AR Pertamina 18.eng Web - REV CEO

Annual Report
2018
STRENGTHENING COMMITMENT
SECURING ENERGY
THEME
STRENGTHENING COMMITMENT,
SECURING ENERGY
In line with the massive development in stakeholders in creating synergies in
various fields, the Government has taken order to contribute to the national interest.
part to spur growth of energy supply in Pertamina believes that the natural resources
order to meet the national demand. This is available in Indonesia can be optimized as
a challenge for Pertamina, which has set sources of energy.
a commitment to being at the forefront of
supporting the government's aspiration to The obtaining of operatorship rights for
realize national energy independence. Mahakam Block and Rokan Block as well as
the merger of PT Perusahaan Gas Negara
In 2018, Pertamina firmed up its Tbk as a subsidiary of Pertamina have
commitment to secure the supply of further boosted Pertamina's fighting spirit
energy with a view to balance the growth to realize national energy security and
of population and national economy independence.
growth. With its long standing experience
and capacity, Pertamina engages all
2
Annual Report 2018
PT Pertamina(Persero)
3
SECURING ENERGY
CONTINUITY OF THEMES
Introduction Corporate Governance
Management Report Corporate Social Responsibility
Company Profile Financial Statements
Management Discussion and Analysis Glossary Of Terms
20 20
14 15
INSPIRING INDONESIA REENERGIZING SPIRIT,

TO THE WORLD STRENGTHENING COMMITMENTS
In 2014, Pertamina faced a number of challenges from The sharp decline in global crude prices since early 2015
negative impact due to the decline in the world oil prices presented considerable challenges to oil and gas companies
to the limited room for growth due to political changes, including Pertamina. To maintain operational stability in those
government policies, and bureaucratic licensing. However, challenging times, Pertamina embarked on the 5 Strategic
Pertamina as a world-class company managed to address all Priorities program: expansion in upstream, efficiencies at all
these challenges and stood strong as the Nation’s enterprise lines of activity, increasing refinery capacity, development
providing inspiration for Indonesia. of infrastructure & marketing, and improvement of financial
structure.
Pertamina consistently implemented the “aggressive upstream,
profitable downstream“ growth strategy, with emphasis With breakthrough project initiatives in the 5 Strategic
on efficiency and production optimization as well as the Priorities, Pertamina was able to show satisfactory
strengthening of GCG. The theme of “Inspiring Indonesia to performance in 2015 in terms of operations, financial
the World” in Annual Report 2014 was chosen to convey and non-financial. The year 2015 was thus a successful
the movin forward of global energy issues and to inspire proving ground for Pertamina: notwithstanding the crisis
others as an energy provider. Obviously, this step needs situation, our fighting spirit remained undaunted throughout
to be supported by all stakeholders to jointly address the the organization, strengthening our resolve to strive ever
challenges, manage opportunities, and share lessons learned harder towards our common commitments in ensuring energy
on the international energy stage. self-sufficiency for the benefit of the people and nation of
Indonesia.
4
Annual Report 2018
CONTINUITY OF THEMES
20 20
16 17
EMBRACING CHANGE, MOVING.

LEVERAGING CHALLENGES FURTHER.
The declining world oil price has brought a great change Pertamina has demonstrated its constant reliability in
into the global economic and impacted on decelerated addressing the global challenges being faced in the oil and
performance of the world’s corporations. Pertamina interprets gas industry, where the volatility of world oil prices creates a
each challenge as part of a business dynamic that encourages condition that poses an ongoing challenge for the Company.
us to be more resilient, more agile and more efficient in Pertamina has implemented various accurate strategies in
facing those changes. In the upstream sector, the low oil price order to confront these tough conditions; subsequently the
becomes an opportunity to continue to expand, including Company continues to able to move forward by posting a
acquisition of international oil and gas blocks to secure the healthy financial performance in 2017.
supply of crude oil as an effort to support national energy
security. In the downstream sector, Pertamina continues to Furthermore, the overall ability of Pertamina to survive in this
revitalize and to build new refineries to produce quality strenuous environment has served to enhance the Company’s
products at the most efficient production costs. Operational reliability and readiness in addressing any future changes in
excellence supported by efficiency and increased value the global situation.
added through breakthrough project initiatives, has generated
significant performance contribution of both upstream and For Pertamina, 2017 also marks its 60 years of work as an
downstream sectors as well as financial results that exceed oil & gas mining company that has been able to transform
our expectations. into a leading energy company. With a variety of experiences
and capabilities that have been constantly honed over the last
With improving financial structure, Pertamina has continued six decades, Pertamina will continue to advance through the
its upstream investment, processing and development of next decades so as to re-achieve various accomplishments
downstream infrastructure to sustain long-term growth. With its and other significant achievements, in order to be able to help
competence and experience, Pertamina is confident to move elevate the nation to an even higher level of prosperity.
forward to realize the vision to become a world-class national
energy company.
5
SECURING ENERGY
Contents
2 Theme 11 Bonds Higlights

4 Continuity of Themes 12 Awards
6 Contents 14 Certifications
8 Performance Highlights 2018 17 Event Highlights
10 Financial Performance Highlights
10 Operational Performance Highlights
MANAGEMENT REPORT
26 Board of Commissioners Report 32 Board of Directors Report
COMPANY PROFILE
44 Corporate Identity 58 Products and Services

46 Company History 59 Board of Commissioners Profile
48 Vision, Mission, Goals and Values 63 Board of Directors Profile
49 Corporate Culture 70 List of Subsidiaries and Associated Companies
50 Organization Structure 72 Corporate Group Structure
52 Milestone 74 Supporting Functions
54 Line of Business
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Annual Report 2018
MANAGEMENT DISCUSSION AND ANALYSIS
88 Economic Review 118 Financial Performance Review

92 Industry Review
96 Business Performance Review
CORPORATE GOVERNANCE
138 Commitment to the Implementation of Good 170 Secretary of the Board of Commissioners
Corporate Governance (GCG) 171 Corporate Secretary
142 General Meeting of Shareholders (GMS) 173 Internal Audit
148 Board of Commissioners 176 Public Accountants
155 Independent Commissioner 177 Risk Management
156 Board of Directors 184 Internal Control System
161 Affiliation Relationship of the Board of 187 Code of Conduct
Commissioners, Board of Directors and 188 Anti-Gratification Policy
Controlling Shareholders 188 Report on Assets of State Officials (LHKPN)
162 Diversity of Composition of the Board of 189 Policy Regarding Participation in Politics
Commissioners and Board of Directors 190 Whistleblowing System
162 Audit Committee 192 Information and Clarification of the Bad
165 Nomination and Remuneration Committee Governance Practices
167 Risk Management Monitoring Committee
CORPORATE SOCIAL RESPONSIBILITY
196 Corporate Social Responsibility
Financial Statements
204 Financial Statements

380 Glossary of Terms
7
SECURING ENERGY
PERFORMANCE HIGHLIGHTS 2018
Description:
PERTAMAX TURBO
• Italy
UPSTREAM UPSTREAM
PRODUCTION EXPLORATION
• Malaysia • Colombia
• Iraq • Namibia
• Algeria • Italy
• Nigeria • France
• Tanzania • Venezuela
• Gabon • Canada
DOWNSTREAM LUBRICANTS
• Australia (Branch office) • Bangladesh
• Timor Leste • Nepal
• Singapore • Yemen
• Philippines • Japan
• Malaysia • Italy
• Cambodia • Nigeria
• Myanmar • South Africa
• Vietnam • China
• Thailand (Plant)
DOWNSTREAM AVIATION FUEL

• Netherlands • Malaysia
• Saudi Arabia • Thailand
• United Arab Emirates - China • Australia
• Hong Kong • Singapore
• South Korea • South Asia
• Cambodia
DOWNSTREAM PETROCHEMICALS
• Malaysia • Europe
• Cina
• India
8
Annual Report 2018
9
SECURING ENERGY
FINANCIAL PERFORMANCE HIGHLIGHTS
(in USD million)
Description 2018 2017* 2016* 2015** 2014**
Sales and Other Operating Revenues 57,934 46,001 39,812 41,763 69,996
Cost of Sales and Other Direct Costs 48,714 37,625 30,264 35,790 63,347
Operating Expenses**
• Selling and Marketing Expenses 1,643 1,590 1,340 990 1,092
• General and Administrative Expenses 1,330 1,599 1,509 1,062 1,119
Operating Income 6,247 5,187 6,699 3,921 4,438
Net Profit Before Effects of Merging Entity’s Profit 2,636

2,553 3,163 1,442 1,477
Adjustment
EBITDA 9,204 7,256 8,471 5,130 5,728
Total Assets 64,718 57,439 53,976 45,519 50,696
Total Liabilities 35,108 30,426 28,731 26,044 31,881
Total Equity 29,610 27,013 25,245 19,475 18,815
* Restated, due to the consolidation of PT Perusahaan Gas Negara Tbk ("PGN") and the reclassification of certain accounts
** Excluding consolidation with PT Perusahaan Gas Negara Tbk ("PGN")
OPERATIONAL PERFOMANCE HIGHLIGHTS

UPSTREAM PERFORMANCE
Description Unit 2018 2017 2016 2015 2014
Oil Production MBOPD 393 342 312 278 270
Gas Production MMSCFD 3,059 2,035 1,961 1,902 1,613
Oil and Gas Production MBOEPD 921 693 650 607 549
Additional Reserves Proven (P1) MMBOE 426 314 227 79 282
REFINERY PERFORMANCE AND DEVELOPMENT

Crude Oil, Gas, and Intermediate

MMBBL 337 324 328 306 314
Product Refinery
Fuel Production MMBBL 279 263 266 241 241
Non-fuel Production MMBBL 29 29 26 23 22
MARKETING PERFORMANCE
Fuel Sales Million Kilo Liter 70 67 65 62 65
Non-Fuel Sales Million Kilo Liter 16 16 15 14 14
Gas Sales Volume BBTU 1,122,623* 823,769 708,684 705,729 701,724
Gas Transportation Volume BSCF 777* 502 522 531 508

*including PGN
10
Annual Report 2018
BONDS HIGHLIGHTS
Pertamina has issued Global Bonds throughout the years 2011-2014 and 2018 as well as listing the bonds on
the Singapore Exchange (Singapore Exchange/SGX). Up to the end of 2018, the principal amount of Pertamina
global bonds amounted USD9,262 million. During the years 2015-2018, Pertamina has exercised buy back most
of the senior bonds amounting USD238 million.
Pertamina Pertamina Pertamina Pertamina Pertamina Pertamina Pertamina Pertamina

Global Global Global Global Global Global Global Global
Description Bond Bond Bond Bond Bond Bond Bond Bond
2011 2011 2012 2012 2013 2013 2014 2018
PTM 2021 PTM 2041 PTM 2022 PTM 2042 PTM 2023 PTM 2043 PTM 2044 PTM 2048
23 May 27 May 3 May 3 May 20 May 20 May 30 May 07 Nov

Issue Date
2011 2011 2012 2012 2013 2013 2014 2018
23 May 27 May 3 May 3 May 20 May 20 May 30 May 07 Nov

Due Date
2021 2041 2022 2042 2023 2043 2044 2048
Tenor 10 Years 30 Years 10 Years 30 Years 10 Years 30 Years 30 Years 30 Years
Amount of
USD 1.000 USD 500 USD 1.242 USD 1.222 USD 1.615 USD 1.433 USD 1.500 USD 750
Outstanding
Million Million Million Million Million Million Million Million
Bonds
Coupon 5.250% 6.500% 4.875% 6.000% 4.300% 5.625% 6.450% 6.500%
Issue Price 98.09% 98.38% 99.41% 98.63% 100% 100% 100% 98.06%
Ratings at Issuance:
BB+ BB+ BB+ BB+ BB+ BB+ BB+

