The upstream sector accounted for the largest share of state-owned oil and gas firm PT Pertamina’s (Persero’s) net profit as Indonesian crude prices (ICP) soared in 2021.
Pertamina Hulu Energi Offshore Southeast Sumatra (PHE OSES) well in Seribu Islands waters off North Jakarta’s coast (ANTARA FOTO/M Risyal Hidayat/rwa)
“The overall profit earned is a combination of the six sub-holdings and their subsidiaries, but the largest contribution to the net profit comes from the upstream sector due to the windfall from the increase in ICP prices,” acting vice president of corporate communications at Pertamina, Heppy Wulansari, said in Jakarta on Tuesday.
Reporting its 2021 fiscal year performance to the government, which is a shareholder in the company, Pertamina said it scored a net profit of Rp29.3 trillion.
The majority of this profit was obtained from the upstream sector’s revenue, which increased sharply. Meanwhile, the downstream sector experienced losses due to the increase in crude oil prices and as Pertamina’s fuel prices remained below the market price.
This was an advantage for Pertamina, which has an integrated business from upstream to downstream, which allows cross-subsidies. Thus, it could maintain the balance between profits and public service bonds.
Wulansari said that Pertamina’s financial performance was positive, with almost doubled profit in the 2021 fiscal year.
This profit was consolidated profit from all Pertamina business lines from upstream, processing, and downstream.
As for the downstream sector, especially fuel and LPG marketing and distribution, at this time, the status is still at a loss due to the high cost of fuel production as the largest component is crude oil.
“However, Pertamina really appreciates the government’s full support through the payment of assignment fuel compensation and the addition of energy subsidies in the 2022 State Budget. This is very meaningful to maintain people’s purchasing power and encourage economic recovery,” Wulansari said.
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.
Pertamina. gas station ANTARA/HO – PT. Pertamina Patra Niaga Regional Kalimantan.
“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.
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.
President director of Pertamina, Nicke Widyawati, addressing an online press conference on Pertamina’s participation in the Dubai Expo, which was accessed from Jakarta on March 18 (ANTARA/HO-Pertamina)
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.
The B20 ESC (Energy, Sustainability & Climate) Task Force held the 3rd ESC Task Force Online Meeting on Tuesday to discuss Policy Action that will be recommended at the upcoming G20, as noted in a release issued by PT Pertamina on Friday. The B20, or Business 20, is a G20 outreach group that represents the international business community.
The B20 ESC (Energy, Sustainability & Climate) Task Force held the ‘3rd Task Force Call Meeting’ on Tuesday, April 19, 2022. (Antara/HO-Pertamina)
The B20 ESG Task Force, led by Pertamina, the largest Energy SOE (State-Owned Enterprise) in Indonesia, and Pertamina President Director & CEO Nicke Widyawati, the ESC Task Force Chair, continues to update policy design and policy action, calling for efforts to maintain energy, sustainability and climate change mitigation.
The ESC Task Force Online Meeting was attended by around 140 participants including ESC Task Force Deputy Chair, Agung Wicaksono, ESC Task Force Policy Manager, Oki Muraza, 8 ESC Task Force Co-Chairs, as well as members from 19 industries and 25 countries.
Widyawati invited members of the Task Force to discuss policy design and to explore actionable policy initiatives. “To date, we have received more than 300 comments and inputs that are very constructive and helpful for us to drafting policy. Through the active involvement of all participants, I am confident that this task force will provide relevant and actionable policy recommendations to the G20 leaders.”.
She said that the meeting had gathered recommendations from the B20 Secretariat which would later be added to several new policy actions to be discussed in more depth to suit the focus and collective needs that represent the interests of the G20 Community as a whole.
“Let’s work together to create and deliver the legacy of Indonesia’s G20 presidency this year, both through policies and a series of side events on the real action of the task force, so that we can be fruitful and give the best to the G20,” said Widyawati.
Widyawati also expressed hope that the main objective of the ESC Task Force, ensuring an inclusive process in developing policy recommendations and actions, will be achieved through meetings and discussions.
Task Force Policy Manager Oki Muraza explained that there are currently 12 main policy action inputs, from 14 policy actions discussed in the previous call meeting.
Task Force Deputy Chair Agung Wicaksono explained that the Task Force was striving to develop partnerships and collaborations, develop technology to carry out capacity building in various countries, and increase values to attract investment and financing access.
“To achieve these goals, we invite the realization of a corporate agreement and pilot project in the country, and we targeted to have it completed in September or October 2022,” he said.
