Jakarta. Indonesia’s state energy giant Pertamina is preparing to spin off several subsidiaries outside its core oil, gas, and renewable energy businesses, including airline Pelita Air, CEO Simon Aloysius Mantiri said on Thursday.

Speaking at a parliamentary hearing, Simon explained that the move is part of a wider restructuring effort designed to sharpen Pertamina’s focus on its main energy operations.

“Pertamina will be more focused on its core businesses in oil, gas, and renewable energy. Therefore, some subsidiaries will be spun off,” Simon told lawmakers.

Under the plan, divested subsidiaries will be merged with other state-owned companies operating in similar industries. For example, Pelita Air is expected to be integrated with flag carrier Garuda Indonesia, he said.

Pelita Air, originally established to serve Pertamina’s internal aviation needs, has in recent years expanded into the commercial passenger market. It has positioned itself as a rising competitor to Garuda Indonesia and its budget arm, Citilink, particularly on domestic routes such as Jakarta–Bali.

Other subsidiaries under review for separation operate in sectors such as insurance, hospitality, and healthcare.

The restructuring is being coordinated under the roadmap of Danantara, Indonesia’s newly established sovereign wealth fund, which oversees investment and consolidation among state-owned enterprises (SOEs).

“This program will be carried out under Danantara’s coordination, with subsidiaries spun off and merged with companies in related sectors,” Simon said.

Too Many SOEs
Efforts to consolidate SOEs with overlapping businesses date back to the presidency of Joko Widodo and have been overseen by the State-Owned Enterprises Ministry. The creation of Danantara earlier this year has revived these plans, with a more centralized approach.

Danantara CEO Rosan Roeslani previously signaled that restructuring may not only involve mergers but also the closure of loss-making SOEs without essential public service obligations.

Indonesia currently counts 47 state-owned enterprises, but the number grows dramatically when including subsidiaries. Rosan said in late April that Danantara listed 844 SOEs and sub-entities, encompassing what he described as “children, grandchildren, and great-grandchildren” of parent companies.