Consistently Carrying Out Restructuring, Pertamina Group Operations Are More Efficient & Integrated

Jakarta, June 9, 2021 – PT Pertamina (Persero) consistently carries out corporate restructuring, in which Pertamina forms holding and six sub holdings. After almost one year of restructuring, this step has shown positive benefits with integrated and more efficient operations.

Upstream Subholding, Refining & Petrochemical Subholding, Commercial & Trading Subholding, Gas Subholding, Power & NRE Subholding, and Shipping Subholding, which oversee core business, have focused on managing the company's business and assets according to their respective scopes.

President Director of Pertamina, Nicke Widyawati, explained that the restructuring has resulted in a more solid corporate structure. Therefore, Pertamina's span of control and management of subsidiaries is more optimal. Following the organizational restructuring, there are now just five directorates at the holding level, from previously 11. The organization is leaner also making a decision is faster and more efficient.

"There has been a streamlining, so it is easier for us to manage and formulate strategic plans for the entire Pertamina group business," said Nicke.

As a state-owned enterprise engaged in the oil and gas sector, continued Nicke, Pertamina remains responsible for carrying out its duties and roles following the Energy Law and the SOE Law. However, from a business perspective, with the restructuring, the company's value must increase while remaining committed to carrying out government assignments.

"Operations are handed down to subsidiaries or sub holdings, so the holding is more focused on how we develop the business in the future. The energy transition from fossil fuels will move to new and renewable energy or a green environment. It is the big task at holding, and we have to run it in parallel with strengthening the existing business," added Nicke.

Nicke added that in future business development, from 2020 to 2024, Pertamina plans to invest USD 92 billion. With a leaner structure and a clear holding and sub-holding authority, the decision-making process for investment is more concise. Companies can cut operational costs and save investment costs, one of which is through the integration of business processes from upstream to downstream.

As an example in the upstream sector, in the management of upstream working areas (WK), Pertamina also increases production or lifting targeted by the Government. Previously, WKs did their planning and procurement, post-restructuring could be integrated, such as the procurement of rigs was carried out only once so that it was faster. Likewise, resource management. Previously, with separate WK management, there was a limit of potential reserves not managed because they were on the border.

"With the management of WK on one stretch, currently in the East Kalimantan Region, there are additional reserves of 50 million Barrel Oil Equivalent (BOE) and exploration potential of 200 million BOE in the Java Sea," said Nicke.**