PT Pertamina, Indonesia’s state-owned oil and gas company, is weighing an initial public offering of its exploration unit that could be the biggest first-time share sale in Southeast Asia in more than a decade, according to people with knowledge of the matter.
The structural decline in oil price — with current prices at less than half of their 2014 peak — has triggered immense pressure for national oil companies (NOCs) to transform. Having developed along with the rest of the industry in an environment where maximization of production and hydrocarbon reserves were the key objectives, they have had to shift rapidly to targeting returns to their state shareholder. Simply put, the focus has shifted from volume to value.
