JAKARTA (TheInsiderStories) - PT Pertamina (Persero), a state-owned integrated energy sector, projects the ratio of oil and gas reserves or reserve replacement ratio (RRR) to grow 200-400% per year to meet national energy needs. Natural production decline (decline) and the drop in world oil prices pose the greatest challenges for Pertamina today.
Bambang Manumayoso, Governance Team Leader (Transformation) for Upstream of Pertamina said various efforts are being undertaken, not only to survive, but also how we can still grow in the future. This is done because Pertamina is an arm of government and must secure the national energy.
“Pertamina is an Indonesian flag carrier. Pertamina, which according to the law, the only one who should maintain national energy security, both oil and gas and geothermal, “said Bambang in press statement.
According to him, the efforts made by Pertamina today to encounter the fall in production is by using appropriate technology. In addition, Pertamina must also continue to carry out exploration activities to replace or add to reserves that had been produced.
“Pertamina’s upstream strategy is how production and reserve replacement ratio (RRR) of oil and gas should go up, so the reserves that have been produced can be replaced with a new, higher reserves,” said Bambang, who is also the Director of Development of PT Pertamina Hulu Energi.
Pertamina projects of oil and gas production growth of 8% per year during 2015-2030. In the 2010-2015 period, the performance of the company’s oil and gas production grew an average 6% per year with an average oil and gas reserves increased by 4.4% per year.
Bambang said the other keywords to withstand the impact of falling oil prices is the cost of production per barrel. If in August 2014, the oil price was around US $ 70 per barrel, in February 2016 the price dropped to US $ 26-US $ 27 per barrel.
“Pertamina has a big challenge. But with the efforts undertaken, Pertamina can still survive, although profits are also declining,” he said.
Therefore, said Bambang, Pertamina will continue to change the old paradigm from ‘Production at any Cost’ to Creating More Values (Production and Value of Investment) of all its assets.
According to him, Pertamina continues to make the process of differentiation of all its assets, by using clustering asset and portfolio so that it looks which assets can provide the greatest value to the lowest impact. The gradation of each asset will be evaluated various attempts to do to be able to give a positive value for the company.
Currently, the new business paradigm Pertamina upstream models continue to be intensified. Operationally such as, improved performance both in terms of volume and value, optimization of investment (Capex), undertake concrete actions for growth (especially Business Portfolio), implementation of the Operational Excellent on each of the projects have major implications for Pertamina, housekeeping sustainable business processes and development HR.
Efficiency and rationalization programs are also being conducted, with lowering the cost per barrel. If the first few assets with operating cost over US $ 30 per barrel, it could be suppressed to below US $ 20 per barrel. “On average it has dropped, which resulted in a decline in operational costs,” he concluded. (*)