Pertamina Successfully Achieves Cost Optimization of up to USD 1.25 Billion

Jakarta, March 11, 2024 - Various technology innovation programs, business model improvements, and entity synergies implemented by Pertamina across its entire business lines have led Pertamina to achieve cost efficiency and profit increase of up to USD 1.25 billion in 2023.

These achievements stem from the Cost Optimization program implemented throughout the Pertamina Group. Throughout 2023, 301 Cost Optimization programs were executed, ranging from financial to operational strategies. It demonstrates the agility, nimbleness, and efficiency of the state-owned energy company's business performance.

President Director of Pertamina, Nicke Widyawati, expressed her appreciation to the team for their remarkable contributions in achieving these results during the Cost Optimization Appreciation Day event held last Wednesday (06/03). This success is proof that Pertamina is capable of adapting and innovating.

"These efforts are not only about cutting costs but also about transforming and improving operational models comprehensively. The impact is tremendous; in 2023, all cost optimization programs within the Pertamina Group contributed up to USD 1.25 billion," Nicke stated.

Nicke added that the success in cost optimization plays a significant role in supporting revenue and profit enhancement for the company. With more efficient operations, Pertamina can optimize its revenue potential and become a leader in the national energy business.

"Pertamina is now even stronger in its commitment to continuous innovation, maintaining operational efficiency, and retaining its position as a leader in the energy sector in Indonesia," Nicke added.

Various top innovation programs have been implemented by Pertamina in the upstream, processing, distribution, and marketing sectors. In the upstream sector, innovations include centralized procurement of chemicals and borderless operation. In the processing sector, innovations include optimizing crude procurement, energy consumption efficiency programs, and process unit optimization. In the distribution sector, route optimization, parcel size, and tonnage optimization initiatives have been implemented. Meanwhile, in the commercial & trading sector, Pertamina has executed programs to streamline LPG & fuel procurement processes. Additionally, Pertamina Holding has implemented optimization programs such as liability management, tax renegotiation, centralization of IT infrastructure, optimization of supporting assets, and centralization of procurement processes for goods and services.

"Business synergy, digital transformation, revenue enhancement, and low-risk ESG are the four focuses for enhancing cost optimization this year," Nicke continued.

The Commissioner of Pertamina, Heru Pambudi, expressed appreciation for all the innovations and dedication in implementing cost optimization programs within the Pertamina Group. "To achieve Pertamina's vision of becoming a world-class company, cost optimization implementation across every line of the Pertamina Group is crucial," he said.

According to Heru, building a cost-conscious culture based on revenue through cost optimization programs as a manifestation of AKHLAK culture has proven to strengthen Pertamina's resilience and serve as the foundation for continuous progress.

"The budgets must also be optimal, efficient, and governed. Pertamina must be able to apply a zero-tolerance principle for corrupt practices," Heru emphasized.

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, and Governance (ESG) implementation across all Pertamina's business lines and operations.