Aggressive Efforts to Increase Company Value: PHE Intensifies Unlock Value Strategy to Safeguard National Energy Resilience

July 28, 2023 - PT Pertamina (Persero) continues to drive its subsidiaries to enhance the company's value. In the Oil and Gas Upstream sector, PT Pertamina Hulu Energi (PHE), as Pertamina's upstream subholding, is actively engaged in unlock value activities. These efforts include increasing oil and gas production, global expansion, acquisitions, and studying new business development in CCS/CCUS to maximize asset value and boost production.

"This strategy is to support the National oil production achievement target of one million barrels per day (bpd) and 12 billion standard cubic feet per day (bscfd) of gas by 2030, for national energy resilience," stated Fadjar Djoko Santoso, VP Corporate Communication of PT Pertamina (Persero).

Fadjar explained that PHE's strong fundamental condition supports the unlock value strategy. Fundamentally, PHE is in an excellent state, as evidenced by its performance in 2022, with a remarkable 7% growth in oil and gas production compared to the previous year, resulting in a net profit of US$ 4.67 billion. "This is one of Pertamina's successful transformation proof in the Oil and Gas Upstream sector," he added.

Fadjar further mentioned that PHE also received 85.05 score or "excellent" in the 2022 GCG (Good Corporate Governance) assessment. Additionally, PHE achieved an ESG rating of 31.2, or 13th rank out of 143 oil and gas companies worldwide. "Furthermore, PHE's positive performance had a significant impact on the national revenue in 2022, amounting to US$ 8.77 billion, comprising both tax and non-tax revenues," he said.

These achievements are the result of PHE's efforts in managing its core strategies, including baseline production management, enhancing production growth through work plans, mergers & acquisitions, and increasing reserve & resource growth while prioritizing Environmental, Social, and Governance aspects.

Regarding PHE's IPO plan, Fadjar Djoko Santoso, Vice President Corporate Communication of Pertamina, explained that the IPO for PHE is not currently taking place as it requires finding the right timing. "This is in line with the resolution conveyed by the Ministry of State-Owned Enterprises through the Deputy Minister of State-Owned Enterprises some time ago," he stated.

Furthermore, Fadjar explained that several factors were considered, including the dynamics of the world and Southeast Asian capital markets throughout 2023, due to the influence of global recession pressures.

In the global macroeconomic context, the increasing Fed's interest rates add economic burdens on emerging markets to maintain economic growth rates. On the other hand, world oil prices (Brent) have decreased compared to the previous year, hovering around US$ 70-80 per barrel in recent months, and are predicted to remain at that level until 2024. These factors also hinder the favorable implementation of PHE's IPO at present.

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.**