Indonesia to launch IPO of Pertamina geothermal units next year

Indonesia to launch IPO of Pertamina geothermal units next year

A senior government official told parliament that JAKARTA Indonesia is going to launch initial public offerings for the upstream and geothermal units of state firm energy Pertamina next year to fund expansion.

Pertamina Hulu Energi, the upstream unit of Pertamina, is expected to sell a 10 per cent to 15 per cent stake in an IPO next year and had conducted initial sounding out of potential investors, deputy state-owned enterprise minister Pahala Mansury told lawmakers.

The government is hoping to conclude the IPO of Pertamina's geothermal unit in the first quarter of next year, after it was delayed due to less than optimum market condition this year, Pahala said.

The IPO of Pertamina Geothermal Energy was originally scheduled to take place in the second quarter of this year.

Pertamina Hulu Energi could raise between $1 billion and $3 billion in the IPO, according to people with knowledge of the matter, according to Refinitive publication IFR.

The geothermal unit's IPO could raise up to $500 million, according to IFR.

Pahala did not disclose the expected value at the hearing.

He said in the coming years, the upstream unit will be expected to spend $4 billion to $6 billion a year due to a push by the government to improve energy security and Pertamina Hulu could not only depend on its parent company.

The government will also push Pertamina Hulu to expand the development of offshore projects, as well as to diversify financing and to optimise the momentum of high oil and gas prices, Pahala said.

He said the government is preparing for share sales of state palm oil company Perkebunan Nusantara and state fertiliser maker Pupuk Kaltim.