1495 Materi Pertamina Towards Aec 2025 (corporate University).pdf

Pertamina Towards Asian Energy Champion 2025

Presentation for : Corporate University

PT Pertamina (Persero) Jln. Medan Merdeka Timur No.1A Jakarta 10110 Telp (62-21) 381 5111 Fax (62-21) 384 6865 http://www.pertamina.com

Agenda

1

Pertamina’s Vision, Mission & Business Process

2

Pertamina Aspiration in 2025

3

Highlight RJPP 2014-2018

Page 2

Agenda

1

Pertamina’s Vision, Mission & Business Process

2

Pertamina Aspiration in 2025

3

Highlight RJPP 2014-2018

Page 3

Pertamina’s Corporate Vision, Mission and Values

Vision

To be a world class national energy company

Mission

To carry out integrated core business in oil, gas, & renewables based on strong commercial principles

Values

Clean, Competitive, Confident, Customer Focus, Commercial, Capable

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Summary - Key Company Highlights Overview 2013 Key Financial (USD Billion)  Sales and Other Operating Rev : 71.10  Net Income : 3.07  EBITDA : 6.66  Total Assets : 49.34 Employees (Group)  24,778 persons Affiliation  Subsidiaries : 22 units  JV & Associates : 13 units

2013 Upstream Operations  5 major upstream subsidiaries for jointly-operated areas

− PT Pertamina EP: 5 own-operated

2013 Downstream Operations Refining  6 refineries (Total capacity : 1,031 mbs/d)

working areas, 26 TAC, 27 KSO

− Pertamina Hulu Energi: 3 PSCs,

  

 



10 JOBs, 14 IPs/PPIs − PT Pertamina EP Cepu − PT Pertamina International EP − ConocoPhillips Algeria Ltd 8 international areas (production & exploration) in 7 countries Total oil and gas production − Oil: 201.51 mbopd − Gas: 1.53 bscfd Geothermal working areas − 8 own-operated areas − 7 joint-operation areas Geothermal production 2,962 GWh of electricity and 21.73 million Ton of steam Total gas transmission pipeline length of 1,589 km with total pipe volume 32,675 inches km, divided into 43 licenses 39 onshore drilling rigs (PDSI)

Marketing  8 fuel marketing regions  112 fuel terminals  25 LPG depots  5,091 retail gas stations  60 fuel terminals  3 LOBPs (lube oil blending plants)  192 tankers, 59 owned & 133 chartered  28 LPG tankers operated  Sales volume  Fuels (in Million KL) − Subsidized fuels : 47.44 − Gasoline : 30.59 − Kerosene : 1.12 − Automotive Diesel Oil : 15.73 − Non-subsidized fuels : 19.12 − Retail : 0.79 − Industry & Marine : 14.17 − Aviation : 4.16  LPG (Million MT) − Subsidized 3kg (PSO) : 4.40 − Non-subsidized (Non-PSO) : 1.20

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Pertamina’s Business Process

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Agenda

1

Pertamina’s Vision & Mission

2

Pertamina Aspiration in 2025

3

Highlight RJPP 2014-2018

Page 7

Pertamina’s Aspiration is To Be a Fortune 100 “Asian Energy Champion” by 2025 “Asian Energy Champion” ‘Fortune 100’ position (Revenue ~$200b USD, EBITDA ~$40b USD) Leadership in existing core

Growth in new businesses

E&P Leading Asian NOC: 2.2 mmboepd production with domestic leadership (50%) and int’l foot-print (~30% of own prodn.) Midstream gas Integrated gas champion with trans-Sumatera and trans-Jawa gas infra-structure Refining Economically competitive refining capacity; Top quartile operating performance Industrial fuels & lubes Maintain position of strength with over 50% market share, while sustaining profitability Trading Optimize supply chain and improve profitability

Increase efficiency in PSO

PetChem Largest petchem player in Indonesia with 35% market share, high margins through integration

Oil products Maintain position of strength with 60% market share; new service model through “New pasti pas” and NFR

Coal Leader in alternate technology (e.g. CBM, UCG) while maximizing coal production

LPG Optimize supply chain and infrastructure

Biofuels Serving mandate of 20% blend; upstream presence to reduce losses and supply risk

Shipping Support own supply chain and also build third party service model

Power One of the largest Indonesian IPP player with ~ 3-5 GW capacity

Project & Technology Center: Technology leader on CBM, Geothermal, EOR and deepwater; Strong project executor with delivery on time and within budget Organization & Capability: Accountability and delivery; Employer of choice to attract and retain best talent

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The 2025 aspiration implies stepped-up revenues and capex RJPP, 2014 *)

RJPP, 2018 *)

Aspiration, 2025 ~200

Revenues Bn USD

79

116

4x

10-15

14

Annual capex requirement Bn USD

3x

8

2,200

Oil and gas Production kboed

1,115

5x

541 38

EBITDA Bn USD

*) draft RJPP 2014-2018 (June 2014)

