Inaugurates Subholding, Pertamina Ready to Pursue Target Market Value of US$100 Billion

Jakarta, September 10, 2021 – After completing the restructuring process through the signing of a number of legal end-state documents in early September, PT Pertamina (Persero) strengthen its determination to pursue the stakeholders’ aspirations to achieve US$100 billion market value and Global Energy Champion by 2024.

This determination is reflected in the inauguration of the 6 Subholdings through the theme of “Moving Forward Becoming Global Energy Champion”, held by Pertamina on September 10, 2021, in Jakarta. The inauguration was carried out directly by the Minister of SOE, Erick Thohir, accompanied by the Deputy Minister of SOE 1, Pahala Nugraha Mansury, President Commissioner of Pertamina, Basuki Tjahaja Purnama, and President Director of Pertamina, Nicke Widyawati.

Minister of SOE, Erick Thohir said that in the past eight months, the Ministry of SOE has continued to transform SOEs that are included in the 88 strategic SOE projects until 2023 that have been conveyed to President Joko Widodo.

“From the 88 projects that we have targeted, thank God, 90 percent of it happened this year. And of course, many of these transformations are in Pertamina,” said Erick.

Erick added, the President expects Pertamina to continue improving public services, but the most important thing is to develop the ecosystem so that Pertamina can compete and encourage added value. He also reminds that the current leaps must be maintained and in line with the 5 Key Performance Indicators in the Ministry of SOE, namely balancing corporations and public services, returning to the core business, and being excellent, digital innovation and R&D to make Pertamina Technology Company, and transforming Human Capital.

“Prove to the world, Indonesia can also have a company whose valuation reaches USD 100 billion. We can, and I believe this legacy is for all of us. I ensure that the transformation will continue because this is the most important part of us as a great nation. It is impossible for us to continue to be a great nation if there is no energy security,” added Erick.

At the inauguration ceremony, President Director of Pertamina, Nicke Widyawati said that the oil and gas holding that was formed in 2018 continues to run. Although last year the world was hit by the COVID-19 pandemic. However, according to the direction of the stakeholders, the transformation agenda must be continue and even be accelerated.

"I would like to thank the Minister as a stakeholder who brought this agenda to meetings of fellow ministries and to the exclusive meeting (Ratas), so that various regulations were finally succeeded to be obtained at the end of August,” said Nicke.

According to Nicke, the transformation that was run by Pertamina is in line with the global transition that is taking place, where the Government is committed to make an energy transition in accordance with the Paris Agreement. Therefore, Pertamina must support this step, because Pertamina is the only state-owned company that is integrated from upstream to downstream which is a mainstay and makes a major contribution to energy supply for the country.

Nicke said Pertamina has 3 tasks that must be carried out in parallel, which are Pertamina must provide and distribute for all Indonesian people and also the industry. However, Pertamina is also challenged to make a development and to take a step in answering the energy transition. 

"How do we do it? We divide Pertamina's large vessels into six smaller vessels, which we call Subholding. Someone's on duty today. Some are tasked with exploring transitions in different seas. And some have to change ships on the other side of the ocean," she said.

She explained that the 3 Subholdings, namely Upstream Subholding, Refining & Petrochemical Subholding, and Commercial & Trading Subholding, must continue to carry out their current duties.   Because, according to Energy Law, Pertamina has a mandate to maintaining reliability or availability, accessibility, affordability, acceptability, and sustainability. For this reason, Pertamina's investment is 55% in the existing business line because Indonesia has reserves that must be optimized.

Meanwhile, Subholding Gas will move to the center to manage transitional energy from fossil fuels to new and renewable energy, namely gas, with a portion in the energy mix remaining at around 22% to 25%. With a 5-fold increase in energy demand in the next 5 to 10 years, the share of this gas must be increased. Currently, Pertamina has a gas pipeline of 24 thousand kilometers and the longest in Southeast Asia. The key to the strength of the gas business is infrastructure because gas can only be transferred by pipeline.

As for Subholding Power & NRE, it has moved towards renewable energy. Currently, the Government has started to integrate geothermal, which will be the third-largest installed capacity in the world. In the future, Pertamina will integrate upstream Geothermal with downstream, namely Petrochemical.

To support the five Subholdings, Pertamina has an Integrated Marine Logistics Subholding. "This sub-holding must exist in the present, in transition, and the future. It is always relevant because Indonesia is an archipelagic country. Whatever the energy, we still need sea transportation. Now, Integrated Marine Logistics is starting to move towards virtual pipelines," said Nicke.

Responding to doubts regarding the separation of Subholding, Nicke said the key is integrating State-assigned tasks by Holding in operational, commercial, and supervising. Thus, Pertamina as a holding will remain lean with an integration function.

Human resources (HR), according to Nicke, is also relevant in the future. To integrate all existing human resources, Pertamina must also ensure the digitization program runs by establishing the Pertamina Integrated Control Command Center (PICC).

In accordance with that, President Commissioner of Pertamina, Basuki Tjahaja Purnama, expressed his optimism in the restructuring of Pertamina, including human resources transformation in both Holding and Subholding. In addition to supporting quality management and HR performance, Pertamina also continues to develop digitalized business processes, including through the Pertamina Integrated Command Center, digital signatures, digitizing gas stations, and the MyPertamina application.

"We are grateful. I was assigned here with the board of commissioners, we have succeeded in ensuring good cooperation with the board of directors. Now that we have digitalized procurement, we control it well. We also have a digital disposition signature so we can work freely everywhere, and Pertamina is excellent. HR management is also getting better. We continue to support organizational transformation and HR management, including a performance-based assessment system and fair remuneration for employees. I said Pertamina is the top," he said.**