PROPOSED BUSINESS STRATEGY FOR PERTAMINA RU V BALIKPAPAN FACING CHALLENGES IN THE CRUDE OIL REFINING INDUSTRY

• Main Author: Heru Setiadi, Umar
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/68295
• Institution: Institut Teknologi Bandung

The national energy industry is currently undergoing a transition process. Based on Government data, the oil and gas market share will continue to decline in line with the increase in the transition of electrical energy and new renewable energy (NRE). However, demand for oil and gas will continue to increase significantly due to an increase in population. Pertamina Refinery Unit V (RU V), located in Balikpapan City, East Kalimantan, is facing several challenges that affect its business. Domestic crude oil production (upstream) is predicted to decline in the next 10 years, causing the RU V refinery to import more crude oil as feedstock. Most of the imported crude oil is sour crude (high Sulfur content), while the RU V refinery is designed only to process sweet crude (low Sulfur content) which is more expensive so that it will reduce the company's profit in the future. The demand for fuel and petrochemical products in Indonesia is currently still high, where Indonesia still imports 40% of fuel products and 40% of petrochemical products. The RU V refinery still uses old technology with low conversion rates resulting in low profits. The RU V refinery is required to produce products that are more environmentally friendly. To face the challenges above, the company need the appropriate business strategy to generate better profits and become more competitive in the future. This study aims to find the appropriate business strategy for the company. VRIO analysis and Business Model Canvas were used to determine the internal business environment, while PESTLE and Porter's Five Forces were used to determine the external business environment. Then summarized in a SWOT analysis and uses a business strategy formulation through 3 stages: Stage 1 (Input) consists of an Internal Factor Evaluation (IFE) and External Factor Evaluation (EFE) Matrix, stage 2 (Matching) consists of a SWOT Matrix and Internal-External (IE) Matrix, stage 3 (Decision) using the Quantitative Strategic Planning Matrix (QSPM). The result of the QSPM Decision Stage, the appropriate business strategy is market development, which consists of increasing the capacity & flexibility of crude oil processing and upgrading refinery technology. With this strategy, the RU V refinery is expected to be more competitive and generate better profits in the future.