The B20 Secretariat offered green energy transition recommendations toward the G20 high-level meeting in Bali in November 2022. The recommendations included accelerating the transition to sustainable energy use, ensuring an adjustable and affordable transition, and welcoming global cooperation on enhancing energy security.
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: Sri Haryati (c) ANTARA 2022
The B20 Energy, Sustainability & Climate Task Force, led by state-owned oil giant PT Pertamina (Persero), has provided policy recommendations and actions for sustainable energy transition. The statement was delivered by Chair of B20 Energy, Sustainability, and Climate Task Force Nicke Widyawati during the 3rd stakeholder consultation task force energy, sustainability and climate sustainable finance held virtually on Friday (18/3).
President Director & CEO Nicke Widyawati delivers a speech as Chair of B20 Energy, Sustainability and Climate Task Force at the 3rd stakeholder consultation task force energy, sustainability and climate sustainable finance held virtually (18/3) (Antara/Azis Kurmala)
The Business 20, or B20, is an outreach group from the G20 that represents the international business community. “So as part of engaging group in the G20, the B20 Energy, Sustainability & Climate Task Force will provide policy recommendations and actions for sustainable energy transition with three focus on part of priority issue that trigger to the outline of President Joko Widodo’s directive,” Widyawati, concurrently the president director and CEO of PT Pertamina, stated.
In accordance with the directive President Joko Widodo had delivered at the G20 Summit last year, the G20 must become the curtains for bringing recovery and going hand in hand with the principles of energy security, energy equity, and environmental sustainability, she said. To this end, there were three focus areas.
First, accelerating the transition to sustainable energy use by enhancing global cooperation to accelerate the transition to sustainable energy use by reducing carbon intensity of energy use.
Second, ensuring a just, orderly and affordable transition by enhancing global cooperation to assure sustainable energy use across developed and developing countries, she said.
Third, enhancing global cooperation on increasing consumer level energy security by improving access to energy and ability to consume clean and modern energy.
The task force is aware of the importance of ratification of renewable energy based generation and energy efficiency as the main pillars of the energy transition and investment in technology and energy sector. The B20 Energy, Sustainability & Climate Task Force becomes a very valuable source for a range of perspectives, she said.
She stated that rising greenhouse concentration in the atmosphere is causing global warming leading to climate change, ocean acidification and biodiversity losses. “The largest contribution to greenhouse gas emission comes from the energy sector which makes the transition to sustainable energy use becomes the most critical challenges of our time,” Widyawati said.
The Intergovernmental Panel on Climate Change (IPCC) estimates and indicates that the global average temperature last approximately 1.1 degrees Celcius above the industrial level. The consensus limit to avoid catastrophe climate change is being limited to a maximum of 1.5 degrees Celcius, she said.
“So there is a limitation period that we have to take drastic action to accelerate net-zero emission and to curb greenhouse gas emission,” she said, adding that the carbon emission contribution from energy is in the range of 20 percent up to 36 percent compared to the deforestation which is in the range of 44 percent up to 62 percent, she said.
However, Widyawati emphasized, this cannot be an excuse for industry players especially in energy sector to not take part in reducing greenhouse gas emission. She said that global cooperation for government capacity enhancement institutionally formed market development, sharing of technology, and financing.
“In our policy recommendations, several parties involved in the energy, sustainable and climate task force G20 include co-chair from g20 business actors as well as more than 140 members that provide inputs in the directions of the policy recommendations and issue priority. The most important thing is aligned with stakeholders so the proposed policy recommendations and actions from our task force will be aligned with the directions of Indonesia’s policy in G20,” Widyawati said.
She said that the stakeholder consultation event aims to obtain inputs from the stakeholders especially regarding sustainable finance. The policy recommendations represented the views of business actors and finance sector institutions, she stated.
Meanwhile, B20 Indonesia Sherpa Rizal Affandi Lukman said that the continuous task force discussion was definitely important to collect relevant information, ideas and insights from a wide range of relevant stakeholders.
“We all have priority topics to be the basis of our works. However, without inputs from people who know exactly the trends of potential challenges on the ground as well as from different angels and perspectives, the recommendations will be just nice to read on the paper,” Lukman said.
The issues on energy, sustainability and climate are very relevant to many parties this day. B20 Indonesia is keen to hear the stakeholders’ concerns, feedbacks on numerous issues such as decarbonization, climate investment and financing carbon market ecosystem, and how sustainability project are reported and accounted, Lukman said.
This is a good example of inclusive and collaborative policy formulations, he added.
