66 Years of Pertamina Building Energy and Economic Resilience in Indonesia
Jakarta, December 11, 2023 - Celebrating its 66th anniversary on December 10, 2023, PT Pertamina (Persero) strengthens its State-Owned Enterprise (SOE) role in the energy sector. Pertamina plays a role in maintaining national energy resilience while leading the way in the energy transition to support net-zero emission (NZE) targets in Indonesia.
Pertamina's birthday gift to Indonesia is reflected in its optimal performance in 2023, accompanied by international recognition. Among these, Pertamina secured the number one spot on Environmental, Social, and Governance (ESG) in the integrated oil and gas sector. Additionally, the President Director of Pertamina was selected as one of the top 100 Most Influential People in the World by Forbes and Fortune. In the Fortune's list, the President Director of Pertamina is the only representative from the ASEAN region.
"Throughout 2023, Pertamina has undertaken various business innovations, increased domestic oil and gas production, and expanded its presence internationally. These efforts aim to boost oil and gas production for Indonesia, foster the transition to an energy ecosystem, and develop partnerships with credible business associates. This is done to strengthen the role of Pertamina in Indonesia and enhance its exposure as a global energy company," explained the President Director of Pertamina, Nicke Widyawati.
Pertamina has consistently been listed among Indonesia's companies in the Fortune Global 500. Despite the challenges posed by the COVID-19 pandemic and geopolitical situations affecting other global energy companies, Pertamina has demonstrated remarkable performance, jumping 82 positions to rank 141 in the Fortune 500 announcement for 2023.
Regarding investment objectives, Pertamina is a worthy investment destination, as reflected in its global credit ratings by international credit rating agencies, all of which are at the Investment Grade, namely Moody's at BAA2, Standard & Poor’s at BBB, and Fitch Ratings at BBB.
Besides the business sector, Pertamina’s also increases in the sustainability and ESG sectors. Achieving its vision to be a sustainable company and contributing significantly to Indonesia, Pertamina scored 20.7 (Medium Risk) from Sustainalytics on November 30, 2023. This achievement solidifies Pertamina's position as number one in the integrated oil and gas subindustry, surpassing the scores of various global oil and gas companies.
One of the ESG impacts of Pertamina is the Environmental and Social Responsibility Program (ESRP), where, by the end of 2023, Pertamina has invested in socially impactful initiatives benefiting 344 thousand recipients. Some ESRP programs have contributed to decarbonization, reducing 715 thousand tons of CO2e per year. One program is the Independent Energy Village, implemented in 77 locations across Indonesia as of December 2023.
To encourage the national economy, Nicke added that Pertamina follows applicable regulations. By the end of October 2023, Pertamina had contributed IDR 255.51 trillion through taxes, dividends, Non-Tax State Revenue (PNBP), and signature bonuses, showing Pertamina's compliance with tax payments and other financial aspects.
Pertamina also implements the Domestic Component Level (TKDN), with the consolidated TKDN of the Pertamina Group reaching 72.5% in 2023.
"For Pertamina, sustainability is a strategy to grow the company, improve community welfare, and ensure resilience, self-sufficiency, and energy sovereignty in Indonesia. This sustainable Pertamina program will develop an economy that reaches all communities, has a multiplier effect, and serves as a catalyst for economic development," Nicke said.
Achievements of Pertamina Subholdings
Until October 2023, PT Pertamina Hulu Energi (PHE), as Subholding Upstream, has achieved production exceeding one Million BOEPD (Barrels of Oil Equivalent per Day). The national contribution of PHE is also significant, accounting for 86% of oil lifting and 32% of gas. PHE is also involved in Carbon Capture Utilization and Storage (CCUS) technology development in Indonesia, with the inaugural CO2 injection in the Jatibarang Field, West Java, and the Sukowati Field, East Java.
