press release Pertamina Implements The First Lifting of Chevron’s Crude Oil in Rokan Block

Jakarta, January 15, 2019 - PT Pertamina (Persero) will carry out the first lifting of crude oil from PT Chevron Pacific Indonesia (PT CPI) in Rokan Block, which will be processed in domestic oil refineries owned by Pertamina. During this time, most of the Production Sharing Contract's (PSC) crude oil, such as PT CPI, is exported, while on the other hand Pertamina still must import crude oil and condensate around 342,000 barrels per day. With the issuance of Minister of Energy and Mineral Resources regulation No. 42/2018, the crude oil of PSC is prioritized to be sold to Pertamina and processed at domestic refineries.

The crude oil produced by the Rokan Block, Sumatran Light Crude (SLC) and Duri Crude, is in accordance with the Pertamina Oil Refinery configuration, so can increase yield of valuable products at Pertamina Refinery. In the initial phase, for the period January to June 2019, the estimated volume is estimated at 2.5 million barrels per month.

PT Pertamina's Managing Director, Nicke Widyawati, explained that Pertamina would maximize the efforts to absorb crude oil from PSCs to meet domestic refinery needs, while at the same time suppressing crude oil imports. For crude purchases from the Rokan Block Fields, the first oil lifting will begin on January 15, 2019.

Furthermore, Nicke added, since the issuance of the Government's directive assigning Pertamina to purchase crude, we made a deal with the PSC, one of them was PT CPI. This step is important as an effort to meet national energy security. "We thank PT CPI for achieving this agreement. The B to B relationship and collaboration between the two parties is expected to be even closer," Nicke said.

With the purchase of crude oil from the Rokan Block Fields, Nicke added, Pertamina will supply the needs of crude oil SLC and Duri to be processed in the Pertamina refinery besides Kasim-Sorong.

"We refer to the direction of the Government and have submitted a proposal expressing interest in the PSC Contractors to buy their crude. Purchases are made based on business to business principles," said Nicke.

"PT Chevron Pacific Indonesia welcomes the collaboration with Pertamina. Blok Rokan is the largest oil producer in Indonesia and this cooperation framework provides benefit to all relevant parties, including the Government and the people of Indonesia. With this collaboration, we officially apply the regulation on PSC’s crude oil sale for domestic needs," said Albert Simanjuntak, President Director of PT Chevron Pacific Indonesia.

Crude oil purchase agreement also gets the attention of the Ministry of Energy and Mineral Resources, the Director General Djoko Siswanto hope this cooperation can be developed by Pertamina with other PSC.

“This is a great example, the production of Rokan block as the largest producer in Indonesia can be utilized for domestic needs. This makes our energy sovereignty even better,” said Djoko.

SKK Migas supports Pertamina’s purchase of crude oil from PT CPI (Rokan Block). In addition to implementing ESDM Ministerial regulation no. 42 of 2018, prioritizing the fulfillment of domestic needs by Pertamina is something that strengthens the implementation of the Domestic Market Obligation that has been applied to the Indonesian upstream oil and gas industry.

Head of SKK Migas, Dwi Soetjipto, explained that amid increasing domestic oil consumption, SKK Migas will continue to encourage Pertamina's efforts to reduce imports by purchasing crude oil produced by Indonesia's own oil fields, which are operated by the PSCs.

"The use of crude oil from Indonesian fields is a good step to reduce crude oil imports and to improve the current trade balance. It is expected that other PCS will follow this step, selling their part of crude oil to Pertamina, while still promoting good Business-to-Business principles, and optimizing State revenues," Dwi said.

Since the introduction of the ESDM Regulation Number 42 of 2018 concerning the Priority of Petroleum Utilization for Fulfilling Domestic Needs which came into force on September 5, 2018, apart from PT CPI, Pertamina has also made agreements with other PSC such as; RH Petrogas Limited, PT SPR Langgak, PetroChina International Jabung Ltd, PT Bumi Siak Pusako, SAKA Pangkah Indonesia Ltd, PT Energi Mega Persada Tonga, Petronas Carigali Ketapang I Ltd, Husky CNOOC Madura Ltd and PT Energi Mega Persada Tbk. All these efforts can reduce imports of crude oil and condensate by around 115,000 barrels per day and are expected to reduce import purchases to 250,000 barrels per day.

Contact: Sonitha Poernomo, Manager Corporate Communications, Jakarta | Email: soenithapoernomo@chevron.com