Compared with the corresponding period in 2020 when the company suffered $768 million in losses, Pertamina managed to increase profits by $951 million, equivalent to Rp 13.6 trillion.

The positive performance in the first half of 2021 was spurred by sales growth, which reached $25 billion, and the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) of $3.3 billion, both increased by more than 22 percent compared with last year.

Pertamina’s acting senior vice president of corporate communications and investor relations Fajriyah Usman explained the impact of the prolonged COVID-19 pandemic, which could still be felt by Pertamina throughout 2021. The fluctuating crude oil price had a significant impact on Pertamina’s working performance. The Indonesian Crude Price (ICP) doubled to $70.06 in June 2021, up from $36.50 in the corresponding period in 2020

Enhancement of revenue and profit in downstream sector

Pertamina’s upstream oil and gas production has reached the target of 850,000 barrels of oil per day (bopd). With the increase in the ICP and efficiencies in development and production costs, Pertamina’s upstream sector revenue and profit were above target.

Increase in fuel sales volume

Regarding downstream product sales, the demand for fuels has gradually recovered although still lower compared with the demand in normal conditions before the COVID-19 pandemic. As of June 2021, the average demand for fuels was recorded at 126,000 kiloliters per day, up from about 116,000 kiloliters per day in June 2020, an 8 percent increase. However, the figure was still 6 percent lower compared with demand in the normal conditions in 2019 before the COVID-19 pandemic.

Pertamina keeps fuel prices unchanged despite sharply rising ICP

“The soaring oil price has put significant pressure on the basic costs of fuel production.  Despite this, Pertamina has not raised fuel prices given the people’s declining purchasing power as a result of the COVID-19 pandemic. Meanwhile, other fuel businesses have increased fuel prices several times since early 2021. Certainly, this has put pressure on profits that the downstream sector generated and yet, this is a form of contribution Pertamina has made to help the people amid the COVID-19 pandemic,” Fajriyah explained.

Cost efficiency and revenue enhancement to increase working performance

In facing the challenging times, Pertamina’s board of directors, board of commissioners and employees continually take strategic steps to enhance revenue and also cost leadership in all lines, Fajriyah said.

He said regarding the revenue-enhancement efforts to provide additional income for the company, Pertamina encouraged all sub-holdings and subsidiaries to strengthen their operational performances through, among other things:

• Increasing production and lifting and also monetizing gas in all work areas of the upstream sector, including accelerating massive and aggressive working plans in the Rokan Block, which was officially taken over by Pertamina on Aug. 9.
• Optimizing production from refineries with high value products and increasing the refinery products and petrochemical sales domestically or exports overseas
• Accelerating the development of solar power plants (PLTS) for internal Pertamina or for external markets and also strengthening the battery ecosystem through activating swapping and charging electric vehicle (EV) batteries in EV charging stations (SPKLU), which are integrated into public fuel filling stations (SPBU)
• Accelerating the commercialization of liquid natural gas (LNG) and optimizing the infrastructure of Arun as a center of distribution in the Asia region
• Additional revenue opportunities through renting ships and logistics to external parties beyond Pertamina for LPG cargoes, fuels and petrochemicals.

For efficiency programs, Pertamina is strongly committed to implementing optimization measures, which include:

• Reforming patterns of operations for the supply chain of crude oil, BBM and LPG.
• Regionalizing upstream sub-holdings from the planning phase to execution to optimize sharing resources.
• Flexibility in procuring crude to increase gross refining margins.
• Preventive maintenance in every refinery.
• Centralizing procurement.
• Reduction of losses by applying digitalization.
• Implementing new ways of working (agile working).

Pertamina supports the government in coping with the COVID-19 pandemic

“Although facing a tough time, Pertamina has still been able to carry out its service to the public well. Pertamina has also never stopped its support for the government in tackling the COVID-19 pandemic. Pertamina has built three emergency modular hospitals, namely Patra Comfort, Simprug and Tanjung Duren; and through the operation of the Ekstensi Asrama Haji Pondok Gede Hospital has managed to add nearly 1,000 treatment beds. The figure does not include the operation of the COVID-19 referral hospitals spread across Indonesia run by Pertamina Bina Medika,” Fajriyah asserted.

Since the pandemic severely hit Indonesia until now, Pertamina Group has disbursed trillions of rupiah to help the people face the pandemic. Pertamina’s tangible actions include providing 315 ventilators to 30 hospitals and being directly involved in accelerating the distribution of more than 4,300 tons of medical oxygen for 366 hospitals across nine provinces.

Pertamina supports government in empowering MSMEs

Pertamina’s devotion is not confined to the health sector. To help the economic recovery, Pertamina is also carrying out empowerment programs for more than 13,000 affected micro-small-and medium enterprises (MSMEs) to enable them to survive amid the pandemic and even to elevate them to go global.

Amid the pandemic, Pertamina is playing its role as a locomotive of the national economy. Although demand has not returned to normal, Pertamina maintains its operational activities in the entire energy ecosystem, from upstream to downstream, including the development of national strategic projects, with an average local content requirement (TKDN) of more than 75 percent, well above the targeted 30 percent. Accordingly, Pertamina has been able to pay 1.2 million workers directly, with a multiplier effect involving about 20 million workers indirectly. This is Pertamina’s contribution toward continuously being the locomotive of the national economy.

All of the achievements that Pertamina has made are closely related to the results and advantages of restructuring that have been running well, in which the legal end state for several sub-holdings has been achieved or is in the process of completion.

“With the strategic efforts and management breakthroughs in all business sectors, Pertamina hopes that it will pass the second year of the COVID-19 pandemic with a positive working performance. Apart from being committed to carrying out its mandate to safeguard the national energy service and security, Pertamina also plays a role in propelling the national economy, providing as many benefits for the state and people, not merely being profit oriented.” Fajriyah said.

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