State-run oil and gas corporation PT Pertamina (Persero) has set a more comprehensive energy transition as the company’s priority program by increasing the energy mix to reduce greenhouse gas emissions. “Pertamina is committed to becoming an environmentally friendly and socially responsible company, which upholds good corporate governance,” President Director Nicke Widyawati noted in a statement on Monday.
President Director & CEO Nicke Widyawati delivers her remarks at the Pertamina-Dubai Expo Media Briefing on March 18, 2022. (ANTARA/HO-Pertamina/uyu)
According to the statement, the company has played an important role in leading the green transition in Indonesia’s energy industry and targets a 30-percent reduction in emissions by 2030. It will prioritize the development of new and renewable energy to overcome environmental problems and support the realization of Indonesia’s energy mix in 2030.
Pertamina supports the Indonesian 2022 G20 Presidency which has chosen energy transition as one of the agendas of the inter-governmental forum. As a member of the G20’s Business 20 (B20) Task Force on Energy, Sustainability, and Climate, Pertamina will strive to become a catalyst for green policy in accordance with the principles of energy security, energy equity, and environmental sustainability.
Nicke remarked that Pertamina implemented 8 strategic initiatives to develop environmentally friendly and sustainable energy. The initiatives include establishing green refineries, developing bioenergy, commercializing hydrogen, increasing gasification, initiating battery and integrated energy storage ecosystems, as well as increasing the capacity of installed geothermal power plant.
“We believe that Indonesia’s abundant geothermal resources can become a strong backbone in expediting the energy transition program in line with the government’s goal of achieving net zero emissions in 2060,” Widyawati added.
PT Pertamina (Persaro), the state-owned energy company serving Indonesia as well as international markets, has set several initiatives to accelerate its energy transition toward the 2030 target energy mix and to reduce emissions, ensuring sustainability.
The screenshot of Pertamina’s Senior Vice President of Investment Management Daniel Purba at the virtual Media Briefing Pertamina-Dubai Expo, Jakarta, Friday (3/19/2022). (ANTARA/Katriana)
“Pertamina is fully committed to ensuring that we manage sustainability issues properly, aligned with international standards,” Pertamina’s Senior Vice President of Investment Management Daniel Purba stated during a virtual media briefing for Indonesia – Dubai Expo on Friday.
Pertamina has set environmental targets including reducing 2030 emissions by 30 percent to address the climate change, reducing the environmental footprint by complying with water and waste management practices, and protecting biodiversity by providing a net positive biodiverse impact, as well as other sustainable targets.
Pertamina’s strategies to drive green energy are executed through priority initiatives, including a net zero roadmap, conducting decarbonization, and improving the new and renewable energy capacity with an allocated CAPEX of 14 percent for clean, new and renewable energy. Pertamina’s commitment aligns with efforts to use domestic resources to supply domestic energy for green development and decarbonization.
Moreover, to drive new and renewable energy growth in Indonesia’s energy mix, Pertamina has also developed several projects and activities to expand the green energy portfolio, one of which is enhancing capacity from 672 megawatts (MW) in 2020 to 1,128 MW in 2026.
Pertamina has also lowered emissions by 27 percent during the 2010-2020 period in its efforts to reduce emissions, and to support Indonesia’s Nationally Determined Contribution (NDC). The target increases to 29 percent by 2030.
Also present at the media breifing, Pertamina Geothermal Energy (PGE) President Director Ahmad Yuniarto highlighted Pertamina’s commitment to developing and generating clean and green power from geothermal resources to drive green energy expansion.
Geothermal Energy (PGE) is in a good position to contribute further to emission reduction and decarbonization. Yuniarto stated that PGE had managed 14 Geothermal Working Areas, with a total installed capacity of 1.877 MW, from Aceh, along Sumatra Island, Java, Bali, and North Sulawesi.
“If you follow the ring of fire, you will find us,” he remarked. “PGE set three approaches: the co-generation approach, including steam and hot brine production to generate green electricity; the co-production approach, studying how to utilize CO2 and extract rare earth elements such as lithium, to produce green hydrogen; and the co-development approach, looking into development of the geothermal area to become ecotourism destination.
“We believe that through these three approaches of co-generation, co-production, and co-development, we are in a very good position to create more value from the geothermal resources that we have,” he affirmed.
State-owned PT Pertamina (Persero), an energy company that has been active in the global arena, reaffirmed its commitment as a company that cares about the environment, social aspects and good corporate governance, setting the energy transition program as the company’s top priority.
