Reform Team to Strengthen ISC Pertamina’s Authority

The Oil and Gas Governance Reform Team plans to strengthen the role and authority of Integrated Supply Chain (ISC) in oil procurement. ISC is Pertamina’s unit established in 2008 by its then CEO Ari Soemarno.

“We tend to encourage a one-stop crude oil and fuel procurement through the ISC that will need a revamp,” said the Head of the Reform Team Faisal Basri at his office.

Faisal believes that reestablishing and strengthening the role of the ISC in crude oil and fuel procurement will make everything more transparent. Going forward, oil procurement does not have to use a G2G model such as in the case of Angola which involved the President himself.

ISC was initially established to combine the functions of crude oil and fuel procurement. These authorities were previously divided between Pertamina’s Processing Directorate and its Marketing and Trading Directorate.  

ISC plays a role that’s similar to Pertamina Energy Trading Limited (Petral), but it purchased oil through Petral whether periodically or on an adhoc basis. ISC determined the winning price and bidder in the tender conducted by Petral.

In October 2008, Sudirman Said was appointed as Head of the ISC. Many, however, were against the ISC. In fact, the House of Representatives established a Special Committee of Inquiry on Fuel because ISC was deemed ineffective.  

Sudirman was removed from his position in March 2009. Later Pertamina turned the role of ISC into a unit that’s responsible for strategy formulation or a marketing think-tank. ISC’s authority in oil procurement was handed over to Petral as per the direction of Pertamina’s Board of Commissioners.

source:KATADATA