Facing Pandemic Challenges, Pertamina is Optimistic that 2020 Performance is Positive
Jakarta, August 24, 2020 - Amid the challenges of the COVID 19 pandemic that hit the world in 2020, PT Pertamina (Persero) is optimistic and remains consistent in maintaining company operations and energy security so that it can achieve positive performance targets at the end of the year.
Vice President of Corporate Communication of Pertamina, Fajriyah Usman, explained that during the first semester of 2020, Pertamina faced a triple shock. It includes a drop in world crude oil prices, a decrease in domestic fuel consumption, and a movement in the dollar exchange rate, which impacted the rupiah, resulting in a significant exchange rate difference.
"The COVID 19 pandemic has a very significant impact for Pertamina. The decline in demand, the depreciation of the rupiah, and also the very sharp fluctuation of the crude price has greatly affected our financial performance," she said.
According to Fajriyah, the decline in demand can be seen in the national fuel consumption, which until June 2020 was only around 117 thousand kiloliters (KL) per day, decreasing 13% compared to the same period in 2019 which was recorded at 135 thousand KL per day. During the Large-Scale Social Restrictions (PSBB) period in several big cities, demand decreased by 50% -60%.
"However, Pertamina is optimistic that until the end of the year, there will be a positive movement. Therefore, it is projected that profit will also be positive, considering that slowly world oil prices have started to rise and also fuel consumption, both industry, and retail, is also increasing," said Fajriyah.
Fajriyah added, Pertamina's optimism to achieve positive performance at the end of the year was also seen from the positive performance in June 2020 in which the operating profit is USD 443 million and EBITDA of USD 2.61 billion, which shows Pertamina's operational activities continue to run well.
For this reason, continued Fajriyah, Pertamina, has carried out several initiatives for internal improvement while still making savings of up to 30%. Additionally, Pertamina also carried out a priority scale of investment plans, renegotiated existing contracts, and refinancing to obtain more competitive interest costs.
"Pertamina also continues to increase TKDN (Domestic Component Level) to reduce exchange rate pressure and reduce costs in general," added Fajriyah.
According to Fajriyah, even though the company suffered a net loss in the first semester of 2020 compared to the same period last year, Pertamina still provides optimal service to the community so that the national economic movement is maintained.
"Even though demand has decreased, Pertamina's entire business process is running normally. Gas stations are still operating; distribution of BBM and LPG is also well maintained. We prioritize energy availability for the people," said Fajriyah.
Pertamina, continued Fajriyah, also continues to carry out national strategic projects in the upstream sector such as Jambaran Tiung Biru (JTB), continues to drill oil and gas wells that are already running, and continues to complete the RDMP and GRR megaprojects to build national energy security and independence.
"In total, Pertamina Group's oil and gas production for both domestic and international assets reaches 884.1 MBOEPD (thousand barrels of oil equivalent per day). Some of Pertamina's upstream subsidiaries have recorded a positive performance in which they can achieve the production targets," explained Fajriyah.
In line with the New Habit Adaptation (AKB), domestic fuel consumption has increased, from the previously predicted 20 percent decline, now the decline is only around 12 percent.
"The significant increase in fuel consumption shows that the national economy continues to grow in various sectors. Therefore Pertamina is optimistic that the performance at the end of 2020 will remain positive," concluded Fajriyah. **