S&P BBB- (Stable)
(Positive) (Positive) (Positive) (Positive) (Positive) (Positive) (Positive)
BBB+ BBB+
Fitch BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB (Stable)
(Positive) (Positive)
Baa3 Baa3 Baa3 Baa3 Baa3 Baa2

Moody’s Ba1 (Stable) Ba1 (Stable)
(Stable) (Stable) (Stable) (Stable) (Stable) (Stable)
Most Recent Ratings
S&P BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB- (Stable) BBB- (Stable)
Fitch BBB (Stable) BBB (Stable) BBB (Stable) BBB (Stable) BBB (Stable) BBB (Stable) BBB (Stable) BBB (Stable)
Baa2 Baa2 Baa2 Baa2 Baa2 Baa2 Baa2 Baa2

Moody’s
(Stable) (Stable) (Stable) (Stable) (Stable) (Stable) (Stable) (Stable)
11
SECURING ENERGY
AWARDS
No DATE NAME OF AWARD RATING AND CATEGORY AWARDED BY
Management Institutions of
January Lifetime Achievement Economic and Business Faculty,
1
17, 2018 Award University of Indonesia (LM FEB
UI).
February Sustainability Reporting Winner of Best SR for Oil and Gas National Center Sustainability
2
24, 2018 Award (SRA) Category Reporting (NCSR)
Gold Champion in the field of

March 8, WOW Brand Festive Day resources and energy for the category
3 MarkPlus.Inc
2018 2018 of Non-Subsidized Fuel - Pertamax
brand
Silver for the Corporate PR Program

Category for the corporate
Public Relations
March 29, communication program of the Tuntong
4 Indonesian Award (PRIA) PR Indonesia
2018 Laut and Javan gibbon Biodiversity
2018
Conservation
For the Category of Contribution

April 6, Award from the Governor
5 to South Sulawesi Development in The Governor of South Sulawesi
2018 of South Sulawesi
Environmental Management
March 29, PR Indonesia Awards

6 Gold for Sustainability Report Category PR Indonesia
2018 2018
April 26, Intellectual Property (IP) Enterprise World Intellectual Property

7 WIPO Awards 2018
2018 Trophy Category Organization (WIPO)
April 26,
8 SOE Ministry
2018 SOE Award Most Number of Patents in Indonesia
Brand Finance TOP 100 Most Valuable Indonesian Brands 2018

May 31, SWA in collaboration with Brand
9 Most Valuable Indonesian with USD 2.028 million Brand Values &
2018 Finance
Brands 2018 AA- Brand Rating
The Asian Regional category for the

Environmental Education Program
for Children or Program Pendidikan
June, 29 Lingkungan untuk Anak (PELITA titled
10 The Peer Awards Informatology Ltd, Inggris.
2018 "Green Education for Children-Nature
Based Preschool" in the category
of "Corporate Responsibility" sub-
category "Educating Community".
Indonesia Green 3 Best Companies awarded

July, 11 SWA Magazine and Kehati
11 Company Achievement the Indonesia Green Company
2018 Foundation
2018 Achievement 2018
August 3, The Best Contact Center Indonesia Contact Center

12 Platinum Accurate Team (mens double)
2018 Indonesia 2018 Association (ICCA)
12
Annual Report 2018
AWARDS
No DATE NAME OF AWARD RATING AND CATEGORY AWARDED BY
August 10, 2nd place in the 2018 Anugerah Ministry of Research, Technology
13 Anugerah IPTEK 2018
2018 IPTEK for the category of Abyudaya and Higher Education
Anugerah Indonesia’s Indonesia’s Best Business Practices

August 29, Mix MarComm Magazine, SWA
14 Best Corporate Social Category with Pertamina New and
2018 Media Group
Initiatives 2018 Renewable Energy Program
Anugerah Indonesia’s Indonesia’s Best Corporate Philanthropy

August 29, Magazine Mix MarComm SWA
15 Best Corporate Social Category with CSR Program “Sekolah
2018 Media Group
Initiatives 2018 Tapal Batas Sebatik”
September Ministry of Energy and Mineral

16 Subroto Award 2018 Special Innovation in Industry Category
28, 2018 Resources (ESDM)
October Asia Pasific Contact Centre Asso

17 11th APCCAL Expo 2018 Recognition of Performance Excellence
31, 2018 ciation Leaders (APCCAL)
Winner for the Category of Special

October ASEAN Energy award The 36th ASEAN Ministers on
18 Submission Energy Management in
29, 2018 2018 Energy Meeting (aMEM)
Industry
December Marketeers Editor’s The Breaktrough Application Of The

19 MECA 2018
6, 2018 Choice Award 2018 Year Category
Korea Invention Promotion

Association (KIPA) supported by
Korea Intellectual
December Seoul International Property Organization (KIPO),
20 Gold Medal
6-9, 2018 Invention Fair (SIIF) 2018 World Intellectual Property
Organization (WIPO), and
International Federation of
Inventors Association (IFIA).
Korea Invention Promotion

Association (KIPA) supported by
Korea Intellectual
December Seoul International Property Organization (KIPO),
21 Special Award
6-9, 2018 Invention Fair (SIIF) 2018 World Intellectual Property
Organization (WIPO), and
International Federation of
Inventors Association (IFIA).
PT Pertamina (Persero) President

Director Nicke Widyawati was named
December Indonesia Most Admired the Most Admired CEO 2018 for the
22
14, 2018 CEO (IMAC) 2018 category of Excellent Leadership for
Information Communication Technology
(ICT) Optimization
13
SECURING ENERGY
CERTIFICATIONS
Operational
Unit/ Business Area Certification Validity Date Certification Body
Unit
Shipping Head Office ISO 9001:2015 03/12/2018 Lloyd's

Head Office ISO 9001:2015 19/06/2018 BSI
– Marketing
Directorate Petrochem Head Office ISO 14001:2015 19/06/2018 BSI
ISO 45001:2018 19/06/2018 BSI
Fuel Terminal Medan (except

ISO 9001:2015 14/09/2018 BSI
Belawan)
Fuel Terminal Tj. Uban ISO 9001:2015 14/09/2018 BSI
Fuel Terminal P. Sambu ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Teluk Kabung ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Dumai ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Sei Siak ISO 9001:2015 14/09/2018 BSI

Marketing
Operation Fuel Terminal Sibolga ISO 9001:2015 14/09/2018 BSI
Region I – North
Sumatera Region Fuel Terminal Lhoksemawe ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Krueng Raya ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Kisaran ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Pematang Siantar ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Meulaboh ISO 9001:2015 14/09/2018 BSI
ISO 14001:2015 27/12/2018 BSI

Pangkalan Susu
ISO 45001:2018 27/12/2018 BSI
Marketing
Operation Region
Panjang ISO 9001:2015 10/08/2018 BSI
II – South Sumatera
Region
ISO 14001:2015 01/09/2018 Llyod's

Depot LPG Tanjung Priok
ISO 45001:2018 01/09/2018 Llyod's
ISO 14001:2015 14/09/2018 BSI
Fuel Terminal Cikampek ISO 45001:2018 29/11/2018 BSI
ISO 9001:2015 14/09/2018 BSI

Marketing
Operation Region III Depot LPG Balongan ISO 45001:2018 02/06/2018 AJA
– West Java Region
ISO 9001:2015 14/09/2018 Llyod's
Fuel Terminal Jakarta Group
ISO 14001:2015 14/09/2018 Llyod's
Fuel Terminal Tasikmalaya ISO 9001:2015 14/09/2018 BSI
Fuel Terminal T. T - Tjg. Gerem ISO 9001:2015 15/09/2018 DNV
Fuel Terminal Balongan ISO 9001:2015 14/09/2018 BSI
Marketing ISO 14001:2015 14/09/2018 BSI

Operation Region
Fuel Terminal Cilacap ISO 45001:2018 31/08/2018 BSI
IV – Central Java
Region ISO 9001:2015 14/09/2018 BSI
14
Annual Report 2018
CERTIFICATIONS
Operational
Unit
ISO 9001:2015 14/09/2018 BSI

Fuel Terminal Maos
ISO 14001:2015 14/09/2018 BSI
ISO 9001:2015 14/09/2018 BSI
ISO 14001:2015 14/09/2018 BSI

Fuel Terminal Pengapon
Sucofindo dan Dir.
SMP 5/24/2018
Marketing Bimas Mabes Polri
Operation Region IV
ISO 9001:2015 14/09/2018 BSI
– East Java Region Fuel Terminal Boyolali
ISO 14001:2015 14/09/2018 BSI
Fuel Terminal Rewulu ISO 9001:2015 14/09/2018 BSI
ISO 9001:2015 14/09/2018 BSI

Fuel Terminal Tegal
ISO 14001:2015 14/09/2018 BSI
Fuel Terminal Lomanis ISO 14001:2015 14/09/2018 BSI
ISO 9001:2015 14/09/2018 BSI

Tj. Perak
ISO 14001:2015 14/09/2018 BSI
ISO 9001:2015 14/09/2018 BSI

Manggis
ISO 14001:2015 14/09/2018 BSI
Fuel Terminal Surabaya Group ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Tuban ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Tj. Wangi ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Malang ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Madiun ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Camplong ISO 9001:2015 14/09/2018 BSI

Marketing
Operation Fuel Terminal Manggis ISO 9001:2015 14/09/2018 BSI
Region V – East
Java, Bali and Nusa Fuel Terminal Sanggaran ISO 9001:2015 14/09/2018 BSI
Tenggara
Fuel Terminal Ampenan ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Badas ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Bima ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Tenau ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Maumere ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Atapupu ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Kalabahi ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Waingapu ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Reo ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Ende ISO 9001:2015 14/09/2018 BSI
Depot LPG Balikpapan ISO 9001:2015 14/09/2018 BSI

Marketing
Operation Region Fuel Terminal Balikpapan ISO 45001:2018 17/11/2018 BSI
VI – Kalimantan
Fuel Terminal Samarinda ISO 45001:2018 17/11/2018 BSI
Marketing Depot LPG Makassar ISO 45001:2018 17/01/2018 BSI

Operation
Region VII – Fuel Terminal Pare2 ISO 45001:2018 11/11/2018 BSI
Sulawesi
15
SECURING ENERGY
CERTIFICATIONS

Operational
Unit
ISO 9001:2015 14/09/2018 BSI

Fuel Terminal Wayame
ISO 45001:2018 14/09/2018 BSI
ISO 9001:2015 14/09/2018 BSI

Fuel Terminal Jayapura
Marketing ISO 45001:2018 14/09/2018 BSI
Operation
Region VIII – Papua ISO 9001:2015 14/09/2018 BSI
Fuel Terminal Sorong
ISO 45001:2018 14/09/2018 BSI
ISO 9001:2015 14/09/2018 BSI

Fuel Terminal Biak
ISO 45001:2018 14/09/2018 BSI
ISO 9001:2015 06/06/2018 TUV Nord
Kamojang ISO 14001:2015 06/06/2018 TUV Nord

PT PGE
ISO 45001:2018 06/06/2018 TUV
Lahendong ISO 14001:2015 14/09/2018 BSI
Technical Document Management

ISO 9001:2015 14/09/2018 TUV Nord
PHE ONWJ
PHE ONWJ
Project Quality Managemenr
ISO 9001:2015 17/02/2018 TUV Nord
Services, Certifications and
Permits (QA-QC Dept. Project)
PHE ONWJ
Provision of Fabrication,
ISO 9001:2015 17/02/2018 TUV Nord
PT PHE Installation & Maintenance
Services (Dept. E&I)
Gas Production and Condesate/ ISO 9001:2015 02/09/2018 TUV Nord

Jakarta Office & Field JOB
ISO 14001:2015 13/11/2018 TUV Nord
Pertamina Talisman Jambi
Merang ISO 45001:2018 13/11/2018 TUV Nord
Production of Crude Oil & Gas

