JAKARTA (TheInsiderStories) – Shareholders of PT Perusahaan Gas Negara Tbk (IDX: PGAS) has appointed Gigih Prakoso, an Investment and Risk Management of state-owned energy producer PT Pertamina, as a new president director, said the company on Monday (10/09). He replaced the former president Jobi Triananda.
Fajar Harry Sampurno, deputy of Strategic Industry, Mining and Media of State Owned Enterprises (SOEs) ministry explained, that the decision to replace the president director of PGAS is one of the measure to sinergize the activity of oil and gas holding company.
Last March, Indonesia has issued Government Regulation on the Increase of the government equity in Pertamina, which provides legal foundation for the establishment of oil and gas holding entity. The establishment of an oil & gas holding company tracks the creation of a similar mining holding company set by the government late last year.
Based on the article 2 of the Government Regulation Number 6 Year of 2018, the government’s shares in PGAS totaling 13.08 billion units of B-series shares are transferred to the Pertamina. Furthermore, the article 3 of the regulation stated that the status of PGAS as a state-owned company is changed to a limited liability company.
With the transfer of the B-series shares, the government control PGAS shares through Pertamina. Under the current plan, Pertamina will acted as the holding entity of state-owned oil and gas provider. The holding firm will comprise four sub-holdings, namely upstream, processing, retail and gas.
Based on the regulation, the government integrate the gas companies through handover scheme (inbreng), and there is no cash transfers involved. As a result, the government is exempted from launching a tender for PGAS shares held by the public, as required by the Capital Market regulation.
The creation of sub-holding will make the development of gas infrastructure in the country to be more effective as there is no need for the two companies to compete. As happened in the past, PGAS, as the largest national gas distributor, often competes with Pertagas in developing gas infrastructure networks in various locations.
In addition, the holding company is expected to help boost government revenues and stimulate industrial growth. The integration of gas operators from upstream to downstream is expected to make gas distribution more efficient and ultimately help reduce gas prices.
From financial perspective, the oil and gas holding is projected to increase investment capacity of the entities to Rp416 trillion or US$28.69 billion in the next 15 years as well as resulting in value creation Rp329 trillion.
Prakoso was appointed as Director of Investment Planning and Risk Management of Pertamina on August 29, 2018. The holder of a Doctor of Economics from Gajah Mada University and the University of Kentucky, USA has served as Director of Strategy and Business Development of PGAS and Commissioner of PT Pertamina Patra Niaga.
Before becoming Director of PIMR, Gigih Prakoso had held a position in Pertamina that was relevant to the current responsibilities, namely the Senior Vice President of Corporate Strategic Growth.
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