BUSINESS STRATEGY TO OPTIMIZE REFINERY BUSINESS DEVELOPMENT TO FILL IN THE GAP BETWEEN SUPPLY FROM PERTAMINA REFINERY AND NATIONAL DEMAND OF FUEL PRODUCT

• Main Author: Noveria, Ria
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/35295
• Institution: Institut Teknologi Bandung

Energy needs, especially fuel products (BBM) in Indonesia continues to increase, as described by the Ministry of Energy and Mineral Resources that the national fuel consumption in 2017 of 70.4Kl and estimated in 2018 increased to equal to 75Kl. of the total national fuel requirement. Contribution of fuel products from Pertamina’s refinery less than 50Kl. There is a considerable difference between the national fuel requirement and Pertamina's refining capacity to meet the national fuel needs. Pertamina's problems are at least three i.e. (i) the low capacity and complexity of Pertamina's existing refineries, (ii) the low supply of Pertamina's entitlement crude oil as a feedstock for Pertamina's refineries, and (iii) financial capability of Pertamina to fund its project investment. In order to increase the capacity and complexity of the refineries, Pertamina plan to upgrade the refineries as define and set forth in Pertamina's Long Term Work Plan (RJPP), even though without detail source of fund. It is understand that to upgrade Pertamina refineries requires enormous investment costs, both construction costs and feedstock procurement. At least USD22.5 billion is required for upgrading four Pertamina’s refineries and USD26 billion to build two grassroots refinery to increase capacity from 900bbl/day to 2.0bbl/day, and with a complexity level from 5.1 to 8.6 (Nelson Complexity Index). Pertamina’s team has conducted some studies, and several alternatives has been analyzed, i.e. (i) upgrade and build refinery through Pertamina’s internal funding, (ii) upgrade and build refinery through integrated cooperation with strategic partner from upstream until downstream business (strategic alliance), or (iii) import fuel to meet national fuel shortages. For each of these alternatives would have a positive and negative impact for Pertamina's business. Taking into account Pertamina's financial capabilities, external and internal conditions of Petamina and international oil and gas market conditions, Pertamina considers the strategic alliance scheme to seek business partners with vision and mission in line with Pertamina's strategic objectives. The business structure to be developed in cooperation with business partners consists of share ownership structure, the structure of project operational implementation, the structure of project financing