JOB Pertamina Petrochina East ISO 14001:2015 14/09/2018 TUV Nord
Java
PT PEP EP IEC 17025:2008 17 Juni 2018 KAN
Refinery Unit II – ISO 9001:2015 14/09/2018 TUV Nord

All
Dumai ISO 14001:2015 14/09/2018 TUV Nord
Refinery Unit III –

All SMP 25/05/2018 Sucofindo
Plaju
Refinery Unit IV – ISO 9001:2015 14/09/2018 TUV Nord

All
Cilacap ISO 14001:2015 14/09/2018 TUV Nord
Refinery Unit VI – All ISO 45001:2018 26/3/2018 SGS

Balongan All SMP 10/09/2018 Sucofindo
16
Annual Report 2018
EVENT HIGHLIGHTS
January 01, 2018
Pertamina Has officially Been Designated to Operate the

Mahakam Block
Mahakam Working Area Management has been officially transferred
from Total E & P Indonesie (TEPI) to PT Pertamina (Persero). The Mahakam
Working Area operatorship handover began with the surrendering
of Mahakam Working Area operatorship from TEPI & Inpex to the
government represented by SKK Migas Chairman Amien Sunaryadi, to
be handed over to Pertamina, represented by Upstream Director Syamsu
Alam, on Monday (1/1/2018), in Balikpapan.
February 5,
Januari 2018
2018
Pertamina Started to Supply LNG to Bangladesh Pertamina EP Built First 3D Oil and Gas Museum in Indonesia
and Pakistan PT Pertamina EP Asset 2 initiated the 3D development of the Oil and Gas Museum
Cooperation in the energy sector between Indonesia and at Pertamina EP Complex Prabumulih. This museum is expected to become one of
Bangladesh and Pakistan initiated by the government since the education centers so that later the wider community may obtain knowledge of
September 2017 has started to be followed up. Pertamina upstream oil and gas comprehensively. The museum, built on an area of 4,000 m2,
has taken on a role through various LNG trading will become the first 3D oil and gas museum in Indonesia.
agreements and other cooperation with several energy
companies. One of the agreements is to supply Liquified
Natural Gas (LNG) to Bangladesh and Pakistan, which
Pertamina will carry out in both countries.
April 30, 2018
March 2018
Pertamina Lubricants Expanded its Wings to the

Land of Kangaroos
PT Pertamina Lubricants continuously attempts to
expand its business overseas. In early March 2018,
the Pertamina subsidiary opened Pertamina Lubricants
Representative Office Australia in Sydney, a strategic step
for PT Pertamina Lubricants to continue developing the
international market, strengthen global market networks
while continuing to introduce the nation’s world-class
lubricant product into the eye of the world. PLTP Karaha Unit 1 Lights Up 33 Thousand Houses in Tasik and
Surrounding Areas
Geothermal Power Plant (PLTP) Karaha Unit I owned by PT Pertamina Geothermal
Energy (PGE) with a capacity of 30 MW officially commenced its commercial
operations on April 6, 2018. The electricity production of PLTP Karaha Unit
I will illuminate 33 thousand houses in Tasikmalaya and its surroundings.
This achievement is the realization of 35,000 MW program launched by the
government, which will increase the reliability of Java-Bali transmission system with
an additional electricity supply of 227 gigawatt hours (GWh) per year.
May 20, 2018
Pertamina Has Been Officially Designated

to Operate WK Ogan Komering May 21, 2018
JAKARTA - Pertamina through its subsidiary,
PT Pertamina Hulu Energy (PHE) officially
accepted the mandate for Ogan Komering Positive Synergy Marked the Commencement
Working Area Operatorship Transfer on Sunday of Sukowati Field Operatorship Transfer
(05/20/2018). This was a follow-up to the After the contract’s expiry on February 28, 2018
signing of a Production Sharing Contract (PSC) and 6-month extension to determine the status of
between the government and Pertamina affiliates Sukowati Unitization Field operatorship, there was
on April 20 which became effective from May finally a solution. Referring to the Minister of Energy
20, 2018. and Mineral Resources Decree No. 2800/13/
MEM.M/2018 dated May 17, 2018, starting from
May 20, 2018, Sukowati Field which was previously
operated by JoB PPEJ will be fully managed by PEP.
17
SECURING ENERGY
May 31, 2018
PHE was Ready to Operate Working Areas with the Biggest Definite Commitment in History
PT Pertamina Hulu Energi (PHE) signed sharing contract that was already approved by the Ministry
of Energy and Mineral Resources (ESDM) for two production sharing contracts using the Gross Split
contract system, i.e Jambi Merang working area and Raja/Pendopo working area. The signing
was carried out by PHE Operation & Production Director Ekariza and SKK Migas Chairman Amien
Sunaryadi, witnessed by ESDM Deputy Minister Arcandra Tahar, at the ESDM Ministry Building,
Thursday (05/31/2018).
June 29, 2018

July 13, 2018 Signing of Conditional Sales Purchase
AThe agreement between PGN and Pertamina marks the integration
of PGN with Pertamina and the establishment of SOE Oil and Gas
Pertamina - UNS: Created a Battery Holding.
with 100 Km Driving Range
JAKARTA - PT Pertamina (Persero)
and Sebelas Maret University (UNS)
succeeded in producing Lithium Ion
Battery (LIB) for economical and
inexpensive electric motor drives. With
this battery, two-wheeled electric motor
vehicles can travel 80-100 kilometers at
a cost of only IDR 5,000. July 30, 2018
Pertamina Director of Investment
Planning and Risk Management Gigih 2021, Pertamina was Ready to Operate
Prakoso said that Pertamina supports the the Rokan Block
development of new renewable energy JAKARTA - PT Pertamina (Persero) welcomed the
in accordance with the Pertamina 2030 government’s decision through the Ministry of
Roadmap and in line with the global Energy and Mineral Resources (ESDM) which
policiy to reduce emissions through the entrusted the operatorship of Rokan Block to
use of eco-friendly energy such as electric this SOE. The decision was purely taken on the
vehicles. basis of business and economic considerations
after evaluating Pertamina’s proposal that was
considered better in managing the block.
July 30, 2018

Pertamina Strengthened Downstream Infrastructure in East Nusa Tenggara
Pertamina continued to strengthen downstream infrastructure in order to distribute
fuel and LPG. Pertamina Logistics, Supply Chain and Infrastructure Director Gandhi
Sriwidodo inaugurated the groundbreaking development of Maumere Fuel Terminal,
in Sikka Regency, East Nusa Tenggara, on Monday (7/30/2018). The Maumere Fuel
Terminal development project will increase the capacity of fuel tanks from 20,000
Kiloliters (KL) to more than 85,000 KL and serve as the main supply point in the East
Nusa Tenggara region
August 7, 2018
Pertamina Took Over Sanga Sanga Block

PT Pertamina (Persero) officially took over the management of Sanga Sanga
Working Area from VICO Indonesia, on Tuesday (07/08/2018). The inauguration
process of Sanga Sanga Working Area operatorship handover began with the
resignation of Sanga Sanga Working Area operatorshipt from VICO Indonesia to
SKK Migas Chairman Amien Sunaryadi, to be subsequently submitted to Pertamina
SVP Upstream Strategic Planning & Performance Evaluation Meidawati.
Sanga Sanga Working Area, in Kutai Kertanegara Regency, East Kalimantan, is

one of the 8 termination PSCs that have been handed over from the government to
Pertamina, on April 20, 2018.
18
Annual Report 2018
September 6, 2018
Pertamina Operates Southeast

Sumatra Working Area
Starting Thursday (6/9/2018), Pertamina Oktober 25, 2018
through its subsidiary PT Pertamina Hulu
Energi (PHE) officially operates 100% of
Southeast Sumatra (SES) Working Area from East Kalimantan-Attaka Working Area has
the previous operator CNOOC SES Ltd. been Officially Operated by Pertamina
Furthermore, SES Working Area is operated PT Pertamina (Persero) officially conducted East
by PHE Offshore Southeast Sumatra (PHE Kalimantan-Attaka Working Area operatorship
OSES) as a new operator. transfer from Chevron Indonesia Company (CICo),
starting at 00.00 WITA, on Thursday (10/25/2018).
The operatorship of the working area will be carried
out by PT Pertamina Hulu Kalimantan Timur (PHKT).
Symbolically the WK management handover was
November 11, 18 PHSS’ Success in the First Gross Split carried out by PT Chevron Pacific Indonesia President
LNG Cargo Lifting in Indonesia Director Albert Simanjuntak to PT Pertamina Hulu
Pertamina Hulu Sanga Sanga (PHSS) Indonesia President Director Bambang Manumayoso,
successfully carried out the initial lifting of witnessed by SKK Migas Chairman Amien Sunaryadi.
Liquid Natural Gas (LNG) sales, which is
the first LNG cargo since the implementation PHKT is a subsidiary of Pertamina Hulu Indonesia (a
of Oil and Gas Working Area operatorship subsidiary of PT Pertamina (Persero)) appointed as the
with the Gross Split scheme in Indonesia, operator of East Kalimantan-Attaka Wowrking Area
on Sunday (11/11/2018). The initial lifting for the contract period October 25, 2018 to October
volume is one ship or cargo. That’s equivalent 24, 2038.
to 146,000 cubic meters (m3).
Oktober 17, 2018 Desember 10, 2018 Green Energy Station, Pertamina's Latest
Solution at Gas Station (SPBU)
PT Pertamina (Persero) continues to be committed to
PGE President Director Inaugurates Ulubelu innovating in the digital age and renewable energy
Geothermal Information by launching Green Energy Station (GES) at Kuningan
In realizing the Company’s commitment to always grow with the gas station, Jakarta (12/10/2018). The inauguration
community, PT Pertamina Geothermal Energy (PGE) develops ceremony was attended by ESDM Minister Ignasius
geothermal education facilities in several areas of its operations, Jonan, PT Pertamina (Persero) President Director Nicke
including the Ulubelu Area. Regarding this matter, PGE President Widyawati, and other members of the Board of Directors.
Director Ali Mundakir accompanied by General Manager Support was also obtained from various sectors starting
(GM) of Ulubelu Area Dirgo Rahayu inaugurated the Ulubelu from the government through the Ministry of Industry,
Geothermal Information (UGI), which is a geothermal education SOEs Synergy with Telkom and PLN, educational institution
center for various groups, on (17/10/2018). through the University of Indonesia, electric vehicle
businesses such as BMW, Toyota, Mitsubishi, and Gesits,
as well as charging station business Bosh
December 10, December 19, 2018

