S&P Global Ratings: Pertamina International Refinery Achieves 'BBB' Credit Rating

Jakarta, March 28, 2024 - After previously securing a final BBB rating with a stable outlook from the international rating agency Fitch Ratings, PT Kilang Pertamina Internasional ("KPI") has obtained a similar rating from another prestigious international rating agency, S&P Global Ratings. The BBB rating with a stable outlook is consistent with that obtained by PT Pertamina (Persero), KPI’s parent company.

President Director of KPI, Taufik Aditiyawarman, welcomed this achievement. "We are very grateful and proud of the rating results obtained by KPI from Fitch Ratings and S&P Global Ratings, two prestigious international rating agencies with a global reputation, especially considering that this is the first credit rating for KPI. This is a recognition of the core and strategic role of KPI in the Pertamina Group's business and national energy resilience in general," said Taufik.

S&P Global Ratings is one of the leading international rating agencies with over 150 years of experience in the field. In its assessment, S&P conducts comprehensive analysis, including the company's financial performance, industry risks, the company's position compared to competitors, its relationship with the parent company/government, and other relevant factors. The results of this comprehensive analysis are expected to provide insights for market participants, aiding in the business decision-making process.

KPI has a competitive advantage as part of the Pertamina Group. "As the Refining and Petrochemical Subholding, KPI owns and operates all crude oil refineries and almost all petrochemical facilities in the Pertamina group. From the refinery production, KPI manages to fulfill more than half of the national energy annual requirements, and will continue to increase with the RDMP Balikpapan refinery upgrade project completion," said Taufik.

The Balikpapan RDMP project will increase refinery capacity by up to 100 thousand barrels per day with Euro V quality products and better refinery complexity. Therefore, the project completion is also seen by S&P to potentially increase KPI's EBITDA in 2025-2026 after the project comes onstream.

Together with PT Pertamina Patra Niaga (PPN) and PT Pertamina Hulu Energi (PHE), KPI is seen by S&P as an integrated trio in managing the Public Service Obligation (PSO) mandate from the government. KPI purchases almost all domestic crude oil production from PHE and processes it in KPI's refineries spread across six cities in Indonesia. The production from these refineries is then mostly handed over to PPN for distribution to fulfill national energy needs.

Taufik further explained that through refinery upgrade and development projects, KPI aims not only to increase capacity but also the complexity and quality of refinery products. "KPI targets the existing refineries to produce products of Euro V equivalent quality and to emit lower carbon emissions," said Taufik.

Fadjar Djoko Santoso, Vice President of Corporate Communication of PT Pertamina (Persero), stated that Pertamina, as a Holding and its Subholdings, continues to improve the implementation of good governance principles.

"The award received by PT KPI indicates that the company's governance is improving and has been recognized by the international community," said Fadjar.

PT Pertamina International Refinery (KPI) is a subsidiary of Pertamina engaged in the core businesses of oil refining and petrochemicals following ESG (Environmental, Social & Governance) principles. KPI is also registered with the United Nations Global Compact (UNGC) and is committed to the Ten Universal Principles of the UNGC in its operational strategy as part of the ESG aspects implementation.**