ABSTRACT
The metamorphosis of the state oil sector occurred thus: previously P.N. Permina controlled all exploration, development and refining and P.N. Pertamin undertook domestic distribution. The pattern of foreign investment in the oil sector since 1966 has been markedly different. The fact that the large profits of the oil industry were not being made available to the government budget weakened the justification for promoting the oil sector to finance the development of the economy in general. The state oil company has been described as a 'state within a state'. If those revenues were not forthcoming the oil sector had little to do with solving the country's unemployment problem. Suspicions were aroused when it became known in 1973-4 that Pertamina was having difficulty raising new loans on the international capital market. It has been described as a service base, but was also designed to be petroleum-based industrial estate and an operational base for the exploration and exploitation of oil and natural gas.