21

9x

8

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Upstream Strategy toward Pertamina as a Asian Energy Champions In 2025 Aspiration Upstream 2025 Initiatives

• Leading Asian NOC with 2.2 mmboepd production • Leverage domestic resources in CBM, Shale Gas, Oil, Gas, and Geothermal Key elements of the strategy

• Domestic leadership in O&G production with ~50% share of all domestic production

• International footprint with ~30% of own O&G production outside of Indonesia

Enabler for the success

1. 1

Reorganize Exploration, Development & Technology to ensure delivery

2. 2

Complete basin review of existing and domestic new acreage

3. 3

Development of key projects e.g., Banyu Urip, Jambaran-Tiung Biru, Natuna

4. 4

Establish “Pertamina Hulu Way” of production operation system across various assets

5. 5

Increase geothermal production (Improve pricing, partnerships & deliver on development plans)

• New Pertamina Hulu Way for production

6. 6

operations system (e.g., replicate best practice across various assets)

Accelerate CBM development, including through partnerships

7.7

Transform PDSI into integrated services Co

8. 8

Develop a Hulu manpower & recruitment plan

• Extensive use of partnerships • Integrated exploration strategy, both in existing and new acreage

• Established semi-centralized exploration, development and technology, staffed with appropriate talent

• Accelerated efforts in HR recruiting, • Accelerate CBM/Shale Gas •

development to ~200 kbpd (~1100 ) in 2025

development and retention

• Accelerate geothermal development to ~2.5 GW domestically

• Transform PDSI into an integrated upstream services company (e.g., offshore drilling,etc)

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Gas Strategy to acheive Pertamina Aspiration in 2025 2025 aspiration to become Indonesia’s integrated gas player will be deployed through value creation strategy

Gas 2025 Initiatives

Description Integrated gas infrastructure and pricing

• Develop roadmap for an integrated gas infrastructure in Indonesia –a Sumatera: convert the Arun plant into a Re-gas facility; extend pipeline to connect Arun to Medan and beyond –b Jawa: meet current demand with FSRUs and future demand with inland Regas; build trans-Jawa pipeline to optimize gas supply –c East Indonesia, serve decentralized needs through mini receiving and Re-gas facilities spread over strategic locations • Negotiate higher gas prices with PGN to trigger additional supply

1

Integrated infrastructure blueprint (Trans-Java pipeline & regas, Arun regas & pipeline) based on updated gas balance

2

Roll out CNG for public transport, heavy vehicles, private vehicles

3

Secure LNG for re-gas facilities (both domestic and international)

4

Build power generation business (geothermal, renewable)

• Growing business around Natural Gas transmission & distribution, LPG Expand along value chain

processing and NGL

• Expand distribution to capture more margin ($2-3 per mmbtu vs. $0.7 per mmbtu for transmission)

• Roll out CNG in Indonesia and seek government support (price setting, covering Maximize downstream opportunities

1st wave of infrastructure and conversion kits capex, and mandating conversion of public transports) • Develop opportunities to serve households, refineries and other industries (e.g. heavy vehicles in mining, shipping industry)

• Adopt global sourcing strategy for natural gas. Seek government support for Global sourcing and trading

domestic sourcing, e.g. Bontang and Tangguh

• Build trading business to leverage storage resources (e.g. Arun) and optimize LNG procurement

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Refining Strategy to acheive Aspiration in 2025 2025 aspiration – Expand economically competitive refining capacity…

• Demand growth for refined products in Asia requires expansions in new capacity beyond 2015

… through a threepronged strategy

Refining 2025 initiatives 1

• Operational excellence: Optimize



operations to meet technical limit; target positive P&L for Refining



• Profitability of Pertamina refining is low, driven by structural disadvantages

• Maximimize sour crude

• Asset maximization: “Minor upgrade” of assets; Expand operating window to increase sour crude processing

processing to increase refinery margin and competitiveness

• To meet Indonesia’s energy fuel requirement, Refining need to competitively build refining capacity

• Upgrade existing refineries (RDMP)

• Expansion and upgrades:

2 • Develop end to end petrochemical business capability through integration with existing refineries and partnership  Calciner RU II  Polypropylene RU VI 3

• Build supply chain infrastructure,

o Upgrade existing refineries to

system and crude oil trading capabilities  CCT

increase complexity and margins;

o Build new refinery integrated with petchem to close domestic supplydemand gap;

RU V process sour crude and bottom upgrading RU II / III open access and process sour crude

4

• Build new refineries integrated with

o Develop supply chain infrastructure to increase operation flexibility and optimize margin including crude oil trading capability

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petchem through partnership  GRR Balongan, East Java and Government

M&T Strategy toward Pertamina 2025 Strategy to retain leadership

M&T will continue to be important for Pertamina

Maintain Pertamina leadership (industrial fuels, aviation and lubricants)

