Jakarta. The merger of three subsidiaries of state energy company Pertamina has generated savings of approximately $600 million-$700 million by reducing internal transaction costs and operational inefficiencies, Danantara Indonesia Chief Operating Officer Dony Oskaria said on Thursday.

Earlier this year, Danantara consolidated Pertamina Patra Niaga, Kilang Pertamina Internasional, and Pertamina International Shipping into a single entity, bringing fuel sales and distribution, refining operations, and shipping activities under one corporate structure. Pertamina Patra Niaga emerged as the surviving entity following the merger.

According to Dony, the restructuring has eliminated a range of internal transaction costs and accounting inefficiencies that previously existed among the three companies.

“Since the merger, we have saved approximately $600 million to $700 million,” Dony said in Jakarta.

The savings are part of a broader effort by Danantara to streamline Indonesia’s state-owned enterprise sector and eliminate what Dony described as costly layering transactions within corporate groups.

He said such practices often involve multiple subsidiaries handling different stages of the same project, resulting in unnecessary costs and reduced operational efficiency.

As an example, Dony cited the telecommunications sector, where projects within Telkom Group sometimes passed through several layers of subsidiaries before execution, adding administrative and transaction expenses.

“Over the years, we have become accustomed to layering transactions between parent companies, subsidiaries, sub-subsidiaries, and even lower-tier entities, which ultimately creates inefficiencies,” he said.

Danantara plans to continue consolidating and simplifying state-owned enterprise structures as part of its broader reform agenda.

According to Dony, if the streamlining program is fully implemented and the number of state-owned entities is reduced from thousands to around 254 companies, Danantara could generate immediate savings of approximately Rp 50 trillion ($2.8 billion).

Importantly, he said those savings would be realized even before any improvement in profitability or operational performance resulting from the mergers and consolidations.

“If we complete this process, we could achieve savings of Rp 50 trillion. These are immediate savings, even before we improve management quality or profitability following the mergers,” Dony said.