Integrated Operation, Pertamina Encourages National Energy Reliability

Jakarta, September 29, 2021 – After the completion of Pertamina Group’s restructuration, the company’s operational are becoming more integrated, thereby encouraging energy reliability and independence throughout the nation. The operational integrator role at the Holding level is carried out by the Logistics & Infrastructure Directorate (L&I Directorate) as the backbone.

Pertamina Group’s I&L Directorate focuses on optimizing the supply and distribution activities, as well as developing logistics infrastructure and synergizing infrastructure development across Sub-Holding. Another important role is overseeing the implementation of all Government Assigned Programs including the National Strategic Program (PSN), and at the same time monitoring the distribution of fuel & LPG, as well as the Domestic Component Level (TKDN).

Pertamina’s Director of Logistics and Infrastructure, Mulyono, emphasized that as Pertamina Group’s operational integrator, the L&I Directorate has an important role in integrating the infrastructure, both the existing and the upcoming roadmaps.

“In order to obtain optimal benefit and cost for Pertamina Group, the roadmap is needed to develop logistics infrastructure that is aligned end-to-end from upstream, midstream, and downstream. It also has to match with the demand for supply & distribution activity, as well as the evaluation of the potential synergy of cross Subholding logistic infrastructure which is in line with energy mix policy in the future,” said Mulyono.

After the restructuration, said Mulyono, the L&I Directorate must be able to carry out the role as an operational integrator to ensure all of the business lines are integrated from upstream to downstream so that the operations are more effective and efficient.

Mulyono also added that as an operational integrator, all assignments from the government such as the distribution of certain types of fuel (JBT) and assignment fuels (JBKP), distribution of 3 kg LPG to the public, distribution of 1 Price Fuel, construction of fuel/LPG infrastructure in Indonesia, must be ensured that they are carried out well. To support the implementation of the government’s assignments, Pertamina continues to develop downstream’s infrastructure, and in July 2021 has succeeded in increasing the capacity of the fuel tank by 251.2 thousand Kiloliters.

With this task, added Mulyono, the L&I Directorate will also ensure the reliability of all infrastructure and distribution networks owned by Pertamina Group, so that it can run synergistically in accordance with the company's targets.

Besides being reliable, said Mulyono, the integrated operational will also create efficiency for the company. The balance between public service and optimization of profit targets for Pertamina must be met, by reducing cost, synergy, and optimization in all sub holdings. From the integrated logistic efficiency efforts, Pertamina was able to reduce inventory costs by almost 40% from USD 5.2 billion to USD 3.1 billion, and inventory volume from 80 million barrels to 48 million barrels per semester 1 2021.

The L&I Directorate will also continue to encourage the acceleration and synergy for this Government Assigned Programs and National Strategic Program to run quickly. Not only fast, this project is also confirmed to support the domestic industry by absorbing the Domestic Component Level (TKDN). With a strict monitoring policy, in July 2021, Pertamina was able to achieve the TKDN from all of the projects by 57.8% or above the set target. Moreover, through the integrated optimization from upstream to downstream and master program, Pertamina shows a high level of logistics supply chain planning accuracy reaching 97.9%.

As of August 31, 2021, there are 50 Government Assigned projects to Pertamina Group spread across several Sub-holding, namely 22 assignments at the Upstream SH, 11 assignments at the Refinery & Petrochemical SH, 5 assignments at the Gas SH, and 11 assignments at the C&T SH. Among these assignments, 14 of them are National Strategic Projects (PSN) that is stipulated in Presidential Regulation No. 109 year 2020.

“Pertamina continues to be highly committed in carrying out assignments from the Government, from upstream to downstream, and ensure the national strategic projects run according to the targets, and have impacts on the national economy,” said Mulyono.

President Director of Pertamina, Nicke Widyawati emphasized that in line with the restructuration, Pertamina as a holding company continues to strengthen its role in leading and responsible for integrating business and operational lines under the control of the L&I Directorate, starting from the planning step, coordination, to controlling subsidiaries in the implementation, so that the company’s goals and the shareholders’ aspirations can be realized.

“With this massive design, we hope that the vision and aspirations of the shareholders towards Pertamina to increase its value to 100 billion USD in 2024 can be realized,” said Nicke.**