Category: Alternative Energy

State-owned oil and natural gas corporation PT Pertamina has gained recognition from several international institutions over its strong implementation of the environmental, social, and governance (ESG) approach this year.

Pertamina’s ESG implementation, which is getting stronger, has attracted international interest, as seen from the acknowledgment from a number of institutions and international awards, the company stated in a release received here on Tuesday.

The latest acknowledgment has come from JP Morgan, which included Pertamina in its ESG Emerging Market Bond Instrument (JESG EMBI) Index and assigned it a score of 44.2 in June 2022. The score is higher than the threshold of 20 set by JESG EMBI.

It shows that Pertamina has succeeded in improving its business, especially in terms of environmental insight, sustainability, and aspects of good governance, the company said.

“With this recognition, Pertamina has the opportunity to access wider funding in the market, including more competitive interest rates,” it added.

Pertamina’s position has also become more recognized globally as a motor that drives sustainability in Indonesia, especially since the country has also committed to implementing the Paris Agreement on reducing carbon emissions.

“In line with Pertamina’s vision to become a sustainable global energy company, we continue to improve the company’s ESG aspects in accordance with international sustainability practices so that our initiatives are in accordance with ESG standards,” said Emma Sri Martini, Pertamina’s finance director who is also a committee member of Pertamina Sustainability.

Pertamina has undertaken several measures in its sustainability efforts, including contributing to reducing carbon emissions, maintaining biodiversity, and implementing good corporate governance (GCG).

Further, Pertamina succeeded in reducing 7.4 million tons of carbon equivalent, or around 29 percent, by 2021 from the 2010 baseline.

Meanwhile, to maintain biodiversity, the company, in the past five years, has carried out conservation efforts for around 30 endemic animal species and around 24 plant species, most of which have become nearly extinct.

Regarding the implementation of GCG, Pertamina earlier this year won the Anti-Bribery Management System certification, which signifies the company’s commitment to implementing accountable work practices.

Apart from its inclusion on the JP Morgan Index, Pertamina also received a number of awards for sustainability efforts.

In June 2022, Pertamina and its affiliate, Pertamina Hulu Rokan, won the Indonesian Sustainability Business Award (SBA) in the “Highly Recommended” category.

The SBA is given to companies that are considered to have a very strong sustainability commitment and demonstrate consistent efforts in various sustainability areas as well as have a good road map for sustainability implementation.

SBA Indonesia has been instituted by Global Initiatives, an international company based in Singapore that is concerned with sustainability issues. Global Initiatives organizes the award program with some local partners, namely PwC Indonesia, the Indonesian Business Council for Sustainable Development (IBCSD), Control Union, and the Indonesian Chamber of Commerce and Industry (Kadin).

The award is also held in several other countries besides Indonesia, namely Singapore, Malaysia, the Philippines, and Thailand.

Earlier, Pertamina had also received an ESG score of 28.1 from Sustainalytics in 2021, which reflected a moderate level of risk, on par with other companies such as Spanish energy company Repsol and Italian oil industry company ENI.

In addition, the World Benchmarking Alliance (WBA) also placed Pertamina 49th out of 100 oil and gas companies in the WBA Climate & Energy topic.

“We also encourage all Pertamina sub-holdings and affiliates to improve the implementation of ESG aspects, so that the company’s operational and business programs can further implement some applicable rules according to ESG best practices,” Martini said.

Launched in 2018, the WBA seeks to generate a movement around increasing the private sector’s impact on efforts to build a sustainable future for all.

Contact: Fajriyah Usman, VP Corporate Communications, PT Pertamina (Persero)
M: +62 858 8330 8686, Email: fajriyah.usman@pertamina.com, URL: https://www.pertamina.com
Written by: Yuni Arisandy Sinaga, Editor: Rahmad Nasution (c) ANTARA 2022

The B20 Energy, Sustainability, and Climate (ESC) Task Force has drafted recommendations and policy actions on global energy transition during the 5th call meeting that was held virtually on June 21, 2022.