2018
Realizing Green Energy, Pertamina Built the Biggest
Pertamina Inaugurated Two Capacity Combined-Cycle Steam and Gas Power Plant
Aviation Fuel Terminals in East (PLTGU) in Southeast Asia
Kalimantan The construction of an integrated gas infrastructure and Java 1
TTo improve service and resilience of Combined-Cycle Gas and Steam Power Plant (PLTGU) project
Avtur stocks at two new airports in officially began on Wednesday (12/19/2018). This was marked
East Kalimantan Province, Pertamina by the groundbreaking by the Economic Affairs Coordinating
Marketing Operation Region (MOR) Minister Darmin Nasution and PT Pertamina (Persero) President
VI Kalimantan inaugurated an Director Nicke Widyawati. The first and largest power plant in
aviation fuel terminal at Pranoto Aji Southeast Asia combines gas infrastructure (LNG-FSRU) and a
Pangeran Tumenggung (APT) Airport power plant with a capacity of 1,760 MW.
in Samarinda City and Kalimarau
Airport in Berau City.
The inauguration was held in Innovation of Green Gasoline and Green LPG, Saved
conjunction with Pertamina’s 61st Foreign Exchange USD 160 Million / year
Desember 21, 2018
anniversary commemoration on PT Pertamina (Persero) continues to innovate in encouraging the use of
Monday (12/10/2018), and eco-friendly fuels, while encouraging a reduction in imports of crude oil.
constituted a form of Pertamina’s One of the innovations implemented in the Refinery Unit III Plaju. Since
support for the SOEs are Present for early December, the refinery has been able to process CPO (Crude
the Nation” program from the SOEs Palm Oil) into Green Gasoline (eco-friendly gasoline) and Green LPG
Ministry with co-processing technology. That is to combine natural fuel sources
with fossil fuel sources to be processed in refineries to produce eco-
friendly fuels.
19
SECURING ENERGY
MANAGEMENT
REPORT
The synergy between the
Board of Commissioners
and the Board of Directors
has taken Pertamina one
step closer to realizing the
national energy security and
independence.
A couple of bulls tied to each other with
a bamboo are being ridden by a jockey in
a race against other couples of bulls. This
activity is called karapan sapi, the traditional
race of Madurese people who has the
philosophy “the fastest is the achiever”.
From the karapan sapi, we can see that in
general Madurese are hard workers
and like to be active.
Alexander Lay Tanri Abeng Archandra Tahar
Independent Commissioner President Commissioner Vice President Commissioner
22
ANNUAL REPORT 2018
PT PERTAMINA(PERSERO)
Sahala LG Suahasil N Ahmad Bambang Ego Syahrial
Commissioner Commissioner Commissioner Commissioner
23
SECURING ENERGY
Nicke Widyawati
President Director & CEO
Koeshartanto Gandhi Sriwidodo M. Haryo Yunianto Mas’ud Khamid

Human Resources Director Logistics, Supply Chain and Asset Management Director Retail Marketing Director
Infrastructure Director
24
ANNUAL REPORT 2018
Ignatius Tallulembang Basuki Trikora Putra
Refinery and Petrochemicals Mega Projects Director Corporate Marketing Director
Budi Santoso Syarif Dharmawan H. Samsu Pahala N. Mansury Heru Setiawan

Refinery Director Upstream Director Finance Director Investment Planning and Risk
Management Director
25
SECURING ENERGY
BOARD OF COMMISSIONERS REPORT

Pertamina’s performance in 2018 is also a

contribution from the supervisory function and
strategic decision-making implemented by the
Board of Commissioners.
Dear respected Stakeholders,
Our praises and gratitude be to God the Almighty for all the
blessings He has bestowed upon us all, which have enabled
Pertamina to optimally perform its duties as a corporate body
and an agent of development, despite the difficult conditions in
2018.
External Conditions
Global uncertainties in 2018 affected the global economic
86,72
”Health AA”
demand. Monetary uncertainty in the United States coupled with
the United States and China trade war gave rise to dynamics in
exchange rates. The Indonesia’s economy in 2018 showed a
Realization of Pertamina’s corporate relatively stable economic growth and well-maintained inflation.
health rating pursuant to the SOE These all provided a favorable atmosphere for the efforts to
Ministerial Decree No. KEP-100 / MBU strengthen the domestic economic recovery momentum.
/ 2002
26
ANNUAL REPORT 2018
27
SECURING ENERGY
The Government of Indonesia stated that there was no Pertamina has built up the efforts for investment
change in the price of the PSO fuel and LPG and in the starting from planning, implementation, monitoring,
PSO fuel & LPG supply and distribution scheme. This to evaluation phases. Moreover, future investment
condition caused Pertamina's performance to decline planning should be arranged more realistically and with
in early 2018. However, the Government then issued due attention to field conditions.
Presidential Regulation No 43 of 2018 (“PP 43”)
providing that Pertamina will receive reimbursement Pertamina has implemented the right strategy so
from the Government on the difference between price that the stocks of national oil and gas product are
and formula after being audited by BPK and upon the well maintained with due regard to working capital
Minister of Finance’s approval after coordinating with cost Pertamina must bear. This is made evident by,
the Minister of Energy and Mineral Resources and the among others, the results of shipping performance that
Minister of State-Owned Enterprises. exceeded the target. In addition, the processing sector
also recorded a quite good performance in 2018 in
The Government Policy in PP 43 has affected terms of Total Yield on Intake and Valuable Yield on
Pertamina’s profit and cash flows performance in Total Intake.
2018. Pertamina has acknowledged the difference in
defined price and formula price for FY2017 and 2018 In the marketing sector, Pertamina has managed to
sales in the 2018 Financial Statements because all generate an increased sales volume across all product
requirements have been fulfilled. This condition affects lines, although relatively stable in terms of market
profit performance. However, Pertamina has not yet share. This performance should be appreciated due to
received any payment and this has adversely affected the fact that we are tight competition. Pertamina has
the Company's cash flows. proven its ability to maintain market share. Pertamina is
expected to strengthen coordination with related parties
Board of Directors Performance in order to minimize external factors with the potential
Assessment to disrupt target achievement, for instance, in terms of
infrastructure.
The Board of Commissioners continues to appreciate
the Board of Directors for the good performance of
duties in facing the challenging year 2018 so that the The HSSE performance in 2018 was not completely
Company still managed to earn high profit. Pertamina satisfactory due to the fact that there were still cases
achieved net profit of USD 2.6 billion in 2018. of work related fatalities, although the frequency
was only a few. Pertamina remains consistent in
Such performance achievement continuity is greatly raising awareness of the environmental management
influenced by the consistency of the Board of Directors' surrounding the Company's operations, which has
policy to continue making efficiency in operational been marked by the increasing number of PROPER
activities. Efforts to cut losses have been consistently achievements garnered over the recent years.
carried out through preventive and control efforts. The
Board of Directors is expected to continuously prioritize
the efforts to cut losses in order to enhance the culture of
"Clean".
28
ANNUAL REPORT 2018
Supervision and Guidance Pertamina's ability to continue producing optimal
performance in 2018, in the midst of rising oil prices
Pertamina's performance achievement in 2018 is and unfavorable government policies, shows that the
also a contribution from the supervisory function Company is able to survive in difficult times. More
and strategic decision-making implemented by the stringent competition in the downstream sector has
Board of Commissioners. The Company’s Articles encouraged efforts to improve efficiency and service.
of Association do not grant the Board of Directors This is made evidenced by the increase in sales volume
full authority regarding all decisions. Rather, certain and market share in the downstream sector.
strategic decisions still require the decisions of the
Board of Commissioners and the General Meeting Pertamina plans to make a repair and renewal of its
of Shareholders to pass, including investment for distribution infrastructure so as to provide the best
equity participation in other companies, acquisition service and minimize potential losses. The activity was
of participating interest, and making changes to the carried out together with tighter monitoring of losses
corporate work plan, which are among some of the and changes in work culture, which result in significant
decisions that are not solely delegated to the Board of efficiency improvements.
Directors.
Implementation of Corporate
In discharging its supervisory duties, the Board of Governance and Corporate Social
Commissioners provides guidance and counsel to the Responsibility
Board of Directors. In fact, the Board of Commissioners
also assists in the direction for implementation of every The Board of Commissioners believes that the Company
decision granted. Several matters given strategic has consistently implemented the principles of good
direction in 2018 include: corporate governance. This commitment to corporate
1. Budget preparation, the execution and monitoring governance management is demonstrated through the
of investment that require close attention regularity of the Company’s GCG assessment in order
considering the progress of investment has to provide assurance that all aspects of governance are
remained below the specified target and many implemented. The Company seeks to ensure that GCG
projects are currently experiencing delays. There is applied in every decision taken and to become the
is urgency needed for increased capacity in foundation for the Company's activities.
project management. In addition, future investment
planning should be arranged more realistically and Good corporate governance implementation also
with due attention to field conditions. supports good performance achievement, which
2. The Board of Directors is expected to increase has been reflected in the overall Corporate Health
efforts to optimize production wells, carry out Level which combines measurements of financial,
production equipment repair and maintenance operational, and administrative performance. In 2018,
on a regular basis, and coordinate with ISC to the realization of Pertamina's health level pursuant to
optimize lifting. the SOEs Ministerial Decree No.KEP-100/MBU/2002
reached a total health score of 86.72 (the category
Overview of Business Prospects of AA (Healthy)). In addition, the Ministry of SOE,
as the Company’s Shareholder, has also established
Pertamina acknowledges that its role as a State- Owned the management performance contract based on the
Enterprise is not only to pursue profit. Pertamina also Assessment Criteria for Excellent Performance or Kriteria
plays a role in providing fuel in all regions of the country, Penilaian Kinerja Unggul (KPKU), which achieved
managing oil and gas resources and maintaining national a score of 103.67%. This means that Pertamina's
energy security. Efficiency in every line of operations and management performance in 2018 has improved
right investment decisions by promoting sound business compared to that in 2017.
principles are keys to success in carrying out the role.
29
SECURING ENERGY
The Board of Commissioners also monitors the stipulated in the Company's Articles of Association.
implementation of corporate social responsibility The Board of Commissioners submits reports on
towards the environment and the community. The the supervisory duty implementation and Board of
Company exercises its social responsibility through Commissioners' performance assessment on quarterly
Corporate Social Responsibility (CSR) activities and and annual basis to the shareholders.
the Partnership and Community Development Programs
(PKBL). CSR activities contribute to community in the The Board of Commissioners Committees have done
fields of education, health, infrastructure and living well according to the provisions of Good Corporate
environment. CSR activities are conducted to support Governance (GCG). The Committees actively work
Pertamina's operations and achievement of PROPER to analyze and respond to changes in the business
scoring across several operating units. Community environment that affect the Company's performance.
Development activities focus on providing assistance The Committee also assists the Board of Commissioners
for the purposes of education, natural disasters, in preparing the Board of Commissioners' letters
development of religious and sports facilities, and regarding requests for approval, support, advice and
public health promotion. The partnership program responses from the Board of Directors after conducting
focuses on business capital support and business an in-depth analysis process.
counseling as well market expansions for small
entrepreneurs. The Audit Committee monitors the performance of
internal audit and independent auditors in conducting
Performance Assessment of the BOARD financial statements audit, reviews the Company's
OF COMMISSIONERS Committees reports to external parties and the Company's internal
control system, and monitors the whistleblowing
Supervisory duty carried out by the Board of system. The Audit Committee assists the Board of
Commissioners is performed directly by the Board Commissioners duties of granting approval for
of Commissioners or indirectly through the Board assets deletion, monitoring Subsidiaries, monitoring
of Commissioners Committees namely the Audit operational performance, and other tasks assigned by
Committee, the Nomination and Remuneration the Board of Commissioners. The Risk Management
Committee, and the Risk Management Monitoring Monitoring Committee (PMR) monitors the performance
Committee. Oversight is carried out on operational of the upstream, downstream and investment sectors,
and strategic aspects that contribute significantly to the and also makes an analysis and recommendations
Company's performance. on strategic decisions in the investment sector. The
Nomination & Remuneration Committee (NR) assists in
The Board of Commissioners believes that the ensuring the placement of qualified personnel for key
supervisory function performed by the Board of positions in the Company, reviews the formulation of
Commissioners throughout 2018 has been carried out remuneration for Directors & Board of Commissioners,
in accordance with the provisions in the Board Manual proposals for changes to organizational structure, and
and implemented properly. The Board of Commissioners proposals for changes to the composition of Board of
carries out its role to monitor the course of the Company Directors and Board of Commissioners in Pertamina’s
and make decisions in accordance with its authorities subsidiaries.
30
ANNUAL REPORT 2018
The Committees work closely with their Management counterparts in the
related business processes. A good and harmonious partnership between
Management and the Committee encourages an effective communication and
coordination process, which then enables the smooth running of the Board of
Commissioners activities in performing its supervisory function.
Changes in the Composition of the Board of

