page_title: History of Palembang
section_title: Colonial period
hierarchical_section_title: History of Palembang / Colonial period
caption_attribution_description: Nederlands: Schoolplaat. De rivier de Musi bij Palembang
context_page_description: Palembang is the capital city of South Sumatra province of Indonesia. Currently, this city the oldest existing city in Indonesia, dates back to 7th century. Palembang was once the capital city of Srivijaya, a Malay kingdom which ruled parts of the western archipelago and controlled maritime trade routes especially in the Strait of Malacca. Palembang incorporated into Dutch East Indies in 1825 after the abolishment of Palembang Sultanate. Palembang is chartered as a city in 1 April 1906. Palembang today is the second largest city in Sumatra and the ninth largest city in Indonesia. The city has become host of several international events, including 2011 Southeast Asian Games and 2018 Asian Games.
context_section_description: Since the abolition of the Palembang Sultanate in 1825 by the Dutch, Palembang become the capital of Residency of Palembang, encompassing whole territory who will be South Sumatra province after independence, led by Jan Izaäk van Sevenhoven as its first resident.
  From the late nineteenth century, with the introduction of new export crops by the Dutch companies, Palembang rose again as an economic centre. In the 1900s, the development of the petroleum and rubber industries caused unprecedented economic growth, which brought about the influx of migrants, an increase in urbanisation, and development of the socioeconomic infrastructure.
  The emergence of rubber cultivation in South Sumatra began in the late 19th century. In the early 20th century, several major Western companies entered the area and operated rubber plantations. From the mid-1920s, rubber became the biggest export crop in the area, surpassing robusta coffee. Although there were large rubber estates owned by Western enterprises, rubber in Palembang was produced mainly by smallholders. By the 1920s, the Residency of Palembang (today's South Sumatra province) was ranked sixth among the regions of smallholder rubber production, becoming the largest of the smallholder rubber regions in the 1940s, producing 58,000 tons of rubber.
  There were three petroleum companies in 1900: the Sumatra-Palembang Petroleum Company (Sumpal); the French-owned Muara Enim Petroleum Company; and the Musi Ilir Petroleum Company. The Sumpal was soon assimilated into the Royal Dutch, and the Muara Enim Co. and the Musi Ilir Co. were also assimilated into the Royal Dutch, in 1904 and in 1906, respectively. Based on this assimilation, Royal Dutch and Shell established the BPM, the operating company of Royal Dutch Shell, and opened an oil refinery at Plaju, on the shore of the Musi River in Palembang, in 1907. While BPM was the only operating company in this area until the 1910s, American oil companies launched their business in the Palembang region from the 1920s. Standard Oil of New Jersey established a subsidiary, the American Petroleum Company, and, to prevent Dutch laws to restrict the activities of foreign firms, the American Petroleum Company established its own subsidiary, the Netherlands Colonial Oil Company (Nederlandche Koloniale Petroleum Maatschapij, NKPM). The NKPM began to establish itself in Sungai Gerong area in the early 1920s, and completed the construction of pipelines to send 3,500 barrels per day from their oilfields to the refinery at Sungai Gerong. The two refinery complexes were like enclaves, separate urban centres with houses, hospitals, and other cultural facilities built by the Dutch and Americans. In 1933, Standard Oil incorporated the NKPM holdings into the Standard Vacuum Company, a new joint venture corporation, which was renamed the Standard Vacuum Petroleum Maatschappij (SVPM). Caltex (a subsidiary of the Standard Oil California and Texas Company) secured extensive exploration concessions in Central Sumatra (Jambi) in 1931. By 1938, the production of crude oil in the Netherlands East Indies totalled 7,398,000 metric tons, and the shares of the BPM reached seventy two percent, while the NKPM (StandardVacuum)’s share was twenty eight percent. Whereas the most prolific area in crude oil production was East Kalimantan until the late 1930s, since then Palembang and Jambi took over the position. All crude oil production in the NEI was processed at seven refineries at this time, especially at three large export refineries: the NKPM plant at Sungai Gerong, the BPM refineries at Plaju, and the one in Balikpapan. Thus Palembang held two of the three biggest oil refineries in the archipelago.
  In the 1920s, with the guidance of Thomas Karsten, one of the pioneers of architectural project in the cities in the Netherlands East Indies, the Traffic Commission (Komisi Lalu Lintas) of Palembang was to improve inland transportation conditions in Palembang. The Commission reclaimed land from rivers and asphalted roads. Traffic plan in the city of Palembang was based on Karsten’s
caption: A painting of Palembang during Dutch rule.
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