Pertamina targets subholdings IPO early 2023, amidst worker unions strong rejection

Jakarta – PT Pertamina (Persero) targets the initial public offering (IPO) process for its subsidiaries, Pertamina Geothermal Energy (PGE) and Pertamina Hulu Energi (PHE) to be completed in the first semester of 2023.

“Shareholders set a target to increase the market cap or value of the company, we will unlock the value in the first half of this year,” Pertamina President Director Nicke Widyawati told a working meeting with Commission VI of the parliament (DPR), recently.

The Chief Executive of the Capital Market Supervision of the Financial Services Authority (OJK), Inarno Djajadi said that there is a slight delay in the PHE IPO process, because they still had to update their financial reports. Meanwhile, PGE is in the bookbuilding process in the range of Rp. 820-Rp. 945 per share. In the IPO of PGE shares, Pertamina Geothermal Energy will release a maximum of 10.35 billion shares. Thus, PGE has the potential to reap a maximum of IDR 9.78 trillion in fresh funds.

Pertamina Upstream Subholding will offer initial shares to the public of 10% to 15%. Based on its track record, PHE has had positive company performance, including exceeding key performance indicators by up to 102% in 2020, exceeding the oil and gas production targets set in the 2021 RKAP, and recording an accumulative figure of oil and gas production on average of 962,000 barrels equivalent. oil per day (MBOEPD) in the third quarter of 2022.

FSPPB strongly rejects the privatisation of Pertamina’s business unit

Pertamina’s move to privatise its subsidiaries has drawn strong resistance from the Federation of United Pertamina Workers Union (FSPPB) as the parent organisation of 25 trade unions within PT Pertamina (Persero), and urged an end to all efforts to privatise all of Pertamina’s business units.

In his written statement, FSPPB President Arie Gumilar rejected the corporate action of privatising PT Pertamina Geothermal Energy (PGE) through an Initial Public Offering (IPO). According to him, PGE as part of Pertamina’s affiliation has been doing well so far.

“PGE has achieved so many achievements and continues to grow as one of the companies that manages renewable energy and is the future of Indonesia’s electrification in the upstream sector,” said Gumilar, earlier this week.

Furthermore, he said, PGE recorded positive performance throughout the year and various awards also continued to be won by PGE which remained 100% owned by Pertamina. Among them won Proper Gold for 12 consecutive years from the Ministry of Environment and Forestry (KLHK). In addition, PGE also won the highest ESG Index from 679 utility and renewable power production companies around the world as well as many other awards.

Gumilar also stated that “PGE has never had any problems getting strategic partners in any of its business development projects”. PGE has been and is working with many parties as a strategic lender and gets soft loan interest such as the World Bank with a fix rate of 0.5% per year for 40 years plus a grace period of 10 years, JICA (Japan International Cooperation Agency) with an interest rate of 0.6 % per year for the 1st tranche and a fixed rate of 0.01% per year for the 2nd tranche with a tenor of 40 years plus a grace period of 10 years, and many others.

Sutrisno, Secretary General of FSPPB, in his written statement also explained that Indonesia has approximately 40% of the world’s geothermal reserves with potential reserves of 25.4 Giga Watt (GW) or the equivalent of 25.4 billion Watts. Thus, Indonesia’s position as the country that owns the largest reserves in the world of clean, environmentally friendly and renewable sources of geothermal energy. (Hartatik)

Banner photo: PT Pertamina Hulu Energi (PHE), as Pertamina’s Subholding Upstream, through PT Pertamina Hulu Energi Offshore North West Java (PHE ONW) operating in North Java waters. (Source: Pertamina)

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