Ramba ramba
Albertus Weldison Nonto | July 02, 2011

With key acquisitions in Sumatra and West Java this year, Singapore-listed Ramba Energy Group is making closely-watched moves in Indonesia’s oil and gas sector. Established in Singapore in 2008, Ramba Energy has made swift and strategic steps into Indonesia’s oil and gas industry. After acquiring a 70% stake in the Jati block in West Java in 2009, a month later it acquired a 41% stake in the Lemang block in South Sumatra.

The company also controls a 55% stake in PT Sugih Energy Tbk., which in turn owns 37.5% of Elnusa Tristar Ramba Ltd (ETRL), the former operator of the Sumatra corridor block. Most recently, Ramba won the exploration bid for the West Jambi block through a cooperative agreement with PT Pertamina.

Still in its infancy, Ramba has its sights set on playing with the big boys and it’s not doing too badly.  The company generated $40 million in revenue last year, an impressive 55% jump from the previous year, but its energy portfolio represented just 10% of that figure.

Before Ramba was Ramba it was the RichLand Group – a successful logistics and air cargo service provider founded in 1992 – and much of its profits are still driven by these operations. 

Mover and shaker

Spearheading the metamorphosis of the company is CEO Aditya Wisnuwardana Seky Soeryadjaja, or David to friends. Aditya is the grandson of the late William Soeryadjaja, the man who built the Astra International empire. With plans to make Ramba one the country’s biggest oil and gas players, it seems Aditya has inherited his family’s bullish legacy.

“Ramba Energy takes up 99% of my time. Since we formed in 2008, it has been my number one priority. Ramba is the only company I am involved in where I am serving as the chief executive officer,” says Aditya, who was also influenced by his father Edward’s business interests in the Singaporean investment company the L&M Group.

As part of his ambitious trajectory, Aditya is keen to continue Ramba’s expansion plans in Indonesia and throughout Asia. “We are actively looking for oil and gas interests to acquire in Indonesia, as well as acquisitions for our logistics business,” he says.  

On the ground

For Ramba commercial director Daniel ZJ Jol, the main task at hand is pushing the company’s production capacity to 80 barrels of oil per day (bopd), 3.5 million cubic feet of gas per day (MMCFG) and 56 billion cubic feet of reserves through its subsidiary Ellipse Energy Jatirangon Wahana Ltd. In particular, the Lemang block situated in the Jambi sub-basin has the potential to produce big numbers.

PetroChina, one of the biggest oil and gas companies in Indonesia, operates in the area and produces around 58,000 bopd and 135 MMCFG, notes Daniel.  “Another reason is the central Sumatra pipeline will intersect the area and make it easy to transport gas to Chevron and even to Singapore.”

Further north, preliminary findings in the West Jambi block report 4.1 MMCFG waiting to be tapped.  Ramba plans to start drilling in Lemang this August, while 3D seismic studies are being completed in West Jambi later this year. The wheels might be in motion but Ramba is still a long way from reaching the heights of the industry heavyweights, says an independent industry source. 

“To benchmark the size of company from private players in Indonesia, just compare it to Arifin Panigoro's Medco International. I think Ramba is a long way off that,” he says. It’s a comparison that Daniel does little to refute. “We are still very young, but at least in the short term we want to be like Premier Oil, with a production capacity of around 120 million cubic feet per day,” he says. 

The decision to acquire PT Sugih Energy, he explains, was part of Ramba’s strategic move into Indonesia’s energy sector.  “Sugih Energy has valuable technical knowledge about the sector in this block,” he says. “I’m very pleased with the progress and inroads achieved by our company up to this point. We will be stepping up our momentum to increase our oil and gas reserves organically and by acquisition, and profitability will soon follow. I am confident that Ramba will experience significant growth over the next couple of years.” 

The backbone

While its oil and gas business is still nascent, Ramba’s logistics operations – run by its subsidiary Richland Logistic Service – make a significant contribution to the group’s growth. Predominately operating in Malaysia and Singapore, the company began expanding into Indonesia’s chemical and logistics sectors last year, following a deal with Germany's BASF chemical operations.

Commenting on the Indonesian market, Richland’s logistics director Colin Moran says it is marked by inefficiencies and poor management which result in a slow-moving supply chain. “It’s both a problem and an opportunity,” he muses, before focusing on the latter. “Let say that between 15-20% of goods production costs go to the logistics side.

That means that there is huge money in this sector, particularly in oil and gas,” he says. “Customers need value, not just the price they pay for logistics. A critical success factor in this business is speed of service, safety and cost efficiency,” he notes, adding that Richland has just initiated a $10 million project across the ASEAN region.

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