According to the Task Force’s deputy chair, Agung Wicaksono, the recommendations and policies have been intensively discussed by the members for the last five months, and the drafts mark the end of the journey of the planning process.

“It is truly an honor and privilege for me to convene the last Task Force Call Meeting today, and especially for all members who have been present to share their thoughts and bright ideas and dedicate themselves to the goal solutions of co-financing the global energy sustainability and climate change issues,” Wicaksono said in a statement released Wednesday.

On the same day during a side event held in Rome, Italy, Wicaksono also said that the Task Force had worked closely in advancing global cooperation, which is an important element in drafting policy recommendations.

“I believe our Task Force is one of the most anticipated and enthusiastic in this B20 event because up to this date, we have received more than hundreds comments and inputs from all of us. It is not an easy task to incorporate all valuable perspectives and ideas into the policy drafts,” he added.

The fifth draft is the result of a meticulous decision to accommodate, integrate, and simplify ideas so that they can be attainable.

“Furthermore, after the last meeting, we have also included the KPIs and SDGs monitoring, as well as the final policy drafts. However, we would like to inform you that this fifth draft cannot be altered substantially,” Wicaksono said.

Meanwhile, the Policy Manager of the B20 ESC Task Force Indonesia, Oki Muraza, announced the last three policy recommendations, the first is to increase the global cooperation in accelerating the sustainable energy transition by reducing the intensity of carbon energy use through various channels.

“The main highlights in this recommendation are promoting energy efficiency, creating coal-fired power plants in gradual stages, reducing emissions from sectors that are difficult to reduce, facilitating financing to developing countries, and innovating climate technology,” Muraza said.

The second recommendation is to increase global cooperation to ensure a just, orderly, and affordable transition to sustainable energy use in all developed and developing countries.

“(Through) running an orderly transition in primary energy sources, involving the participation of MSMEs in the energy transition, preparing for the transition of the workforce, and implementing sustainable mining practices,” he said.

Lastly, the third recommendation is to increase global cooperation to extend the access to consumers and their ability to utilize clean modern energy.

“We must develop integrated energy solutions so that the access to clean energy can be reached to the level of household and MSME, as well as carrying out a broad energy transition,” Muraza said.

The all three policy recommendations mentioned will be brought further to the B20-G20 Dialogue in July, and later be included the policy formulation at the G20 Indonesia Presidency 2022.

Contact: Fajriyah Usman, VP Corporate Communications, PT Pertamina (Persero)
M: +62 858 8330 8686, Email: fajriyah.usman@pertamina.com, URL: https://www.pertamina.com
Written by: Yashinta Difa Pramudyani, Editor: Fardah Assegaf (c) ANTARA 2022

State-owned oil and gas firm PT Pertamina (Persero) succeeded in achieving cost optimization of US$2.21 billion in 2021 amid high global crude oil prices.

“Through this business strategy, in 2021, Pertamina succeeded in cost optimization of US$2.21 billion, obtained from the cost savings program (cost-saving) of US$1.36 billion, cost avoidance of US$356 million, and additional revenue (revenue growth) of around US$495 million,” director of finance of Pertamina, Emma Sri Martini, said in Jakarta on Tuesday.

Martini explained that Pertamina has developed several policies and business strategies from the financial and operational perspective to face the increasing global oil price challenges.

Pertamina is strengthening its financial strategy and operational efforts to improve efficiency across business lines, both holdings and sub-holdings and from upstream processing to downstream, amid increasing crude oil prices.

From a financial perspective, Pertamina has implemented a cost optimization program across the Pertamina Group, including cost savings, cost avoidance, and increased revenue.

Under the savings efforts, Pertamina is also running a hedging program for market risk management. In addition, the company has centralized procurement, prioritized capital expenditures, and is managing assets and liabilities to reduce costs or interest expenses (cost of funds).

