Indonesia’s PGN says no official approach by Pertamina on takeover
Indonesian state oil firm Pertamina wants to buy the country's main natural gas distributor, state-owned PT Perusahaan Gas Negara (PGN), but has made no official approach, a PGN spokesman said.
President Susilo Bambang Yudhoyono's administration has been considering such a deal over the past few weeks to give Pertamina greater control over the distribution of the country's natural gas. PGN controls 80% of the gas pipelines in Southeast Asia's largest economy.
"It is true that there is an intention of Pertamina to acquire PGN, but officially, we have not received any letter or anything which mentions that," said PGN spokesman Ridha Ababil.
State-owned Enterprises Minister Dahlan Iskan told local newspaper Tempo recently that the government could make a decision on the acquisition sometime next year.
Some analysts have said a takeover by Pertamina won't benefit PGN, and have attributed the gas distributor's recent share price weakness to speculation about the acquisition. The shares has fallen as much as 13% since the start of November and are down 7% over that period as of Thursday's close.
Ababil said Pertamina would like to acquire PGN so it can distribute gas without paying a fee.
"There is an interest from Pertamina to control upstream to downstream gas activity. To do that, they need gas infrastructure," he said.
"The one that has gas infrastructure is PGN, while their subsidiary Pertagas is dedicated to upstream."
Last month, Pertamina said in a statement the proposed acquisition would strengthen national energy security.
The Indonesian government owns 57% of PGN, in which US fund managers such as Capital Group, Vanguard and Matthews International are also invested.
Indonesia consumes about 40 billion cubic metres of gas a year and demand is growing by at least 10% annually.
Natural gas accounts for about 20% of Indonesia's energy mix, while coal has a 50% share and oil about 30%. - Reuters, December 12, 2013.