Commissioners
In 2018 there was a change in the composition of the Board of

Commissioners. Based on the Decree No. SK-142/MBU/05/2018 dated May
30, 2018, the GMS has decided to:
1. Respectfully discharge Mr. Edwin Hidayat Abdullah.
2. Appoint Mr. Ahmad Bambang and Mr. Ego Syahrial as Commissioners.
3. Determine Mr. Alexander Lay as Independent Commissioner. Thus, the
20% minimum requirement of Independent Commissioners is already
fulfilled.
Appreciation
The Board of Commissioners would like to sincerely appreciate all Pertamina

stakeholders for their continued support to the Company's journey both in
the good and difficult times. We would also like to extend our appreciation
and gratitude to the Government of Indonesia for all the assistance provided
to Pertamina in its task to secure fuel supply throughout the country. Our
highest appreciation also goes to all Pertamina personnel in all work areas,
from the Board of Directors down to all levels for always continuing their best
capabilities to Pertamina. Our sincere appreciation is also expressed to all of
our valued customers, suppliers, and business partners, for the cooperation
and mutually beneficial relationships that have continued to endure through
the years. We sincerely hope Pertamina will continue to attain even greater
successes for the nation and become the pride of Indonesia.
On behalf of the Board of Commissioners,
Tanri Abeng
President Commissioner / Independent Commissioner
31
SECURING ENERGY
BOARD OF DIRECTORS REPORT

By Continuously Upholding The

Commitment to Delivering The Best
“Pertamina has succeeded to go through the year 2018 with
an encouraging performance achievement. The Board of
Directors would like to extend heartfelt appreciation for the trust,
commitment, and cooperation from all the Stakeholders.”
Dear distinguished Shareholders and Stakeholders,
Praises and gratitude be to the presence of God Almighty ECONOMIC CONDITIONS

for all the blessings and grace that He has bestowed
upon us all so that PT Pertamina (Persero) was able to The global economy in 2018 is characterized by
go through the challenging 2018 with an encouraging uncertainty. The trade war between the United States
performance achievement. Furthermore, allow us to (US) and China and the hike of the Fed's interest rate
provide the Board of Directors report for the Company's are suspected to be the leading cause of the global
management duties for the 2018 financial year ending on economy’s anemic movement. The trade war has resulted
December 31, 2018. in a slowdown of world trade flows. Demand for goods,
especially from China, slowed down, and on the flip side,
the flow of goods from China to various countries was
increasing as a part of the Chinese government's efforts
to seek substitution markets after the U.S. government
imposed high customs duties on China’s products.
Moreover, the hike of the Fed's interest rates has

impacted the global financial market conditions, where
investment flows are directed towards safe instruments
(risk aversion), so that the global stock markets are
corrected quite sharply.
15%
393 MBOPD
Crude Oil production in 2018
was 393 MBOPD,
increased by 15%
32
ANNUAL REPORT 2018
33
SECURING ENERGY
In the midst of these conditions, Indonesia's economy at its highest level in October to reach USD 77.6 per
was still able to grow positively. Throughout the year barrel and USD 78.1 per barrel for ICP SLC. When the
2018, Indonesia's economy grew 5.17%, higher than world oil prices dropped, ICP price was also affected
the previous year by 5.07%. This quite a good growth down to USD 54.8 and USD 55.6 per barrel for ICP
was also coupled with inflation rate sustained at a low SLC.
level of 3.13%.
Anticipating the development of world oil prices, the
In an effort to spur national economic growth, the Government of Indonesia has issued a range of oil
government faced a number of challenges, one of and gas related policies, which have an impact on
which was the weakening of the Rupiah exchange Pertamina's operations and performance. The policy
rate against the USD. In October 2018, the Rupiah was made to release pressure on Indonesia's trade
exchange rate against the USD once hit the level of Rp balance, especially from oil and gas imports, maintain
15.200/USD, the lowest since the economic crisis of the state's foreign exchange reserves and sustain
1998. people’s purchasing power.
Indonesia's trade balance of 2018 was also closed REALIZING NATIONAL ENERGY SECURITY AND
with a deficit of 8.6 billion USD due to much higher INDEPENDENCE
import growth than export growth. To anticipate this, As a state-owned enterprise company, Pertamina is at
in September 2018 the government issued a policy to the forefront of the effort to support the Government’s
enforce the extension of mandatory use of diesel or B20 program to realize national energy security and
fuel through Presidential Regulation No. 66 Year 2018, independence. Therefore, from time to time, Pertamina
one of the objectives is to suppress imports, especially continues to strengthen its commitment to developing
imports of diesel fuel. business in the new and renewable energy business
and business diversification.
OIL PRICE FLUCTUATION
Oil price movements in the Brent and WTI markets In order to realize the aspiration, in 2018 Pertamina
are still a challenge for Pertamina. In the period from acquired operatorship rights to 13 ex-terminated
January to October 2018 oil price trends tended to working areas with contract periods end in 2018–
increase with a peak of USD 84.1 per barrel (Brent) 2021 pursuant to the Energy and Mineral Resources
and USD 75.5 per barrel (WTI) in October 2018. Ministerial Regulation No. 15 Year 2015 on the
But after that, the world oil prices plunged and hit the Operatorship of Oil and Gas
lowest level of USD 51.6 per barrel and USD 43.6 Working Areas with Soon-to-expire Cooperation
per barrel in December 2018 and finally closed with a Contract, which has been amended with the Energy
price of USD 54.6 per barrel and USD 46.5 per barrel and Mineral Resources Ministerial Regulation No. 30
by end of the year 2018. Year 2016.
Along with the fluctuation of world oil prices, Out of the 13 ex-terminated working areas of which
Indonesian Crude Price (ICP) has also fluctuated. In the operatorship rights have been acquired, 8
January, ICP price was at USD 65.6 per barrel, while working areas have come into effect in 2018, namely
ICP SLC was at USD 65.8 per barrel. ICP price was Ogan Komering, Tuban, Sanga-Sanga, South East
34
ANNUAL REPORT 2018
Sumatera, North Sumatera Offshore, Tengah (included Pertamina (Persero) on April 11, 2018. The merger of
in Mahakam Working Areas), Attaka and East PGN as a subsidiary of Pertamina will make Pertamina
Kalimantan. While Raja Working Areas and Jambi a gas company with the longest gas pipeline network in
Merang Working Area will only be effective in 2019 ASEAN, which is 9,600 km in length.
and Kepala Burung Working Areas and Salawati
Working Areas will be effective in 2020. Meanwhile for STRATEGIC INITIATIVES
Rokan Working Area, the largest national oil producer, Pertamina's main focus and strategy in 2018 is to
will only be effective in 2021. In addition, on January support the efforts to realize national energy security
1, 2018, Pertamina also commenced the operation of and independence. To answer the challenge, Pertamina
Mahakam Working Area which has been handed over invites all stakeholders to create synergies in order to
to Pertamina in 2015. provide solutions for national interests.
In 2018 Pertamina signed a Contract on Engineering, To reduce crude imports, in 2018, Pertamina is
Procurement, and Construction (EPC) of Refinery optimizing domestic crude processing in refineries. It
Development Master Plan (RDMP) for Balikpapan is intended to reduce the processing of crude imports
RU V Refinery. The winner of the EPC auction was a in the refineries, in accordance with the government’s
consortium of SK Engineering & Construction Co. Ltd., directive through the Energy and Mineral Resources
Hyundai Engineering Co. Ltd., PT Rekayasa Industri, Ministerial Regulation No. 42 Year 2018 on Priority
and PT PP (Persero) Tbk. With the appointment of to Utilization of Crude Oil for Fulfillment of Domestic
Balikpapan RU V Refinery EPC RDMP winner, Pertamina Demand. The effort was fruitful, where domestic crude
has shown strong commitment to realizing the refinery refinery output increased to 62% from 58% in 2017.
development mega projects that aims to support the
realization of national energy independence. The integrated oil and gas business operated by
Pertamina makes it possible to build synergies between
With the operatorship rights, Pertamina's oil production Pertamina Group, which consists of PT Pertamina
will increase, so that Pertamina is closer to realizing (Persero) and its subsidiaries engaging in the businesses
the aspiration of national energy security and of upstream oil and gas, downstream oil and gas, and
independence. non-oil and gas. Value Creation from the synergies of
Pertamina Group in 2018 managed to achieve USD
ESTABLISHMENT OF STATE-OWNED OIL AND 1.9 billion.
GAS HOLDING
After going through 2-year preparation process, in Since 2018 we have executed “Berkah Energi
2018 the Government appointed PT Pertamina (Persero) Pertamina” Program, a reward program from Pertamina
as Holding Company of State-Owned Enterprises in for loyal consumers of Pertamina products. The Program
Oil and Gas sector involving PT Pertamina (Persero), combined with MyPertamina application is part of
PT Pertamina Gas (Pertagas) and PT Perusahaan Gas our strategy to get closer to the consumers. “Berkah
Negara (Persero) Tbk (PGN). Energi Pertamina” Program is a form of appreciation to
consumers’ loyalty in this modern era along with rapid
Based on the Energy Sector SOE Roadmap, there is development of digital technology.
a need for a consolidation of SOE gas business in
order to increase the use of domestic natural gas . The “Berkah Energi Pertamina” Program will be executed
business merger of PGN and Pertamina is an initial simultaneously throughout Indonesia from August 9,
strategic step to increase effectiveness and strengthen 2018 to July 31, 2019. Drawing of the prizes in the
the gas industry value chain integration in Indonesia. total amount of billions rupiah will be done in 3 phases
of periods. The Phase 1 draw was in December 2018,
Formation of the Oil and Gas SOE Holding was Phase 2 in April 2019, and Phase 3 will be in August
marked with the signing of the Deed of Transfer of B 2019.
Series Shares amounting to 56.96% owned by the
Government of Republic of Indonesia in PGN to PT
35
SECURING ENERGY
OPERATIONAL PERFORMANCE improvement. The sales of Fuel products grew to 70