“We are trying to optimize all costs and manage the company’s financial aspects, to reduce costs, including prioritizing projects that have fast results,” she said.

Besides financial tightening, Pertamina is also implementing an operational strategy to increase revenue for its six sub-holdings.

In the upstream business, Pertamina has continued to increase oil and gas production and lifting to take advantage of the increasing oil prices. As a result, production has increased by 4 percent and lifting by 3 percent.

The positive performance from upstream operations has been contributed by Rokan Block and foreign assets and consistent efforts to maintain production levels through well-drilling and resource discovery.

In 2021, Pertamina drilled 12 exploration wells and 350 exploitation wells. In the same year, its discovered reserves (2C) reached 486.70 MMBOE (million barrels of oil equivalent) and additional proven reserves (P1) reached 623.47 MMBOE.

In processing and petrochemicals, in 2021, Pertamina implemented a crude and product optimization strategy. This contributed to an increase in product yield value by around 3 percent.

The strategy is related to the selection and economic substitution of crude oil and maximizing high valuable products with high spreads. In 2021, refinery production also increased in response to higher energy demand due to national economic recovery.

Then, in the transportation and logistics sectors, Pertamina optimized the load factor to achieve revenue and cost-efficiency. In the gas business, Pertamina also increased the gas trade volume and transportation, as well as oil transportation volume.

“And after the legal end state, we will also intensify resource sharing, such as sharing facilities and development agreements, especially in upstream sub-holding,” Martini said.

She added that the positive performance downstream was also supported by the government through the recognition of the difference in compensation for HJE JBT Solar and JBKP Pertalite in 2021, which reached around US$4 billion or equivalent to Rp58.6 trillion (excluding tax) and around US$1.7 billion or equivalent to Rp24.1 trillion (excluding tax) in 2018 and 2019.

According to Martini, the government’s support will continue in 2022 through a policy revision that will stipulate Pertalite (RON90) as a Special Assignment Fuel in place of Premium (RON88) and an adjustment to the price of Pertamax.

As Pertamina’s appreciation for this support, several initiatives in the downstream sector have been implemented that simultaneously respond to market changes, such as an expansion of digital transactions, acceleration of Pertashop outlets to capture larger market opportunities in rural areas, and diversion of gas station energy sources to solar panels.

We appreciate the government and the DPR’s decision, which has increased the budget ceiling for subsidies and compensation for 2022 to maintain and protect people’s purchasing power and contain potential inflation. This is a support for Pertamina in providing energy amidst the challenges of high crude oil prices,” Martini said.

With this support, in 2022, Pertamina will make efforts to increase oil and gas production by 17 percent, targeting 79.9 percent Valuable Product Yield, adding around 3 thousand Pertashop fuel outlets, developing digital markets for up to 25 million MyPertamina users, and increasing revenue from non-captive markets in the shipping business to 7.5 percent.

To strengthen its commitment to low-carbon energy, it will produce 7,138 GWh of electricity, which will be supported by a targeted increase in the installed capacity of up to 2.9 GW. Another important strategy will be unlocking the value developed by subsidiaries.

“In the financial sector, we will focus on optimizing costs targeted to reach up to US$600 million. We will continue to communicate with the government to ensure a good decision for the company,” Martini said.Jakarta (ANTARA) – State-owned oil and gas firm PT Pertamina (Persero) succeeded in achieving cost optimization of US$2.21 billion in 2021 amid high global crude oil prices.

“Through this business strategy, in 2021, Pertamina succeeded in cost optimization of US$2.21 billion, obtained from the cost savings program (cost-saving) of US$1.36 billion, cost avoidance of US$356 million, and additional revenue (revenue growth) of around US$495 million,” director of finance of Pertamina, Emma Sri Martini, said in Jakarta on Tuesday.

Martini explained that Pertamina has developed several policies and business strategies from the financial and operational perspective to face the increasing global oil price challenges.