President Director & CEO Nicke Widyawati outlined Pertamina’s strategic initiatives for developing environmentally friendly and sustainable energy at the Indonesia – Dubai Expo media briefing on Friday. (ANTARA FOTO/ADWIT B PRAMONO)
“Pertamina is committed to being known not only as a global energy player but also as an environmentally friendly company, socially responsible and upholding good corporate governance,” said Nicke Widyawati, CEO of PT Pertamina (Persero) at the Indonesia Pavilion – Dubai Expo, on Friday (18/3).
Pertamina has played an important role in the transition of Indonesia’s energy industry by targeting the energy mix and reducing emissions, with a comprehensive reduction of GHG emissions by 30% before 2030. In addition, Pertamina will prioritize the development of New and Renewable Energy (EBT) to address environmental problems, which is in line with Indonesia’s Energy Mix by 2030.
Pertamina also supports Indonesia’s G20 Presidency, which targets energy transition as one of its main priorities. As part of the Business 20 Task Force on Energy, Sustainability, and Climate, Pertamina shares the priorities of G20 Indonesia as a catalyst for green recovery, along with the principles of energy security, energy equity and environmental sustainability.
Strategies include the development of green refineries and bioenergy, and the commercialization of hydrogen, while Pertamina has also continued to increase the use of new and renewable energy as well as implement carbon capture, utilization, and storage (CCUS) to increase production in several fields, she informed.
Widyawati said that Indonesia’s geothermal resources are abundantly spread across the Ring of Fire. Hence, she believes that these resources could be a strong backbone to accelerate the energy transition, which is in line with the government’s goal to achieve net-zero emissions.
“We believe that by realizing strategic programs in collaboration with many partners across countries, energy sustainability is not merely just a discussion, but also a concrete action in which the impacts can be experienced by everyone,” said Nicke, concluding her remarks.
To be presented at the G20 high-level meeting in Bali in November 2022
The B20 Energy, Sustainability & Climate Task Force, led by the largest Energy State-Owned Enterprise in Indonesia PT Pertamina(Persero), has proposed three green energy transition recommendations to be presented at the G20 high-level meeting in Bali in November 2022.
President Director of state-owned oil giant Pertamina Nicke Widyawati delivers a speech as Chair of B20 Energy, Sustainability and Climate Task Force at the B20 inception meeting in Jakarta on January 28. (ANTARA/HO-Pertamina)
The three recommendations were agreed upon during the Business 20 (B20) Inception Meeting held virtually at the end of January 2022, as noted in a release issued by PT Pertamina and received here on Thursday.
The Business 20, or B20, is an outreach group from the G20 that represents the international business community.
Chair of B20 Energy, Sustainability, and Climate Task Force Nicke Widyawati emphasized the importance for Indonesia to transition to green energy as mandated by President Joko Widodo.
According to Widyawati, the energy transition effort is a challenge for all, but it should also be viewed as an opportunity to create sustainable economic growth in future by implementing good established scenarios and roadmaps, especially with regard to the financial aspects.
“The B20 Energy, Sustainability and Climate Task Force has the same priorities as Indonesia’s G20 presidency in which we must be a strong green energy catalyst and go hand in hand with the principles of energy security, energy equity, and environmental sustainability,” Widyawati, concurrently the president director of state-owned oil giant Pertamina, stated.
She further noted that the Task Force will formulate some policy recommendations for sustainable energy transition, with focus on three priority issues.
First, the Task Force will put forth the recommendation on accelerating transition to sustainable energy use in order to ensure that global warming is limited to a maximum of 1.5 degrees Celsius.
With regard to such a recommendation, the main efforts identified for the energy transition policy is the development of alternative fuel industries around the use of hydrogen and biofuels.
The second issue for recommendation is to ensure a fair and affordable way of transition as well as global cooperation on impact mitigation and support for adaptation to changes brought about by energy transition.
The third is global cooperation in increasing energy security for households and MSMEs as a means to end extreme poverty and accelerate energy transition to sustainable energy use.
“Those three priority issues will form the basis for formulating policy recommendations from the Energy, Sustainability and Climate Task Force by considering other critical issues, such as carbon pricing, global cooperation, livelihoods, and institutional development for financing and technology adoption,” Widyawati explained.
She also stated that energy is a binding constraint for sustainable economic growth and is a crucial matter for economic development to recover from the impact of the COVID-19 pandemic.
She also emphasized that urgent and focused action was currently needed to address various global challenges, including the lagging rate of energy transition, climate change due to anthropogenic greenhouse gas (GHG) emissions that have become a critical issue, and economic growth depending on fossil fuel energy consumption that contributed to most of the GHG emissions.
