2023: Pertamina Fulfills the Mandate to Manage Energy across Indonesia

June 10, 2024 - PT Pertamina (Persero) has successfully carried out its role as a state-owned energy company. It is reflected in the achievement of energy production targets and distribution to consumers throughout Indonesia, including the Pertamina fuel and LPG distribution, which reached 98% of Indonesia by the end of 2023 through the BBM 1 Harga, One Village One Outlet (OVOO), and Pertashop program.

President Director of Pertamina, Nicke Widyawati, emphasized that Pertamina's mandate as a state-owned energy company is to maintain national energy security, including providing energy for Indonesia's needs. It is achieved through energy management based on the principles of availability, accessibility, affordability, acceptability, and sustainability.

"In fulfilling this role, Pertamina focuses on its integrated business operations from upstream oil and gas, distribution via various modes of transportation, to processing, ensuring that Pertamina's products meet consumer needs, whether for industry, commerce, households, or communities. Pertamina also has several assignments from the Government to ensure energy equity," explained Nicke after the Annual General Meeting of Shareholders (AGMS) for the 2023 Financial Year at the Ministry of SOEs, Jakarta, on June 10, 2024.

Regarding availability, Pertamina upstream products are the backbone of national energy. Pertamina oil lifting contributes 69% of national crude oil, while Pertamina gas lifting accounts for 34% of national gas. Meanwhile, in the refinery processing, fuel products can meet 70% of national fuel needs, except for diesel and aviation fuel, which is 100% supplied from Pertamina's refineries.

"Efforts to increase oil and gas production continue, including acquisitions and overseas oil and gas expansions, as well as refinery products from the completion of refinery projects," Nicke added.

Regarding accessibility and affordability, Pertamina is committed to increasing energy supply reach to remote areas. In 2023, Pertamina added sales outlets for quality products to villages through the BBM 1 Harga, Pertashop, and OVOO programs. By the end of 2023, 98% of villages in Indonesia had OVOO as an outlet for Pertamina products. Pertamina added 89 BBM 1 Price locations in 2023, totaling 502 locations nationwide.

Efforts are made to ensure accessibility through the Pertamina products distribution via various modes of transportation. Pertamina, through its Integrated Marine Logistics subsidiary PT Pertamina International Shipping, operates 784 vessels (owned and chartered). These vessels have sailed on various domestic routes to remote areas and 50 international routes.

Regarding product acceptability, Pertamina is committed to leading and being the largest contributor to the low-emission business. The geothermal business produces 1,877 Megawatts (MW) of clean energy or 79% of national geothermal production. Pertamina also produces biofuels for several BBM variants, including Biodiesel (B35), Hydrotreated Vegetable Oil (HVO), Pertamax Green 95 (E5), and Sustainable Aviation Fuel (J2.4).

Pertamina is also pioneering the ecosystem for Carbon Capture Storage/Carbon Capture, Utilization, and Storage (CCS/CCUS), hydrogen, natural-based solutions (NBS), and integrated carbon trading. These efforts are part of Pertamina's strategy to reduce carbon emissions. Following the Net Zero Emission (NZE) target, Pertamina is pursuing sustainability by implementing various sustainability-focused programs. Decarbonization innovations from Pertamina Group's internal operations throughout 2023 have reduced carbon emissions from operational activities (scope one and scope two) by 8.5 million tons of CO2, or 34%, from the 2010 baseline.

"In addition to internal emission reduction efforts, we encourage Pertamina's suppliers and third parties to increase their focus on decarbonization, accelerating the achievement of NZE targets," Nicke explained.

Pertamina's scope three decarbonization in the same period reached 32.7 million tons of CO2 from the Biodiesel B35 utilization products.

Vice President of Corporate Communication of Pertamina, Fadjar Djoko Santoso, added that Pertamina's various sustainability efforts have improved Pertamina's ESG (environment, social, governance) rating in 2023, placing first in the Integrated Oil and Gas subsector among 61 global companies, according to ESG Rating agency Sustainalytics. Pertamina's ESG score improved to 20.7 (Medium Risk) by the end of 2023, up from 22.1. A lower Sustainalytics score indicates better risk levels.

"Pertamina's role in energy distribution, including efforts to drive the low-carbon business ecosystem and stimulate national economic growth, is one of the achievements of 2023. It is hoped that in the coming years, Pertamina can further increase its contributions to the country and positively impact the society and the environment," Fadjar added.

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.