In the midst of various challenges in 2018, Pertamina million KL from 67 million KL in the previous year,
has demonstrated quite an encouraging operational while the sales of Non-Fuel products were relatively
performance improvement. From the Upstream Sector, stable with sales volume of 16 million KL. The gas
Pertamina was able to record oil and gas production sales increased significantly to 1,222,632 BBTU from
growth of 33% compared to the previous year with a 823,769 BBTU in the previous year, a significant
total production of 921 MBOEPD. addition due to the merger of PGN becoming
Pertamina's Subsidiary.
Crude oil production in 2018 was 393 MBOPD, a
15% increase compared to the previous year. While Pertamina has also been successful in executing the
gas production was 3,059 MMSCFD, a 50% increase Government’s assignment to realize One Price Fuel
compared to the previous year. In addition, the in Indonesia. Until the end of 2018, Pertamina has
production of geothermal from own operation area was realized the operation and trial operations on the One
4,182 GWh or 7% higher from the previous year. Price Fuel dealers at points 125 (55 points in 2017 and
70 points in 2018) point in the 3T (Frontier, Outermost,
In addition to successfully elevating production, and Disadvantaged) areas regions. With these gas
Pertamina has also successfully increased its proven stations, the general public now can buy Premium Fuel
oil and gas reserves (proven reserves, P1), which in and Diesel Fuel at the same prices as the people in
2018 was recorded at 426.25 MMBOE. This figure other regions who have enjoyed the prices according
was 36% higher than the P1 in 2017. The Reserve to Presidential Regulation No. 191 Year 2014, namely:
Replacement Ratio (RRR) of oil and gas was 137.81%. Premium Rp 6,450/Liter, and Solar products Rp 5,150/
This 2018 RRR figure was lower than that in 2017 of Liter.
143%. The additional oil and gas reserves in 2018
mostly came from inorganic activities through the FINANCIAL PERFORMANCE
operatorship of domestic oil and gas Working areas of Improved operational performance in 2018 has
which the operatorship contracts have expired, such as affected the Company's financial performance. In
Mahakam, Sanga-Sanga, Attaka, and East Kalimantan general, Pertamina’s financial performance in 2018
Working Areas. This is testament to PT Pertamina's increased compared to the previous year and was
commitment to maintain the sustainability of national oil above the RKAP target in 2018.
and gas production by continuing exploration activities.
Total sales and other operating revenues in 2018
The performance of refinery operations in 2018 was amounted to USD57,934 million, a 25.94% growth
also improved in general. The processing of crude oil, compared to the previous year’s sales and other
gas and intermediate products in 2018 was recorded operating revenues of USD 46,000 million and
at 336.54 MMbbl, a 4% increase compared to the 108.46% above the 2018 RKAP of USD 53,416
previous year. While the production volume of Fuel (10 million. The Company's operating revenue in 2018
main products) increased by 6% from 278.86 MMbbl was mainly contributed by domestic sales of crude
in 2017. oil, natural gas, geothermal energy and oil products
amounting to USD 44,743 million, a 12.45% increase
In the downstream sector, Pertamina's marketing compared to the previous year’s operating revenue of
performance in 2018 also shows a fairly good USD 39,789 million.
36
ANNUAL REPORT 2018
While the biggest growth of revenue in 2018 was In the oil and gas refinery aspect, the development
sourced from the operating revenue of other operating project of 4 refineries and the construction of 2 new
activities that in 2018 grew 427.87% to USD 3,906 refineries will not only improve the processing capacity
million from USD 740 million in 2017. of Pertamina refineries up to 2,000 MBSD, but will also
improve the quality of Fuel produced, from Euro 2 to
Nevertheless, the increase in production and sales Euro 5.
was also followed by the growth of cost of sales and
other direct costs that in 2018 increased by 29.47% Government policy provided in the Energy and Mineral
compared to 2017 to reach USD 48,714 million. The Resources Ministerial Regulation No. 42 Year 2018
increase in cost of sales and other direct costs was on Priority to Utilization of Crude Oil for Fulfillment of
mainly due to rising oil prices and the weakening of Domestic Demand also provides opportunities for cost
Rupiah exchange rate against US dollar throughout saving of imported crude oil transportation Pertamina
2018. As a result, operating profit recorded by has been carrying out so far.
Pertamina in 2018 was corrected to USD 6,246
million and profit for the year was also corrected to In 2014 through Government Regulation No. 79
USD 2,636 million. EBITDA in 2018 was USD 9,204 Year 2014 on National Energy Policy (KEN), the
million, up 26.86% compared to 2017 amounting to Government set the National Energy Mix target in order
USD 7,256 million. to realize national energy security, where the proportion
of New and Renewable Energy (NRE) increased in
PROSPECT AND FUTURE PLAN stages, that is 5% in 2015, 23% in 2025, and 31% in
In 2019, the global economic condition will still be 2050. Although the achievement of the national energy
shadowed by the impact of the US-China trade war. mix is still far from the target, Pertamina as a national
In addition, The Fed also has a plan to again raise the energy company is supportive and fully committed
benchmark interest rate as part of the efforts to stabilize to the development of NRE. The most significant
the U.S. currency and economy. development of Pertamina’s NRE Development is
the geothermal energy developed by PT Pertamina
In the midst of these conditions, the oil and gas industry Geothermal Energy (PGE).
is also marked with a concern about declining oil
production due to the crisis in Venezuela. There is a On the flip side, the Government has a biofuels
concern that this will again trigger a hike of crude oil supply roadmap, where in 2018 Pertamina as one of
prices in the world market. the Fuel General Commercial Enterprises (BU BBM)
has fulfilled the target of supply and distribution of
With the above background, Pertamina welcome the biodiesel (B20) of 20% biofuel type to the retail and
year 2019 with high optimism. The inclusion of 13 industrial market with a total volume of 16 million KL.
Ex-Terminated Working Areas, 8 of which have been With the implementation of B20, Pertamina managed
effective in 2018, has increased Pertamina's proven oil to significantly reduce Solar imports up to the end
and gas reserves (proven reserves, P1). Not only that, of 2018. In 2019, the Government has a target to
Pertamina's oil and gas production will also increase implement B30. This aggressive government roadmap
significantly, especially from Rokan Working Area, the has a potential to cut Pertamina's imports even more,
Working Area with largest oil production nationwide. while creating opportunities for Pertamina to develop
green refineries.
37
SECURING ENERGY
Another effort to develop eco friendly energy is by CORPORATE GOVERNANCE

optimizing gas fuel. Domestic demand for gas as In order to realize national energy security and
a more eco-friendly fossil energy is projected to independent, Pertamina also strengthen the aspects
continuously increase. The projection is considering of Good Corporate Governance/GCG. Pertamina
that the refinery development mega projects and new believes the implementation of GCG principles is a
refinery construction carried out by Pertamina until the crucial factor in achieving the aspiration. Therefore,
next 5 to 6 years will absorb gas in massive volume. Pertamina strives to improve the quality of its GCG
The introgation of PT. Perusahaan Gas Negara Tbk. implementation in terms of GCG organs and GCG
(PGN) with Pertamina through the SOE oil and gas mechanism.
holding will help speed up gas infrastructure integration
while at the same time saving capital and operating In 2018, as part of the principles of transparency and
costs. This will create opportunities for Pertamina to accountability, Pertamina is closely collaborating with
integrate upstream and downstream gas businesses. the Corruption Eradication Commission (KPK) to oversee
Pertamina’s operations. In addition, at the internal
In a liquefied natural gas (LNG) business, Pertamina's level, Pertamina also strengthens Audit Committee
competency and experience provide opportunities and Internal Audit functions in conducting internal
to expand business overseas. If so far the traditional supervision.
markets of Pertamina LNG are China, Japan, and
Taiwan, now Pertamina is seeking markets for its LNG Pertamina has also commenced the implementation
to South Asia and Africa. The signing of LNG supply of ISO 31000:2018 as the quality standard in risk
agreements with Petrobangla Bangladesh in 2018 management and the development of the previous ISO
initiated by the Government of both countries became 31000:2009 standard. The standard contains risk
the access door for Pertamina to expand the market in management principles, framework, and guidelines in
the region. accordance with the Company’s business character,
organization and corporate culture so as to support
HR QUALITY IMPROVEMENT the achievement of ERM objectives in Pertamina.
For Pertamina, Human Resources (SDM) is one of the There are three main foundations of ISO 31000:2018
most important links of integrated business chains. implemented in Pertamina’s risk management, namely:
Therefore, we continuously strive to improve the Risk Management Principles, Risk Management
capacity and quality of human resources by organizing Framework, and Risk Management Process.
education and training programs according to the
Company’s needs and plans. CHANGES IN BOARD OF DIRECTORS
COMPOSITION
In addition, Pertamina also builds high-performance In 2018, there was change in the composition of
corporate culture based on the effective working Pertamina Board of Directors pursuant to the State-
behavior according to the 6C Values (Clean, Owned Enterprises Ministerial Decree No. SK-97/
Competitive, Confident, Customer Focus, Commercial, MBU/04/2018 dated April 20, 2018, the State-
and Capable) and is supported by a conducive Owned Enterprises Ministerial Decree No. 242/
working climate based on employee engagament. The MBU/09/2018 dated September 13, 2018 as the
understanding and implementation of the 6C Values Company’s General Meeting of Shareholders and the
will form the cultural behavior as the characteristics State-Owned Enterprises Ministerial Decree No. SK-
distinguishing Pertamina from other companies. 232/MBU/08/2018 dated August 28, 2018.
38
ANNUAL REPORT 2018
Thus, Pertamina Board of Directors composition as of APPRECIATION
December 31, 2018 is as follows: Pertamina has managed to go through the year 2018
with an encouraging performance. The Board of
President Director & CEO : Nicke Widyawati Directors would like extend our highest appreciation
Director of Upstream : Dharmawan H. Samsu

for the trust, commitment and cooperation from all
stakeholders, especially the management and all
Director of Refinery : Budi Santoso Syarif
employees who have worked hard in the midst of ever-
Director of Corporate
: Basuki Trikora Putra increasing challenges in the industry.
Marketing
Director of Retail marketing : Mas’ud Khamid

The Board of Directors would also like to express
Director of Finance : Pahala N. Mansury our gratitude to the Board of Commissioners for the
Director of Logistics, Supply guidance provided to the Board of Directors, which
: Gandhi Sriwidodo
Chain and infrastructure
has been very helpful in achieving the encouraging
Director of Refinery and Pet- performance of the Company in 2018. Our heartfelt
: Ignatius Tallulembang
rochemicals Mega Projects
appreciation also goes to the shareholders, customers
Director of Investment Plan-
: Heru Setiawan and partners, for their well-established cooperation
ning and Risk Management
and trust. The Company will continuously uphold the
Director of Human Re-
: Koeshartanto commitment to provide the best to all stakeholders and
sources
shareholders.
Director of Asset Manage-
: M. Haryo Yunianto
ment
On behalf of the Board of Directors
Nicke Widyawati
Statement of the Board of Directors’ and
the Board of Commissioners’ Responsibility
on PT Pertamina (Persero)’s Annual Report 2018

To comply with the Good Corporate Governance principles and prevailing laws in Indonesia, PT Pertamina (Persero)
has published its Annual Report 2018. PT Pertamina (Persero)’s Annual Report 2018 provides concise information
about the Company’s performance, Good Corporate Governance, corporate social responsibility initiatives, PT
Pertamina (Persero)’s Consolidated Financial Statement for the period of 1 January to 31 December 2018, and other
relevant information to the stakeholders.
We, all the members of the Board of Directors and the Board of Commissioners of PT Pertamina (Persero) who have
signed below, have stated our responsibility for the validity of the contents of PT Pertamina (Persero)’s Annual Report
2018.
We certify that this Statement is true to the best of our knowledge.
Jakarta, 2019
Board of Commissioners PT Pertamina (Persero)
Tanri Abeng
President Commissioner/
Independent Commissioner
Arcandra Tahar Sahala Lumban Gaol Suahasil Nazara

Vice President Commissioner Commissioner Commissioner
Alexander Lay Ego Syahrial Ahmad Bambang

Independent Commissioner Commissioner Commissioner
Edwin Hidayat Abdullah

Commissioner
ANNUAL REPORT 2018

Board of Directors PT Pertamina (Persero)
Nicke Widyawati
Dharmawan H. Samsu Budi Santoso Syarif

Director of Upstream Director of Refinery
Basuki Trikora Putra Mas’ud Khamid Pahala N. Mansury

Director of Corporate Marketing Director of Retail marketing Director of Finance
Gandhi Sriwidodo Ignatius Tallulembang Heru Setiawan

Director of Logistics, Supply Chain Director of Refinery and Director of Investment Planning and
and infrastructure Petrochemicals Mega Projects Risk Management
Koeshartanto M. Haryo Yunianto

Director of Human Resources Director of Asset Management
SECURING ENERGY
COMPANY
PROFILE
Pertamina fully supports the efforts

to realize national energy security and
independence. The organizational
improvement and refinement carried out
is a real step to achieve this goal.
Two teams are playing sepak
takraw, a game sports using
a ball made of rattan. The
game is played using feet
and all body parts except the
hands. This is a traditional
game of Buginese people,
Makassar, South Sulawesi, who
have a philosophy of close
cooperation in community life.
CORPORATE IDENTITY
Paid-Up Capital
Name of Company USD 16,191,204 thousand
PT Pertamina (Persero)
Company Type
Limited Liability Company, State Owned Recent Changes of Notarial Deed
Enterprise Deed of State-Owned Enterprises
Minister as PT Pertamina (Persero)
General Meeting of Shareholders
Date of Establishment
No.27 dated December 19, 2016,
• December 10, 1957, named PT Permina
Notary Lenny Janis Ishak, SH. Based on
• July 01, 1961, PT Permina became PN
the Decree of SOEs Minister regarding
Permina
the Amendment to PT Pertamina
• August 20, 1968, PN Permina and PN
(Persero) Articles of Association dated
Pertamin amalgamated into PN Pertamina
November 24, 2016.
• December 15, 1971, PN Pertamina became
a State Owned Oil and Natural Gas Mining
Company Total Assets
• September 17, 2003, the State Owned Oil USD 64,718,452 thousand
and Natural Gas Mining Company became
PT Pertamina (Persero)
Line of Business
Energy
44
Laporan Tahunan 2018
IDENTITAS PERUSAHAAN
Authorized Capital Shareholders

