PT Pertamina (Persero) is expanding its business collaboration with SINOPEC, a Chinese state-owned energy company, to accelerate the energy transition commitment and enhance global business development opportunities. This is marked by the signing of a Memorandum of Understanding (MoU) between President Director & CEO of PT Pertamina (Persero), Nicke Widyawati, and Ma Yongsheng, the Chairman of Sinopec Group, in Shanghai, China last week.
The MoU between the two state-owned enterprises from Indonesia and China covers various business activities, ranging from upstream to downstream, including new and renewable energy (NRE), and human resources capabilities development. In the upstream sector, Pertamina and Sinopec will expand their collaboration in activities such as the unconventional hydrocarbons development, carbon capture utilization and storage (CCUS), enhanced oil recovery (EOR), and ultra-deep drilling. This includes strengthening research and development activities and upstream business development. Meanwhile, collaboration in the downstream sector includes both fuel and non-fuel businesses, lubricants, aviation, petrochemicals, as well as transportation and logistics. As part of the collaboration in the NRE sector, both parties will explore potential in geothermal energy, hydrogen, and solar power development. Additionally, there is an agreement to enhance development capabilities on both sides.
During this occasion, Nicke Widyawati, President Director & CEO of PT Pertamina (Persero), emphasized the importance of collaboration with strategic partners to accelerate the company's business during the current energy transition era.
“Amid challenges posed by climate change and energy transition, collaboration with partners is crucial to address these issues and accelerate Pertamina's business growth through the transfer of knowledge and technology.”
Nicke further explained that SINOPEC is one of the International Oil and Gas Companies with expertise in CCUS, unconventional hydrocarbon, petrochemicals, hydrogen, and more. This allows Pertamina to learn and develop its business.
Previously, Pertamina Hulu Energi as one of Pertamina Sub Holdings has signed a cooperation agreement with the upstream sector of SINOPEC. Therefore, the current collaboration is expected to strengthen the implementation of collaboration between the two companies.
Ma Yongsheng, the Chairman of Sinopec Group affirmed the current mutual cooperation, said that Sinopec highlights mutual cooperation, believes that the global energy transition requires continued cooperation and encourages the teams from both sides to strive for better cooperation, and in person arranged the senior representative group of Pertamina to visit the Shengli oilfield. After introducing Sinopec's leading technologies in deep and ultra-deep exploration and development, shale oil and gas, renewable energy and CCUS, Chairman Ma Yongsheng proposed both sides to designate the chief coordinators from each side, establish cooperation mechanisms according to the signed MoU and start the next phase of work as soon as possible. Finally Chairman Ma Yongsheng welcome the CEO of Pertamina (Persero) to visit the headquarters of Sinopec Group at Beijing.
In addition to signing a cooperation agreement with Sinopec, the CEO of PT Pertamina (Persero) was also invited to be a Keynote Speaker at the Sinopec Forum with the theme "Managing Energy Transition: Through Partnership & Collaboration."
During the forum, Nicke outlined that Indonesia still faces several challenges in achieving energy security, such as dependence on fossil fuels, declining oil production, and the continuous increase in national energy demand.
"Energy security is a top priority for Indonesia, so we need to reduce dependence on imports by diversifying the energy mix, optimizing local energy resources while expanding access to cleaner energy sources." Nicke stated.
According to Nicke, Indonesia is a strategic pathway for the global supply chain in energy transition, rich in renewable energy sources and essential materials needed for energy transition, such as Nickel, Bauxite, Copper, including the potential for NRE, Natural Based Solution (NBS), and CCUS.
Nicke mentioned that to harness Indonesia's significant potential, Pertamina plays three crucial roles in shaping the energy landscape. First, ensuring Indonesia's energy resilience by increasing supply capacity to support economic growth. Second, mobilizing domestic resources to reduce the trade deficit in oil and gas by increasing the use of domestic energy sources. Third, undertaking decarbonization, energy efficiency, and energy transition, with a Net Zero Emission (NZE) target.
"Pertamina has developed a comprehensive strategic initiative, covering decarbonization of operations, establishing low-carbon emission businesses, and implementing carbon reduction programs. Our strong support for NZE involves transforming the way we do business and manage company operations to prioritize sustainability," said Nicke.
However, Nicke noted that Indonesia still faces obstacles in accelerating energy transition, such as access to competitive financing, technological advancements, early-stage funding, and improving human resource capabilities.
"Therefore, to truly succeed in this energy transition, we recognize the importance of appropriate support and encouragement through strategic partnerships. I believe that sustainable businesses are built through the strength of collaboration and partnerships," Nicke concluded.
Following attending the Forum, Sinopec hosted Pertamina team to visit CCUS project operated by Sinopec in Shengli field, CEOR operation to increase production and hydrocarbon reserves and the laboratory equipment & milestone of achievements in unconventional hydrocarbon area. Both parties discussed those projects in-depth to unlock collaboration potentials between two companies.
Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.