Insight
Indonesia's PERTAMINA-PGN to merge: what are the implications?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
PGN (Perusahaaan Gas Negara) held an extraordinary shareholder meeting on Thursday, 25 January 2018, as requested by Indonesia's Minister of State-owned Enterprises. The meeting approved the transfer of the government's 57% share in PGN to PERTAMINA, paving the way for PGN to merge with PERTAMINA. Subsequently, PGN will acquire Pertagas, PERTAMINA's subsidiary in gas transportation and distribution. We view the merger as positive for PERTAMINA and PGN, given the complementary gas pipeline businesses, and the potential for corporate synergies. However, the combined company, will have a dominant position across the whole gas value chain – from upstream, to midstream and downstream. Abuse of this dominant position, to the detriment of other market participants, could be a real risk unless supported by additional regulations. Third-party access to pipelines, or a monopolistic approach to negotiations with upstream producers are key risks to be mitigated.
Table of contents
- What's happened
- Background
- Implications
-
Uncertainties
- Appendix: PERTAMINA and PGN's key financial figures
Tables and charts
This report includes the following images and tables:
- PERTAMINA and PGN's positions in the gas market
- Indonesia's PERTAMINA-PGN to merge: what are the implications?: Image 2
What's included
This report contains:
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