Strengthening Energy Security, Pertamina Group Signs Oil Purchase Agreement

Jakarta, February 1, 2023 - Pertamina continues to improve performance and provide its commitment to support national energy security. It was realized through a Crude Oil and/or Condensate Sale and Purchase Agreement (PJBM) signing between Companies in the Upstream Subholding scope and PT Kilang Pertamina Internasional (KPI) on Tuesday (31/01).

This PJBM signing is Pertamina's Subholding Upstream's commitment to providing crude oil produced to Subholding Refinery & Petrochemical refineries to fulfill national fuel needs. It is part of the subholding contribution to supporting PT Pertamina (Persero) as a State-Owned Enterprise (SOE) to maintain national energy security, independence, and sovereignty.

Present at the event was the President Director of PT Pertamina (Persero), represented by the Director of Logistics and Infrastructure, Erry Widiastono; Director of Development & Production of PHE, Awang Lazuardi, as Acting President Director of PHE; Finance Director of PHE, Harry M. Zen; President Director of KPI, Taufik Aditiyawarman; Feedstock & Product Optimization Director of KPI, Sani Dinar Saifuddin; Regional Director 1 Pertamina Hulu Rokan, Jaffee Arizon Suardin; Regional Director 4 Pertamina EP Cepu, Endro Hartanto; and Director of PT PEPC ADK, Muhammad Arifin.

There were fifteen PJBMs signed. Namely, PHE Ogan Komering, PHE Siak, PHE Kampar, PHE Raja Tempirai, PHE Corridor, PHE Jabung, PHE Kakap, PHE Jambi Merang, Pertamina Hulu Rokan, PHE Tuban East Java, PHE Tomori Sulawesi, PHE Makassar Strait, PHE Salawatin Basin, PHE Salawati, and Pertamina EP Cepu ADK.

The President Director of PT Pertamina (Persero), in her speech read by the Director of Logistics & Infrastructure, Erry Widiastono, conveyed, "PT Pertamina (Persero) is making efforts and investments to increase oil and gas reserves, thereby reducing imports. The challenge faced by Pertamina is how to increase production and reduce imports. To increase economic independence and according to the national energy grand, Pertamina is expected to reduce dependence on imported fuel by optimizing oil and gas production, as well as expanding petrochemicals, which are currently still dependent on imports. The synergy between the Pertamina group a shared commitment in responsibility for meeting national energy needs, maintaining energy independence and sovereignty."

The Director of Development & Production of PHE, Awang Lazuardi, emphasized that the PJBM preparation is one of the implementations of good corporate governance (GCG) aspects and the Arm's Length Principle (principle of fairness and customary business).

Awang further explained that the crude oil and condensate production produced by Subholding Upstream is distributed to Pertamina's refineries to be processed, then consumed by the Indonesian people as final consumers. "Besides being processed into fuel products, crude oil and condensate can also be processed as raw materials for petrochemicals and their derivative products," he explained.

On the same occasion, the Main Director of PT Kilang Pertamina Internasional, Taufik Aditiyawarman, said, "Transactions between KPI and Upstream Subholdings, especially Regions I and IV, during 2022 reached 109 million Bbls. In general, transactions between KPI and Upstream Subholdings throughout 2022 are 42% of all domestic crude oil transactions, and 49% are State Crude Oil and/or Condensate.

Taufik also said that this synergy proves that collaboration between Subholdings is getting more solid and harmonious while prioritizing AKHLAK principles in transactions.

PHE and KPI have been registered with the United Nations Global Compact (UNGC) as participants/members since June 2022. PHE is committed to the Ten Universal Principles or UNGC Ten Principles in its strategy and operations, as part of the Environmental, Social, and Governance (ESG) aspects implementation. PHE and KPI will continue to develop the management of domestic and international operations professionally to realize becoming a world-class oil and gas company achievement that is Environmentally Friendly, Socially Responsible, and has Good Governance.**