Meanwhile, the Refinery Development Masterplan Program (RDMP) run by the Refining & Petrochemical Subholding, PT Kilang Pertamina Internasional (KPI), has recorded positive progress. As a crucial national strategic project to enhance the production of high-quality fuel, the Balikpapan RDMP reached 85.9% completion by November 30, 2023. The RDMP aims to increase processing capacity and product quality to EURO V standards. Currently, KPI can meet up to 60% of the national demand for fuel. Specifically for Gasoil and Avtur products, KPI can fulfill the entire national demand, eliminating the need for imports.
Several existing Pertamina refineries are also executing green refinery projects. One example is the Cilacap green refinery, which produces environmentally friendly Hydrotreated Vegetable Oil (HVO) or Biofuel and Sustainable Aviation Fuel (SAF). SAF, derived from a blend of plant-based and fossil fuels, has the potential to decarbonize up to 22 thousand tons of CO2e per year. The aviation fuel has undergone flight testing, demonstrating performance equivalent to conventional aviation. KPI will collaborate with PT Pertamina Patra Niaga in SAF business development.
PT Pertamina International Shipping (PIS), as the Integrated Marine Logistics Subholding, has successfully expanded and doubled its international shipping routes. PIS now operates 869 vessels, including 95 owned tankers, 315 leased tankers, and 459 support vessels. Of these, 59 PIS tankers have sailed in international waters, including the first Dual Fuel VLGC ship in Indonesia, Pertamina Gas Amaryllis, which has reduced emissions by 40%.
In the Gas Subholding, PT Perusahaan Gas Negara Tbk is actively increasing the household gas network (jargas) development. By the end of the third quarter of 2023, jargas have been implemented in 73 cities/districts, with 834,165 household connections using pipeline and beyond pipeline transportation modes. Jargas reduces the government subsidy burden by providing 3kg LPG and supports the transition to net-zero emission energy.
In the Commercial & Trading Subholding, PT Pertamina Patra Niaga ensures energy availability throughout the country. It includes the One Price Fuel Program for the 3T (Outermost, Frontier, and Lagging) communities in 502 locations across Indonesia. Additionally, the Pertashop Program has reached 6,647 Pertashops nationwide, and the One Village One Outlet (OVOO) initiative covers 97% of villages in Indonesia, with 248,992 subsidized LPG outlets and 86,269 non-subsidized LPG outlets. Patra Niaga is gradually improving facilities at gas stations to enhance consumer convenience.
The Power New and Renewable Energy Subholding (Pertamina NRE) plays a role in the energy transition. Pertamina NRE has increased its installed capacity from green energy, particularly Solar Power Plants (PLTS), to 48 Mega Watts peak (MWp), with 43 MWp utilized internally by the Pertamina Group and the remaining 5 MWp for external consumers. This capacity has significantly increased compared to the previous year, which was 28.6 MWp. The PLTS internal use by Pertamina is expected to reach 500 MW gradually. One PLTS program is the installation in the Rokan Working Area (WK) with a capacity of 25 MWp.
For geothermal energy, through PT Pertamina Geothermal Energy Tbk, the installed capacity of Geothermal Power Plants (PLTP) currently stands at 672 MW, with a target of reaching 1 GW within two years. Another devel EBT portfolio developed by Pertamina NRE is clean hydrogen, which plays a strategic role in the energy transition. Green and blue hydrogen can serve as a decarbonization solution for industries facing challenges in decarbonizing their products or production processes (hard-to-abate industry), such as oil refineries, steel industry, heavy industries, and heavy transportation.
Moreover, Pertamina NRE is a pioneer in carbon trading on the Indonesian carbon market (IDXCarbon), selling 864 thousand tCO2e emissions from the Lahendong Unit 5 and 6 geothermal power plants. These carbon credits meet the national standards of the Ministry of Environment and Forestry (KLHK). Pertamina NRE will act as an aggregator in carbon trading, especially for the Pertamina Group and other companies and SOEs.
"The outstanding achievements of Pertamina in 2023 are supported by all officers or workers of Pertamina, located throughout Indonesia and in several Pertamina operational regions abroad. With these 66 years, we believe that the Pertamina Group will continue to grow and make Indonesia proud globally," Nicke explained.
Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.**