Restructuring Process Completed, All Pertamina Subholdings Are Ready

Jakarta, September 1, 2021 - The restructuring process for Pertamina as an Oil and Gas SOE Holding has been completed, and in parallel, significant progress and positive performance results have been seen in the Pertamina Group. The roadmap for the formation of Oil and Gas Holdings began in 2018 with the establishment of Gas Subholdings, followed by five other Subholdings, namely Upstream Subholding, Commercial & Trading, Refining & Petrochemical, PNRE, and Shipping in June 2020 and was completed on September 1, 2021.

Following the roadmap, Pertamina's duties as a holding will be managing portfolios and business synergies throughout the Pertamina Group, accelerating new business development, and carrying out national programs. Meanwhile, subholding will play a role to encourage operational excellence by accelerating business development and existing business capabilities as well as increasing flexibility in partnerships and funding that are more profitable for the company.

This restructuring resulted in a leaner structure and clearer holding and subholding powers. It has had a good impact on the decision-making process for a more concise investment, operations move more agile, faster, and focus on carrying out business developments that are more aggressive and responsive to changes in business conditions that occur. Pertamina group can also run operations more effectively and efficiently, one of which is through business processes integration from upstream to downstream.

The entire restructuring process has been completed through signing several legal end-state documents for separation, share acquisition and business transfer for Subholding Upstream, Subholding Refining and Petrochemical, Subholding Commercial and Trading. It complements other legal end-state Subholding processes that have been completed previously.

Deputy Minister of SOE 1, Pahala Nugraha Mansury, stated that the Ministry of SOE as a shareholder considered that the signing of the legal end state was a momentum and starting point for Pertamina to transform its business model, work culture, digitization and continue to invest sustainably in the future in sustainable sectors. The main objective of the formation of this subholding is how Pertamina as a large company in Indonesia can ensure that the Holding and Subholding in Pertamina as a whole can reach a market value of up to USD 100 Billion.

"It is not impossible. It is our shared vision that the form of structural transformation that we are signing today, of course, requires a transformation of the business model and various strategic initiatives. But most importantly, the work culture at Pertamina can change. With the completion of the legal end state, it is hoped that it will accelerate the transformation process at Pertamina," said Pahala.

On the same occasion, President Director of Pertamina, Nicke Widyawati said that the signing of this legal end-state document was an important milestone in Pertamina's history because the business transformation process followed by organizational restructuring in line with the white paper and the transformation roadmap at the Ministry of SOEs had been carried out for almost 3 years.

"This is something we should be grateful for because the Government and all stakeholders provide extraordinary support for Pertamina's business transformation and organizational restructuring," said Nicke.

According to her, after legal and state formation, all the hopes of the nation's and state stakeholders rests on Pertamina.

"Now is the time for us to prove that restructuring is the best for the nation and the state. It is time for us to prove that with this new structure, with a clearer and more focused division of authority and responsibility from each subholding with the integration function performed by the holding. We can execute all agendas simultaneously, be it the existing business to provide energy for throughout the country, as well as the strategic agenda, to meet the challenges of the energy transition," said Nicke.

Nicke also urged all ranks to increase their will and positivity to demonstrate that everything will be better with this new organization.

"For that, let us show and prove to all parties that we can realize this extraordinary trust and support given by the President of the Republic of Indonesia, Ministries, Institutions, and Agencies," said Nicke.**