Pertamina is strengthening its financial strategy and operational efforts to improve efficiency across business lines, both holdings and sub-holdings and from upstream processing to downstream, amid increasing crude oil prices.

From a financial perspective, Pertamina has implemented a cost optimization program across the Pertamina Group, including cost savings, cost avoidance, and increased revenue.

Under the savings efforts, Pertamina is also running a hedging program for market risk management. In addition, the company has centralized procurement, prioritized capital expenditures, and is managing assets and liabilities to reduce costs or interest expenses (cost of funds).

“We are trying to optimize all costs and manage the company’s financial aspects, to reduce costs, including prioritizing projects that have fast results,” she said.

Besides financial tightening, Pertamina is also implementing an operational strategy to increase revenue for its six sub-holdings.

In the upstream business, Pertamina has continued to increase oil and gas production and lifting to take advantage of the increasing oil prices. As a result, production has increased by 4 percent and lifting by 3 percent.

The positive performance from upstream operations has been contributed by Rokan Block and foreign assets and consistent efforts to maintain production levels through well-drilling and resource discovery.

In 2021, Pertamina drilled 12 exploration wells and 350 exploitation wells. In the same year, its discovered reserves (2C) reached 486.70 MMBOE (million barrels of oil equivalent) and additional proven reserves (P1) reached 623.47 MMBOE.

In processing and petrochemicals, in 2021, Pertamina implemented a crude and product optimization strategy. This contributed to an increase in product yield value by around 3 percent.

The strategy is related to the selection and economic substitution of crude oil and maximizing high valuable products with high spreads. In 2021, refinery production also increased in response to higher energy demand due to national economic recovery.

Then, in the transportation and logistics sectors, Pertamina optimized the load factor to achieve revenue and cost-efficiency. In the gas business, Pertamina also increased the gas trade volume and transportation, as well as oil transportation volume.

“And after the legal end state, we will also intensify resource sharing, such as sharing facilities and development agreements, especially in upstream sub-holding,” Martini said.

She added that the positive performance downstream was also supported by the government through the recognition of the difference in compensation for HJE JBT Solar and JBKP Pertalite in 2021, which reached around US$4 billion or equivalent to Rp58.6 trillion (excluding tax) and around US$1.7 billion or equivalent to Rp24.1 trillion (excluding tax) in 2018 and 2019.

According to Martini, the government’s support will continue in 2022 through a policy revision that will stipulate Pertalite (RON90) as a Special Assignment Fuel in place of Premium (RON88) and an adjustment to the price of Pertamax.

As Pertamina’s appreciation for this support, several initiatives in the downstream sector have been implemented that simultaneously respond to market changes, such as an expansion of digital transactions, acceleration of Pertashop outlets to capture larger market opportunities in rural areas, and diversion of gas station energy sources to solar panels.

We appreciate the government and the DPR’s decision, which has increased the budget ceiling for subsidies and compensation for 2022 to maintain and protect people’s purchasing power and contain potential inflation. This is a support for Pertamina in providing energy amidst the challenges of high crude oil prices,” Martini said.

With this support, in 2022, Pertamina will make efforts to increase oil and gas production by 17 percent, targeting 79.9 percent Valuable Product Yield, adding around 3 thousand Pertashop fuel outlets, developing digital markets for up to 25 million MyPertamina users, and increasing revenue from non-captive markets in the shipping business to 7.5 percent.

To strengthen its commitment to low-carbon energy, it will produce 7,138 GWh of electricity, which will be supported by a targeted increase in the installed capacity of up to 2.9 GW. Another important strategy will be unlocking the value developed by subsidiaries.

“In the financial sector, we will focus on optimizing costs targeted to reach up to US$600 million. We will continue to communicate with the government to ensure a good decision for the company,” Martini said.