Widyawati also pressed for expediting energy transition globally while continuing to increase energy security and equity in an effort to sustain economic growth and reduce extreme poverty.
In addition, the financing gap must be bridged and investment must be shifted more to the energy transition infrastructure that can be paid for by carbon pricing, she remarked.
Widyawati also accentuated the importance of ensuring energy equity by increasing access to and affordability of clean and modern energy that is not only essential for a successful transition but also delivers environmental and economic benefits.
“Renewable energy-based power generation, electrification, and energy efficiency are the main pillars for faster energy transition, technology investment, and energy transition sector,” she stated.
“However, developing countries still lack frameworks, well-established governance, markets, advanced financial services, trained workforce, and access to advanced technology. Those aspects are needed for changes (in energy transition), and all of them are owned by developed countries,” she remarked.
At the B20 Inception Meeting, the Task Force Deputy Chair Agung Wicaksono stated that in order to seek inputs from businesspersons, the Task Force had also conducted a survey.
The survey covers 13 potential issues: institutional development, global cooperation, alternative energy sources, differential rates per sector, prevention of new carbon lockouts, carbon pricing, mitigation of financial impact, mitigation of loss of livelihoods, standardized ESG frameworks, ensuring orderly transitions, increasing access, affordability and adoption of end-user technologies.
Wicaksono stated that the survey results became the basis for the Task Force to formulate recommendations.
He also acknowledged that the energy transition efforts will require structured and committed global cooperation in improving governance capacity, supporting market development, channeling finance and technology, and upgrading workforce skills.
“The spirit, hard work, and commitment of this meeting continues, and it will bring global change for the better after the COVID-19 pandemic, so that we can Recover Together, Recover Stronger,” he remarked.
Written by: Yuni Arisandy Sinaga, Editor: Fardah Assegaf (c) ANTARA 2022
“Our expansive plan will help Indonesia to achieve the net zero emission target by 2060.”
Pertamina Geothermal Energy (PGE) has planned to expand its installed geothermal power plant capacity in order to provide greater contribution to the reduction of greenhouse gas emissions in Indonesia, and support achieving the sustainable development goals (SDGs) on climate action, through implementing Environmental, Social, & Governance (ESG) based programs.
PT Pertamina Geothermal Energy’s (PGE’s) geothermal power plant. [ANTARA/HO-PGE]
“Our expansive plan will help Indonesia to achieve a net zero emissions target by 2060,” said the Chief Financial Officer (CFO) of Pertamina Geothermal Energy, Nelwin Aldriansyah, during a discussion session at the UN Global Compact on responsible business conduct and climate ambition, held virtually on Wednesday, Nov 10.
The UN Global Compact is a “voluntary initiative based on CEO commitments to implementing universal sustainability principles, and taking steps to supporting UN goals. Pertamina reiterates its commitment to achieving SDGs through the implementation of Environmental, Social, and Governance (ESG) based programs in their operational areas.”
According to Aldriansyah, PGE is planning to issue its own wind green bonds in the first half of next year (2022) in addition to PT Pertamina’s plan to issue green bonds in 2022. “Proceedings of green bonds will be used to refinance our existing conventional loans and also to finance our capex (capital expenditure) plan in developing new geothermal projects in Indonesia,” he said.
With such an initiative, PGE would be expected to gain an additional 375 megawatts (MW) over the next four years, from the current installed capacity at its geothermal power plant of 672 MW.
“We are aiming to have a total installed capacity to 1,500 megawatts by 2030,” Aldriansyah remarked. He expressed optimism that with such an additional capacity, PGE would contribute significantly to Pertamina’s plan to decarbonize its assets and reduce emissions by 30 percent by 2030.
“At our current capacity, we currently reduce emissions by about 3.5 million tonnes of carbon dioxide (CO2) per annum. And with the additional capacity, we expect to reduce the emissions further, to six million tonnes annually over the next four years, and to 12 million tonnes by year 2030,” he stated.
Aldriansyah stated that the government of Indonesia aims to improve its energy mix with the use of renewable energy sources from the current 12 percent to 23 percent by 2025. He expressed confidence that the increased use of energy mix would provide ample room for renewable energy companies such as Pertamina Geothermal Energy to expand installed capacity and provide higher contributions to emissions reduction.
The CFO believes that financing plans, including the issuance of green bonds next year, can support the capacity growth in the future, which will contribute significantly to Pertamina’s objective to decarbonize its asset portfolio. “It is also aligned with the Indonesian Government’s commitment to Paris Agreement,” added Aldriansyah, “And with goal No.13 of the sustainable development goals (SDGs) on climate action.”
