Pertamina (Perusahaan Tambang Minyak Negara, lit. 'State Oil Extraction Company') is an Indonesian government-owned corporation which extracts and refines the country's oil and gas reserves. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of Liquefied Natural Gas (LNG).
In 1957, Dutch assets in petroleum were nationalized, from which Permina was founded as a state-owned oil monopoly, headed by Lieutenant-General Ibnu Sutowo. Ibnu Sutowo's position as the second deputy of Abdul Haris Nasution was the beginning of the army's involvement in the oil industry. Permina distributed oil for the entire archipelago.
Permina founded the Apprentice Technical School (Sekolah Kader Teknik) in Brandan to train and produce experts in the field. To meet this goal Permina established the Oil Academy in Bandung at 1962. Oil Academy's curriculum pertains to the technical aspects of the oil industry, and the graduates turned into the main forces in Pertamin (which later transformed to Pertamina).
In 1960, the Congress enacted a policy that the mining of Indonesian oil and ground gases are only permitted for the state, through a state-administered company. Pertamin, established in 1961, was responsible for the administration, management and controlling of the exploration and production. The policy was short lived. An agreement between the state and foreign companies was affirmed that gradually, oil refinement manufactures and other assets in marketing and distribution were to be sold to Indonesia within five to fifteen 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.
In the 1980s, major partnerships with American and French firms produced vast quantities of petroleum
. Caltex, a joint Chevron-Texaco company, and Total S.A. were some of the largest foreign players.
Human rights observers have long expressed concerns about Indonesia's hostility to labor unions. According to the Multinational Monitor: "In 1985, the government ordered the firing of over 1,600 workers at Pertamina and foreign oil companies, charging that they had been members of the Indonesian Communist Party, which had been banned 19 years earlier when Suharto took power."
In 2003 Pertamina legally became PT. Pertamina (Persero), as per 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, Pertamina holds Cooperation Contract to Oil and Gas Regulatory Body. With its transformation into a limited liability company, Pertamina has become a business entity with the main target of making a profit.