• M&T shapes the public image of Pertamina – and to some extent, the government

• Role in ensuring security of supply distribution unlikely to go away completely as past of NOC obligation to the nation

M&T 2025 initiatives 1 • Maintaining I&M market leadership in an increasingly competitive market ( improvement in cost position by 10%) 2 • Expand marine bunker business to capture demand in Kalimantan (25% vol share in 5 years and build marine bunker infrastructure) 3 • Expand infrastructure in selected airports to anticipate increase in future demand

4 • Develop Pertamina lubricants to become major regional player

Capture growth in high margin segments (petrochemicals)

5 • Build a competitive and profitable petchem business and earn $ 8 – 10 bn by 2025

6 • Improve PSO fuel distribution through New IT System National Rollout

Increase efficiency of PSO (retail fuels and LPG)

• M&T is an important

7• Roll out NFR for profitability and increase customer value proposition (NFR as 30% of outlet space) 8 • Increase competitiveness in non-PSO fuel through “New Pasti Pas” and earn $50 – 70 bn from fuel retail

9 • Develop a new LPG business model to shift consumption pattern towards reticulation

source of steady cash flows for Pertamina $ 140 bn by 2025

10• Expand LPG infrastructure network with 2 referigerated and 12 pressurized terminals

Build supply and distribution infrastructure blueprint to support growing demand (S&D and shipping)

11• Build world class fuel distribution facility example : upgrade multiple depots, blending facilities at Sambu & Tanjung Uban, Boyolai – Madiun pipeline etc 12• Expand shipping business to new segments : LNG, upstream O&G services and bulk

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5 HR key acceleration initiatives to achieve 2025 vision Initiative Upstream business 1 integrated org. structure

Build world class 2 technical talent at scale

Details

• Work as one team with Business Directorates on separation of legal and operating structures in Upstream business; business development centralized in PIMR

• Develop compelling technical career track to attract and retain world class talent,

•

Skill-based& per3 formance-based compensation

4 Corporate University

including building technical talent development program through leveraging senior experts and encouraging knowledge transfer • Launch technical/specialist track for GGR (Upstream) and Mechanical (Refining) on Dec 2012 • Launch comben package and recognition programs for technical talents/specialists Acquire experienced hires for critical globally competitive skills through contract separate track

• Aligned compensation policy across Pertamina group, directly linked with skill sets, roles and responsibilities • Launch single grade program for SVP and VP on Q4 2012

• Internal capability building through structured program (incl. partnership and mentoring) • Launch Business Academy: Upstream (GGRPF & Drilling) and Refining •

(Maintenance & Reliability Management) on Dec 2012 Partnerships with global Corporate University or other world class learning provider, e.g. Insead, for selected skills’ learning program

• Implementing new HR roles, including strategic business partner and administrative World Class HR 5 Excellence

service breakthrough • Launched HR Customer Service on week 1 July 2012 • Sharpen HR Business Partner roles & responsibilities through procedures and upskilling program Page 14

GA Directorate initiatives towards 2025 Aspiration

GA Directorate 2025 Initiatives

Central provider of policy support, services, and best quality solutions for general affairs that is equal to world class national energy company

Key elements of strategy Make HSSE to be excellent in all operational aspects Drive change based on ICT and shared services

Optimize goods/services procurement using hybrid method Focus on Business Supporting Assets (APU) to support the business Improve ownership and control of land status completed by 2016 Update office management and general services Conduct Quality Assessment, Improvement, and knowledge management process properly and consistently

1. 1

Build independent business unit (ICT and Asset Management)

2. 2

Establish policy for ICT, HSSE, Asset Management, Quality, and Procurement

Monetize assets as part of the establishment of company’s profit

3. 3

Develop a smart, green and iconic Office Center

Realize strategic partnership

4. 4

Comply with all standard regulations

5. 5

Develop service based ICT architecture

6. 6

Continuous improvement of all aspects in the management of GA

7. 7

Embedded culture of HSSE, Quality, ICT

8. 8

Maintain good image of the company

Enabler for the success

Implement the best applied practice of industry

Implement world class standard (ISO, CIP, PQA) Professional HR specific competency through certification, benchmarking, job training, etc Central provider of GA solutions

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Agenda

1

Pertamina’s Vision & Mission

2

Pertamina Aspiration in 2025

3

Highlight RJPP 2014-2018

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RJPP 2014-2018* highlights as stage towards Pertamina Aspiration 2025 (1/2) * Subject to be revised by Management (Draft per June 2014)

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RJPP 2014-2018* highlights as stage towards Pertamina Aspiration 2025 (2/2) * Subject to be revised by Management (Draft per June 2014)

Data cadangan geothermal merupakan total cadangan (P1+P2+P3), tidak termasuk hypotetical

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Thank You

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