Contact: Fajriyah Usman, VP Corporate Communications, PT Pertamina (Persero)
M: +62 858 8330 8686, Email: fajriyah.usman@pertamina.com, URL: https://www.pertamina.com
Written by: Azis Kurmala, Editor: Suharto (c) ANTARA 2022

State-owned oil and gas firm PT Pertamina (Persero) posted a record net profit of Rp29.3 trillion in 2021 following a successful business transformation.

The 2021 transformation helped push up its consolidated net profit (audited) to US$2.046 billion or around Rp29.3 trillion, president director of Pertamina, Nicke Widyawati, said in a statement issued in Jakarta on Tuesday.

The figure was almost double compared to the 2020 net profit of Rp15.3 trillion and exceeded the 2021 Corporate Work Plan and Budget (RKAP) target by 154 percent.

In 2021, Pertamina transformed its business by increasing efficiency and production, carrying out energy transition, developing oil and gas infrastructure, and implementing the Refinery Development Master Plan (RDMP) project.

Widyawati said Pertamina’s successful transformation in 2021 was owing to the formation of the oil and gas holding with six sub-holdings: upstream sub-holding, refining and petrochemical sub-holding, commercial and trading sub-holding, gas sub-holding, integrated marine logistics sub-holding, and new and renewable energy sub-holding.

“This transformation is a strategic step to adapt to future business changes, moving more agile and faster, focusing on broader and aggressive business development,” Widyawati said.

Pertamina’s positive financial performance was also demonstrated by earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$9.2 billion.

This shows that Pertamina’s finances are in a healthy (AA) and safe condition amid the disruption and geopolitical challenges affecting the global oil, gas, and energy industry, Widyawati said.

Pertamina’s net profit was the consolidated profit of all subsidiaries from upstream, processing, to downstream.

Most of the profit was contributed by the upstream sector’s revenue, which surged due to rising Indonesian crude prices (ICP). The downstream sector remained under pressure from the high cost of fuel production, the largest component of which is crude oil, Widyawati said.

In 2021, upstream oil and gas production increased from 863 thousand oil barrels equivalent per day (MBOEPD) in 2020 to 897 MBOEPD. Thus, Pertamina contributed more than 60 percent to national oil and gas production.

In addition, with Pertamina’s massive drilling, production at Rokan Block also increased. Various efficiency programs also resulted in cost savings of US$1.4 billion.

Fuel production was also achieved according to the target, so there were no additional imports. Since April 2019, Pertamina is no longer importing solar and Avtur fuel, Widyawati said.

Pertamina has also completed the construction of two giant oil and gas tankers, namely VLCC Pertamina Pride and Pertamina Prime, which will be used for the global market.

Meanwhile, to improve fuel supply reliability in Eastern Indonesia, Pertamina has built and operated 13 new fuel terminals.

Pertamina is also running National Strategic Projects (PSN), including the Balikpapan RDMP Refinery (47 percent completion), Balongan RDMP refinery (68.5 percent completion), Cilacap Green Refinery, Tuban GRR Refinery, as well as other priority projects to strengthen Pertamina’s petrochemicals business such as Polypropylene Balongan, Revamping Aromatic TPPI, and Olefin TPPI, she said.

Integrated digitization from upstream to downstream has been one of the keys to Pertamina’s successful controlling of the production and distribution of fuel, as well as the improvement in the service quality to the community.

Through its Integrated Command Center, all operational activities can be monitored online and in real-time. The use of MyPERTAMINA application for cashless payments is increasing, and currently, it has reached more than 22 million users, Widyawati informed.

With the 2021 new energy development, in addition to the Biosolar B30 production, the Cilacap Refinery has succeeded in producing renewable diesel (100 percent biodiesel), with a capacity of 3 thousand barrels per day.

Contact: Fajriyah Usman, VP Corporate Communications, PT Pertamina (Persero)
M: +62 858 8330 8686, Email: fajriyah.usman@pertamina.com, URL: https://www.pertamina.com
Written by: Azis Kurmala, Editor: Suharto (c) ANTARA 2022