Pertamina Is Considered Loss Of Focus And Risk Of Repeating Past Management Errors

Illustration. (Photo: Doc. Antara)

JAKARTA - A number of parties criticized the policies of PT Pertamina (Persero) following the fading focus on the core business and the risk of mismanagement of a number of its subsidiaries.

BUMN Institute Synergy Executive Director Achmad Yunus assessed that the establishment of a number of sub-holdings is proof that Pertamina does not focus on core business, so it is not in line with the government's mandate to focus on running the oil and gas business.

According to Yunus, Pertamina's loss of focus caused various problems, such as refinery fires that have often occurred recently.

"Pertamina must evaluate, the refinery has been burned for a number of times. This means that there is an inappropriate work safety process, this is what the public is highlighting," he told reporters, Tuesday, March 14.

During Nicke Widyawati's leadership, at least six Pertamina refineries were burned. Finally, the Pertamina Plumpang Depot fire, North Jakarta, became a heartbreaking incident, hundreds of buildings around the area were burned to the ground, dozens of residents died.

Through a subholding strategy, Pertamina has started to enter the non-oil and gas business. For example, oil and gas logistics through PT Pertamina International Shipping (PIS) and the geothermal business through a subsidiary of PT Pertamina Geothermal Energy Tbk which recently took the floor on the Exchange floor with ticker PGEO.

Yunus also detected the potential for mismanagement in Pertamina through the IPO plan of a number of subsidiaries. After PGE, PT Pertamina Hulu Energi (PHE) will also go public this year.

He considered that in the future Pertamina would face the loss of power due to the act of releasing state shares in a number of these subsidiaries. Yunus is worried that this will be a new threat for Pertamina to enter the bankruptcy black hole amid the company's poor management system.

Seeing Pertamina's condition today, Yunus is worried that the potential for bankruptcy will again threaten the state-owned company, such as the 60s to 70s.

At that time, Pertamina was loose in the curvature without the knowledge of the government and the DPR. The policies carried out are also not in line with the framework for the development of the National Development Planning Agency (Bappenas).

Several business units that are said to support the company's business have actually become a source of leakage. There are even allegations of embezzlement of funds, in which a number of project costs cannot be counted or audited.

Citing the Washington Post published on October 12, 1977, it was written that the Republic National Bank of Dallas formed a syndicate with the Bank of America to provide Pertamina with a 360-day loan worth US$40 million in 1971 and 1972.

In March 1975, in a dramatic meeting in Jakarta between the then President Director of Pertamina Ibnu Sutowo and 24 foreign bankers, a Dallas bank representative said that Pertamina failed to pay a loan of 40 million US dollars.

Before Pertamina's state oil company in Indonesia almost collapsed in 1975, private banks poured billions of US dollars into the company, in part to finance Ibnu Sutowo's scheme, for a growing new subsidiary.

Then, when Pertamina seemed unable to pay for it in early 1975, several banks urged the Indonesian government to cover the oil company's debt.

"So even though Pertamina has a subholding, her legs have started to be handed over to the public. That's why I ask what Pertamina really wants to focus on? Where are they going in oil and gas? Don't let a story like it used to be, "said Yunus.