assigned," said SOE Minister Erick Thohir.

SOE Minister Erick Thohir

The government has also streamlined the number of directors from 11 to six, and the nomenclature of the position of directors of the state-owned oil and gas company has also been changed namely the finance director, director of logistics and infrastructure, director of human resources, director of business support and director of the portfolio strategy and new ventures.

What made the public ask was when the AGM abolished the positions of upstream director, corporate marketing director, retail marketing director, processing director, and director of processing and petrochemical megaprojects.

No wonder, considering that this position is very strategic for Pertamina which incidentally has a core business in the oil and gas sector. In addition, Pertamina also has a 'big project' which is building a number of oil refineries. However, it turns out the government wants the special business to be handled by a subsidiary (sub-holding).

"The establishment of this sub-holding is to integrate Pertamina's business which is handled by a number of its subsidiaries to become one focus," said Erick.

Fajriyah Usman

Pertamina Corporate Communication Vice President Fajriyah Usman explained, as holding Pertamina's duties would be directed at managing portfolios and business synergies throughout the Pertamina Group, accelerating the development of new businesses and running national programs.

Whereas the sub-holding will play a role to encourage operational excellence through the development of scale and synergy of each business, accelerate the development of existing business and business capabilities as well as increase the ability and flexibility in partnership and funding that is more profitable for the company.

Through this new structure, Pertamina is expected to become more agile, focused, and faster in developing world-class capabilities in its business. This is expected to accelerate the growth of the business scale to become a leading global energy company with a market value of US $ 100 billion and to be a driver of social development in 2024. 

    Energy Watch Executive Director Mamit Setiawan assesses the change in nomenclature within the new organization in Pertamina, as the efforts of the Ministry of SOEs in making Pertamina more efficient and better.

Sub Holdings

The five sub-holding companies are upstream sub-holding whose operations are handed over by PT Pertamina Hulu Energi (PHE), gas sub-holding by PT Perusahaan Gas Negara (PGN) Tbk, processing and petrochemical sub-holding by PT Kilang Pertamina International, electricity holding sub-companies and renewable energy by PT Pertamina Power Indonesia, PT Patra Niaga's commercial and marketing sub-holding, and shipping sub-holding by PT Pertamina International Shipping.

     Pertamina President Director Nicke Widyawati said that the transformation was carried out to prepare Pertamina's business lines to develop and be independent. Because at present Pertamina's business scope is very broad with different challenges and competitions and has specific risks of each.

"Therefore, with this sub-holding, every business can move faster and agile to develop world-class capabilities and business scale growth that will support Pertamina to become a leading global energy company with a market value of US $ 100 billion," said Nicke.

If you pay attention, the composition of Pertamina's sub-holding is not much different compared to that of other foreign oil and gas companies such as Petronas Malaysia and PTT Thailand. 

   In Petronas for example, there are 5 sub-holding companies including Upstream namely Petronas Carigali, International Business namely Petronas International Corporation, Downstream Business namely Petronas Chemical Group Berhad, Marketing, and Trading Business by Petronas Trading Corporation, and Power Business by Petronas Power. Regarding this matter, Mamit considers that there are indeed similarities with Petronas.

"Yes, I see it almost the same concept," he said.

He also agreed if one of the sub-holding conducted an IPO.

"Petronas has a shipping sub-holding named MISC Berhad and has an IPO and has now traveled everywhere," he said.

Another innovation made by the government and Pertamina is to place a number of young workers in strategic sub-holding positions. One of them, Mars Ega as Director of Business Planning and Development in the Commercial and Trading sub-holding. This 41-year-old young man said that this was a big challenge.

"But it must be realized that sooner or later a company needs regeneration, so what is more important is that every young worker must prepare well to become a successor to the company's management," he said.

He felt the benefits of Pertamina's talent development programs, especially in developing business and leadership competencies.

"This also shows that the company does not only look at the seniority side in the process of determining the position, hopefully, but this can also be an encouragement for other friends to make more achievements," he explained.

Investor Daily,  Page-12, Wednesday, June 17, 2020