Rp600,000,000,000,000,- (six hundred 100% by the Republic of
trillion Rupiah), consisting of 600,000,000 Indonesian Government
(six hundred million) shares with a nominal The Company’s shares are not to
value of Rp1,000,000,- (one million Rupiah) be traded
per share
Notarial Deed of Establishment

• Notarial Deed No.22 dated 10th December 1957, Meester Raden Pranowo Soewandy, Substitute
Notary Raden Meester Soewandy
• Government Regulation No.198 of 1961 regarding the Establishment of the State-owned National
Oil Mining Company (PN Pertamina)
• Government Regulation No.27 of 1968 regarding the Establishment of the State-owned Oil and
Natural Gas Mining Company
• Law No.8 of 1971 regarding the State-owned Oil and Natural Gas Mining Company
• Government Regulation No.31 of 2003 regarding the Change of Status of the State-owned Oil and
Natural Gas Mining Company to a Limited Liability Company (Persero)
• Law No. 19 of 2003 regarding State Owned Enterprises
• Notarial Deed No.20, dated 17th September 2003, Notary Lenny Janis Ishak, SH
• State Gazette of the Republic of Indonesian dated 21st November 2003 No. 93 Supplement No.
11620
Legal Basis of Establishment

Government Regulation No.31 of 2003 regarding the Change of Status of the State-owned Oil
and Natural Gas Mining Company (Pertamina) into a Limited Liability Company (Persero)
Address
Jl. Medan Merdeka Timur 1A
Jakarta 10110 Indonesian
(62-21) 3815111, 3816111

@Pertamina
1 500 000 (PSTN dan Telp seluler)
(62-21) 3633686, 3843882 @Pertamina
[email protected] @Pertamina
https://www.pertamina.com
45
SECURING ENERGY
COMPANY HISTORY
In supporting national energy security, Pertamina has

projected further business development that is able to
optimize natural wealth of Indonesia with the start of a
study on Green Refinery development in Indonesia.
46
SEJARAH PERUSAHAAN
Realizing national energy security is one of the ideals To answer this challenge, Pertamina invites all
promoted by PT Pertamina (Persero). As a state-owned stakeholders to create synergies in order to provide
enterprise, Pertamina is in the forefront of supporting solutions for the national interest. Pertamina believes the
efforts that have long been planned by the government. assets available in Indonesian’s natural resources can
Therefore, from time to time, Pertamina continues to be optimized as an energy source.
strengthen its commitment to develop business in the
field of new and renewable energy and business In 2018, Pertamina obtains the rights to manage
diversification. the Rokan Block from the Government of Indonesian
and will fully become the operator in 2021. With
Pertamina’s long standing experience and capacity the additional giant block and the Mahakam Block
become the main capital to realize these ideals. that has been handed over to Pertamina since 2017,
Pertamina has a long history in the national energy Pertamina's production is projected to increase. In
industry. Pertamina's milestones began around the 2018, it also marked the development of Pertamina's
1950s when the Government of the Republic of gas trading by joining PT Perusahaan Gas Negara Tbk.
Indonesian appointed the Army which later established Pertamina is the owner of the longest gas pipeline in
PT Eksploitasi Tambang Minyak Sumatera Utara Southeast Asia with a total of more than 9,600 km.
to manage oil fields in the Sumatra region. On
December 10, 1957, the company changed its name In supporting national resilience, Pertamina has
to PT Perusahaan Minyak Nasional, abbreviated as projected further business development that is able to
PERMINA. optimize Indonesian's natural resources starting with
the study of Green Refinery development in Indonesian.
In 2003, Pertamina's milestone entered a new phase. The Green Refinery will play a role in processing local
Based on Government Regulation No.31 of 2003 vegetation such as oil palm, sugar cane, and other
dated June 18, 2003, Perusahaan Pertambangan crops into biofuels. This will support the Government
Minyak dan Gas Bumi Negara changed its name to of Indonesian's program to reduce fuel imports by
PT Pertamina (Persero) which carried out oil and gas increasing B20 production.
business activities in the Upstream to Downstream
Sector.
Right at its 50th anniversary celebration, Pertamina's

corporate vision was "to become a world-class national
oil company" which was later refined "to become a
world-class national energy company" in 2011.
In 2018, Pertamina's main focus is to achieve the
ideals of national energy resilience and self reliance
amid energy needs that also continue to increase. The
massive infrastructure development carried out by the
government will ultimately encourage an increase in
energy needs. This is a special challenge for Pertamina,
namely how energy supplies must be secured to
be able to keep pace with population, economic,
infrastructure and energy demand growth.
47
SECURING ENERGY
VISION, MISSION AND CORPORATE VALUE
Pertamina has vision and mission which has been discussed and approved by Board of Commissioners, Board of
Directors, and Shareholders on 14th June 2011 in Extraordinary General Meeting of Shareholders (RUPSLB) to
stipulate Company’s Long-Term Plan (RJPP) in 2011-2015.
The Company's Vision, Mission and Goals are as follows:
VISION MISSION
TO BE WORLD To Carry Out
Integrated Core
CLASS NATIONAL Business In Oil, Gas,
ENERGY New And Renewable
COMPANY Energy Based On
Strong Commercial
Principles
COMPANY’S GOALS
»» Implementing and supporting Government’s

policies and programs in Economic and National
Development in general particularly in the
Organization of Oil and Gas Business both
domestic and overseas as well as other activities
which are related to or support business activities in
the oil and gas sectors, and;
»» Development on the resource optimization owned

by the Company to produce high-quality goods
and/or services and strong competitive as well
as to pursue profit in order to improve Company’s
value by applying the Limited Liability Company
principles.
48
PERTAMINA CULTURE
Pertamina holds certain values as a foundation to guide the Company towards realizing the vision and mission
based on global standards and the implementation of Good Corporate Governance. The values are represented
by the 6C’s, consisting of Clean, Competitive, Confident, Customer-focused, Commercial and Capable, which
must be acknowledged and perceived as behavioural guidelines for all employees in their daily activities.
The understanding and implementation of the 6C Values will shape the behaviors, which then develop as a
culture, creating a distinctive feature of Pertamina from among other companies. Each individual worker in
Pertamina must ensure that he or she behaves in accordance with the 6C Values.
CAPABLE CLEAN
COMMERCIAL COMPETITIVE
CUSTOMER CONFIDENT
FOCUS
CLEAN COMPETITIVE CONFIDENT
Professionally managed, avoid Able to compete both regionally Involvement in national economic
conflict of interests, never tolerate and internationally, support development, as a pioneer in State-
bribery, respect trust and integrity growth through investment, build Owned Enterprise reform, and to
based on good corporate a cost effective and performance build national pride.
governance principles. oriented culture.
CUSTOMER FOCUS COMMERCIAL CAPABLE
Focus on customers and commit Create added value based on Managed by professional,
to give the best services to commercial orientation and skilled, and highly qualified
customers. make decisions based on fair leaders and workers, committed
business principles. to building research and
development capabilities.
49
SECURING ENERGY
ORGANIZATION STRUCTURE
Basis:
Board of Directors Decree No. Kpts-20 / C00000 / 2018-S0
dated July 4, 2018
Name of Executive Officers as of December 31, 2018

President Director
& CEO
Nicke Widyawati
Corporate Secretary
Syahrial Mukhtar
Chief Legal Counsel &

Complliance
Aji Prayudi
Chief Audit Excecutive
Faisal Yusra
Retail Marketing Logistics, Supply Chain

Upstream Director Refinery Director Corporate Marketing
Director and Infrastructure
Director
Director
Dharmawan H Samsu Budi Santoso Syarif Basuki Trikora Putra Mas’ud Khamid Gandhi Sriwidodo
SVP Upstream SVP Busniess Dev. SVP Supply,

Strategic Planning SVP Corporate SVP Retail Marketing
& Performance & Performance Distribution &
Marketing Business Business
Evaluation Excellence Infrastructure
Meidawati Ivan Airlangga Ep Kusnendar Jumali Alfian Nasution
SVP Upstream Business SVP Refining SVP Gas & LNG

SVP Shipping
Development Operation Management
Ida Yusmiati Achmad Fathoni Tanudji D. Erry Widiastono

Mahmud
SVP Exploration
Ricardo Perdana
Yudantoro
SVP Development &

Production
R.Panji Sumirat
50
SVP Corporate Health,
Safety, Security &
Environment
Lelin Eprianto
SVP Integrated Supply

Chain
Hasto Wibowo
Mega Project Refinery Planning, Investment Human Capital

Finance Director Asset Management
& Petrochemical and Risk Management Director Director
Director Director
Ignatius Tallulembang Heru Setiawan Pahala Nugraha Koeshartanto Muhamad Haryo Yunianto
SVP Corporate SVP Asset Strategic

SVP Project SVP Corporate SVP Human Cpital
Strategic Planning & Planning &
Development Finance Development Optimization
Development
Amir H Siagian Daniel Syahputra Purba Narendra Widjajanto Vacant Mulyono
SVP Research & SVP Controller SVP Human Cpital SVP Asset Operation
SVP Projext Execution Technical Center Management Management
Suwahyanto Herutama Trikoranto Vacant Beni Syarif Hidayat Alam Yusuf
SVP Corporate
Business Optimization
Vacant
SVP Corporate ICT
Jeffrey Tjahja Indra
51
SECURING ENERGY
MILESTONES OF PERTAMINA
The Government of Republic of

Indonesian on December 10, 1957
established an oil and gas company
1957 under the name of PT Permina
PT Permina changed its name to

1961
PN Permina.
PN Permina merged Based on Law No. 8 of 1971

with PN Pertamin PN Pertamina changed to
to become PN Pertamina which was directly
Pertamina controlled by the state
2001
1968 1971
The enforcement of the Oil and

Gas Law No.22 of 2001 changed
the governance of the oil and
Pertamina was officially became PT Pertamina gas industry in Indonesian so that
(Persero) based on PP No.31 Year 2003 Pertamina was no longer a regulator.
dated June 18, 2003 regarding Alienation of
the State-owned Oil and Natural Gas Mining
Company (Pertamina) to the Limited Liability
2003
Company (Persero). Based on Notary Deed
No. 20 of 2003 PT Pertamina (Persero) was
established on September 17, 2003.
On December 10, 2005, PT Pertamina (Persero)

