(''Perusahaan Tambang Minyak Negara'', lit. 'State Oil Company') is an
Indonesia n
Government-owned Corporation which runs the country oil & gas reserves. It was created in August 1968 by the merger of
Pertamin (established 1961) and
Permina (established 1957).
Article 33 of
The Constitution Of 1945 emphasizes that "Land, water and their containing natural resources are possessed by the state and are used for people's utmost wellbeing". Based on this Article, the privilege to manage oil industry is in the government's hand.
On (''Sekolah Kader Teknik'') in
Brandan to fulfill the needs of experts on oil's area. Permina also established
Oil Academy in
Bandung at 1962. Oil Academy's curriculum consists of several aspects in oil industry, and the graduates turned into the main forces in Pertamin (which later transformed to Pertamina). Pertamin, established in 1961, was responsible for the administration, management and controlling of the exploration and production.
In 1960, the Congress stated a policy that oil and ground gases mining are only permitted for the state, through a state company. The involvement of foreign party was bonded by contract since then. Afterward, an agreement between the state and foreign companies was affirmed that gradually, oil
Refinement manufactures and other assets in marketing and distribution are vended to Indonesia throughout 5 - 15 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.
After the merge, Pertamina's production rose considerably (about 15% each in 1968 and 1969, and nearly 20% in 1973).Ricklefs, 296 It went on to become one of the largest corporations in the world. By the end of 1973, it directly produced 28.2% of Indonesia's oil, with agreements of
Caltrex and
Stanvac to produce the rest (67.8% and 3.6%, respectively). Its assets included seven
Refineries ,
Oil Terminal s, 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 . It had built the
Bina Graha , the presidential executive office building in
Jakarta .Ricklefs, 301
In 1973, the government tightened its ability to borrow money from overseas, and in February 1975, Pertamina was in a position of not being able to pay its American and Canadian creditors. An investigation followed, which revealed high levels of
Debt (over
US$ 10 billion), mismanagement, and corruption within the company. This debt was equivalent to approximately thirty percent of Indonesia's
GNP at the time.
1 The investigation hurt the reputation of the national elite both among Indonesians and foreigners. 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.
Pertamina has legally transformed to be PT. Pertamina (
Persero ) since
September 17 2003 by 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, as a business player Pertamina also holds Cooperation Contract to Oil and Gas Regulatory Body. Due to the transformation to be a
Limited Liability Company , Pertamina becomes a pure business entity which is more profit oriented.
Currently Pertamina owns 7
Oil Refineries which have a capacity of 1,041.2 thousand barrels, 2 gas reserves with a capacity of 31 tons per year, and a petrochemical company.
Pertamina's products include:
