More Productive and Efficient Post Restructuring, Pertamina Upstream Subholding Successfully Recorded 112% Cost Optimization
Jakarta, September 13, 2021 – After the restructuring of Pertamina’s holding-subholding in 2020, the Upstream Subholding, which manages all of Pertamina’s upstream working areas, continues to optimize various innovations in operating costs to maintain operational sustainability and the ability to invest. This cost optimization activity is called OPTIMUS or Optimization Upstream. It is managed by a cross-functional team in the Upstream Subholding environment from Subholding, Regional, and Zone to carry out and formulate activities related to cost optimization. The Operating Budget (ABO) optimization, which has been actualized until the end of June 2021 through OPTIMUS, has reached USD 349 million or 112% of the set annual target. Through the virtual Town Hall meeting of the Upstream Subholding, the management presented the overall performance of the Upstream Subholding in semester 1 and the optimization efforts and achievements in the Upstream Subholding (6/9).
Henricus Herwin, VP of D&P Technical Excellence & Coordination, as Project Manager of the Cost Optimization Team, explained that the goal of OPTIMUS is to create cost optimization as a culture in the work ethic and maintain a sustainable company operation at an effective and efficient cost. OPTIMUS also targets cost optimization for development activities, allowing the company to continue developing resources and production more aggressively and sustainably.
“OPTIMUS is carried out using seven pillars: budget accuracy increment, technical innovation and design standardization, work philosophy change, operational optimization, supply-chain optimization, inter-company cooperation and contract renegotiation, and adaptive organization. These seven pillars are possible to be implemented with regionalization, borderless operations, shared facilities, and supported by digitalization,” explained Henricus.
The Upstream Subholding obtains the 2021 cost optimization target from various activities based on the seven pillars of cost optimization. One of them is implementing Diesel Rotary Uninterruptible Power Supply (DRUPS) with a power supply source from the PLN Super Ultima-2 Power Plant service at Pertamina EP (PEP) Tanjung Field, which is included in the Kalimantan Region management.
“The implementation of the DRUPS technology has a very good impact on increasing power quality-reliability to above 99% and reducing production costs by more than 45%. Previously, PEP Tanjung Field production costs were quite high. Most of it was for fuel and lubricants in the power supply, so there is a need for an alternative power supply that is more economical but still reliable,” said Henricus.
Besides production costs and reliability, implementing the DRUPS is also a form of State-Owned Enterprises synergy, reducing up to 35 million tons of greenhouse gas emissions CO2eq and hazardous and toxic waste (B3).
In addition, one of the other cost optimization programs of the Upstream Subholding is implemented in the Mahakam Block. By optimizing well intervention through redesign and collaboration methods, PHM, which is included in Zone 8 Kalimantan Region, can make cost savings.
Another optimization is using chemicals in the Banyu Urip and Kedung Keris fields located in Zone 12 of the Eastern Indonesia Upstream Subholding, collaborating with the ExxonMobil operator. Optimization is carried out through the Pour Point Depressant (PPD) initiatives and keeps the wax pipeline built up.
Upstream Subholding with regionalization pattern and borderless operation also has another optimization potential, including Supply Chain Management and Asset Management. Several initiatives carried out are the procurement centralization of goods and services, active contract renegotiation, stockless policy and use of shared materials, warehouse management optimization, activities related to marine & aviation, asset management, and value creation from strategic partnership alliances.
The biggest contribution of cost efficiency in the SCM sector is centralizing procurement or demand aggregation. It is part of the SCM Strategic Planning in combining similar needs or requests from various zones to obtain efficiency through large purchases.
As of July 2021, Pertamina Upstream Subholding has implemented more than 125 programs related to cost optimization.
John H. Simamora, Director of Strategic Planning and Business Development of the Upstream Subholding, said that with the regionalization pattern and borderless operations in the Upstream Subholding, there would be value creation and cost optimization on the entire process that would create more collaboration between zones and working areas.
“I believe that our solidarity and the strength of all our resource assets, especially the contribution of qualified and committed human resources, will achieve all of the company’s targets and aspirations,” concluded John during the Town Hall Meeting with all Pertamina Upstream Subholding Perwira.