2005
changed its logo as part of an effort to prepare
for a more competitive business era with a more
dynamic, reliable and eco-friendly spirit.
PT Pertamina (Persero) changed

its vision to, “To Be a World
2007 Class National Oil Company”
on December 10, 2007.
PT Pertamina (Persero) set a new

vision, “To Be a World Class National 2011
Energy Company” on June 14, 2011
52
MILESTONES OF PERTAMINA
The Extraordinary General Meeting of Shareholder (EGMS) dated July 19, 2012, approved
2012 Amendment to Pertamina’s Articles of Association with regards to the Company’s business areas
in energy as well as new and renewable energy operations.
PT Pertamina (Persero) implemented the 5 (five) priorities of business strategy towards

a better Pertamina, namely “Expansion in Upstream”, “Enterprise-Wide Efficiency”,
2014 “Increased Refinery and Petrochemical Capacity”, “Development of Infrastructure &
Marketing”, and “Prudent Financial”.
On December 14, 2015, Minister of SOE as GMS approved the Amendment of the
Pertamina’s Articles of Association included:
• Addition to the paid up capital from the capitalization of retained earning of
2015 amounting to Rp50 trillion;
• Addition to new business activities related to the industry area, asset optimization and
new activities for the Company as detailed in Article 3 of Articles Association;
• Organization approval authority which requires Board of Commissioners approval,
initially was 2 (two) levels below Board of Directors become 1 (one) level below Board
of Directors;
• Loan to Subsidiaries, which initially must obtain Board of Commissioners approval
become only to be reported to Board of Commissioners.
• In August 2016, for the first time Pertamina has successfully completed the acquisition
process for 24.53% of shares in Establishment Maurel & Prom SA (M&P), a
2016 Frenchbased multinational oil and gas company listed on the Paris Stock Exchange
(Euronext Paris). M&P has exploration and production assets in Africa, Europe and
• America. The acquisition of M&P’s shares has added to Pertamina’s investment
portfolio of overseas assets, enlarging reserves for national energy security, and drives
Pertamina’s upstream business development in the global arena.
• In February 2017, Pertamina through its subsidiary, PT Pertamina International

Exploration and Production (PIEP), completed the acquisition of Maurel et Prom (M&P),
a French oil and gas company with share ownership of 72.65%.
2017 • The subsidiary of PT Pertamina (Persero), PT Pertamina Hulu Indonesian (PHI) officially
replaced Total E&P Indonesie (TEPI) as the operator of the Mahakam Block after the
TEPI contract expired on December 31, 2017.
• January 1, 2018, Pertamina starts operating the Mahakam Block, the largest
2018 gas block in Indonesian
• April 11, 2018, Pertamina officially became the holding company of SOE Oil
& Gas (MIGAS) with the signing of the State Owned Series B Shares Transfer
Deed of 59.96% in PGN to PT Pertamina (Persero).
• In August 2018, Pertamina obtained operatorship rights over the Rokan Block
from the Government of Indonesian. The Rokan Block is the largest oil block in
Indonesian. Full operatorship will begin in 2021.
• In 2018 Pertamina began operating the full 8 former termination WKs
entrusted by the Government of Indonesian.
• December 2018, the integration of PGN's gas trading with Pertamina
with the signing of the Pertagas Sales Purchase Agreement (SPA). After the
integration process is complete, Pertamina as the SOE Oil and Gas Holding
directs PGN as the Subholding GAs to manage the gas trading in an
integrated manner in Indonesian.
53
SECURING ENERGY
LINE OF BUSINESS
In accordance with Decree of Minister of SOE as GMS

dated November 24, 2016 on Changes to the Articles of
Association of PT Pertamina (Persero) as stated in Notary
Deed No. 27 dated December 19, 2016, the Company’s
business activities are business activities in the field of
energy operation organization, such as oil and gas, new
and renewable energy, as well as other activities relevant to
or supports business activities in energy sector, such as oil
and gas, new and renewable energy optimization on the
resources owned by the Company.
54
LINE OF BUSINESS
Based on the Articles of Association, the Company may 3. Operation of Industrial area;
carry out main business, among others to carry out: 4. Business activities in order to carry out other
1. Oil and gas exploration; business activities which support and related to the
2. Oil and gas exploitation; main business activities.
3. Activities in electric energy sector including but a. Upstream Sector
not limited to exploration and exploitation of Pertamina’s upstream sector’s activities
geothermal, geothermal power plan, gas fired include exploration, development and
power plant and electric energy generated by production of oil and natural gas. Other
Company; business activities in this sector are upstream
4. Refinery activities producing fuel, special fuels, technology services, drilling services, well
non-fuel, petrochemicals, diesel fuel, liquefied maintenance services, development of
natural gas (LNG), liquefied gas (GTL) and geothermal energy and coal bed methane
intermediate products; (CBM) and shale gas.
5. Biofuel material supply, processing, transportation, b. Refinery Sector
storage and commercial activities; In this sector, Pertamina carries out business
6. Transportation activities covering the activities of activities in the country which include refinery
transporting crude oil, natural gas, fuel, fuel gas, and petrochemical refinery management.
and/or other products for commercial purposes; c. Gas and New Renewable Energy Sector
7. Storage activities covering the activities of In Gas and New Renewable Energy Sector
receiving, collecting, and stroring, and releasing (GEBT), Pertamina has conducted a variety
of crude oil, fuel, fuel gas, and / or other products of research and approaches related to the
for commercial purposes; renewable energy development for power
8. Commercial activities covering the activities of generation and unconventional bio-fuels,
purchasing, selling, exporting, importing of crude including to conduct feasibility studies for
oil, fuel, fuel gas, and / or other products, and biogas power plants and solar power plants,
distributing natural gas through pipelines including and the development of bio-fuels in the form
commercial electricity generated by the Company; of green diesel and bio LNG. The sector is
9. Activities for developing, exploring, producing also in charge of gas infrastructure projects
and trading new and renewable energy, Coal such as construction of LNG regasification
Bed Methane (CBM), Liquid Coal, Gassified coal, facilities, gas pipelines, and gas refueling
shale gas, shale oil, Vegetable Fuels, solar energy, stations.
wind energy, and biomass. d. Marketing Sector
In marketing sector, Pertamina carries out
In addition to the main business activities as mentioned marketing, trading and distribution of a
here in above, Company can carry out business number of products such as fuel, lubricants,
activities for optimization of the resource utilization LPG, petrochemical products and other
owned for: non-fuel products to domestic and overseas
1. Trading house, real estate, warehousing, markets.
tourism, sport and recreation, rest area, e. Refinery and Petrochemical Mega Project
hospital, education, research, telecommunication Sector
infrastructure, rental service and operation of The refinery and petrochemical mega project
facilities and infrastructures owned by copany, toll sector provides support to the refinery
road and mall; business sector through the increase in
2. Operation of special economic area; refinery capabilities and competitiveness.
55
SECURING ENERGY
56
57
SECURING ENERGY
PRODUCTS AND SERVICES
Product
Subsidized Fuel Products for Households • Kerosene
• Solar/Biosolar
Subsidized/Assignment Automotive Fuel Products
• Premium
• Pertalite
• Pertamax
• Pertamax Turbo
Non-Subsidized Automotive Fuel Products • Pertamax Racing
• Dexlite
• Pertamina Dex
Fuel for Industry
Fuel for Marine / Ship
Fuel for Aviation • Avtur
• Domestic Gas:
»» LPG 3 Kg (subsidized)
»» LPG 12 Kg
»» Bright Gas
»» Musicool (refrigerant)
Non Fuel Products »» Vigas (for motor vehicles)
• Petrochemicals
• Bitumen
• Envogas (for motor vehicles)
• Lubricants for motor vehicles
• Industrial lubricants
Services
1. Internal Customer Crude, Intermedia, Fuel & Non Fuel Product Sea Transportation Service
2. External Customer Sea Transportation Service (Charter Out)
3. Floating Storage & Offloading Service
4. Vetting Service
5. Marine Services: Underwater Engineering, Docking, Agency and Mooring Master.
6. Offshore Support Vessel, Port and Jetty Services
7. Commerce services, transportation, distribution, processing and other businesses related to natural gas and
derivative products,
8. Human capital development services, assessment and management system consultation
9. Hotel / motel services, office and property /hotel rentals
10. Loss insurance services related to oil and gas and marine hull industry operations,
11. Health services and hospitals in Jakarta and surrounding areas, Cirebon, Balikpapan, Tanjung, and
Prabumulih
12. Air transportation services, airplane rentals and scheduled flights (regular), organize other businesses related
to or supporting the business activities.
58
Board of Commissioners PROFILE
Tanri Abeng Arcandra Tahar

President Commissioner Vice President Commissioner
Nationality : Indonesian Nationality : Indonesian

Age : 76 years old Age : 48 years old
Domicile : Jakarta Domicile : Jakarta
Education Education
• Doctor of Interdisciplinary Sciences from Gadjah Mada • PhD in Ocean Engineering from Texas A & M University
University (2010) Ocean Engineering (2001)
• Advanced Management Program, Claremont Graduate • Master Ocean Engineering from Texas A & M University
School, Los Angeles, USA (1984) (1998)
• Master of Business Administration, State University of • Bachelor of Mechanical Engineering from Bandung
New York at Buffalo, New York, USA (1968) Institute of Technology (1994)
Working Experience Working Experience

• Chairman PT Telkom Indonesian (2004 – 2010) • Deputy Minister of ESDM (2016 - present)
• Menteri Negara Pendayagunaan BUMN (1998 – 1999) • ESDM Minister of Indonesian (July 2016 - August 2016)
• CEO di beberapa perusahaan swasta di antaranya • President of Petroneering, LLC, Houston, Texas (2013-
Union Carbide Indonesian dan Singapura, PT Multi 2016))
Bintang Indonesian, dan terakhir PT Bakrie & Brothers
(1992 – 1998) Appointment
Decree of the SOE Minister as PT Pertamina (Persero) General
Appointment Meeting of Shareholders No.SK-254 / MBU / 11/2016
President Commissioner of PT Pertamina (Persero) since May dated November 14, 2016 as Vice President Commissioner of
6, 2015 based on PT Pertamina (Persero).
• Decree of the SOE Minister as PT Pertamina (Persero)
General Meeting of Shareholders (RUPS) No.SK-60
/ MBU / 05/2015 dated May 6, 2015 as President
Commissioner of PT Pertamina (Persero)
• Decree of the SOE Minister as PT Pertamina (Persero)
General Meeting of Shareholders No.SK-254 / MBU /
11/2016 dated November 14, 2016 as Independent
Commissioner and concurrently President Commissioner.
59
SECURING ENERGY
Sahala Lumban Gaol Suahasil Nazara

Commissioner Commissioner

Education Education
• Doctor of Philosophy in Economy from IOWA State • Ph.D from University of Illinois, Urbana Champaign USA
University (1994) (2003).
• Master of Economy from University of Illinois, USA • Master of Science from Cornell University USA (1997)
(1988) • Bachelor of Economics from University of Indonesian
• Bachelor of Animal Husbandry from Bogor Agricultural (1994)
Institute (1977)
Working Experience
Working Experience • Head of Fiscal Policy Agency in Finance Ministry of the
• Independent Commissioner of PT BTN Tbk. (2012-2015) Republic of Indonesia on October 31, 2016
• Special Staff of the SOE Minister (2014 - present) • Member of National Economic Committee (KEN) (2013-
• Commissioner of PT Tugu Insurance (2009-2012) 2014)
• Policy Working Group Coordinator of the National
Appointment Team Secretariat for the Poverty Alleviation Acceleration,
Decree of the SOE Minister as PT Pertamina (Persero) Secretariat of the Vice President of the Republic of
General Meeting of Shareholders (GMS) No.KEP-58 / MBU Indonesia (2010 - 2015)
/ 05/2015 dated May 6, 2015 as Commissioner of PT
Pertamina (Persero) Appointment
Meeting of Shareholders (GMS) No.SK-58 / MBU / 05/2015
dated May 6, 2015 as Commissioner of PT Pertamina
(Persero)
60
Alexander Lay Ego Syahrial

Independent Commissioner Commissioner

Education Education
• Master of Laws from University of Sydney, Australia • Post Doctoral (Research Associate) in Fuel Engineering
(2006) from Imperial College of Science, Technology, and
• Bachelor of Law from Atmajaya University, Jakarta Medicine, University of London, UK (2004)
(2003) • PhD in Fuel Engineering from the Imperial College of
• Bachelor of Fuel Engineering from Bandung Institute of Science, Technology, and Medicine, University of London,
Technology (ITB), Bandung (1997) Royal School of Mines, Department of Earth Resources
Engineering, London, UK (1997)
Working Experience • Master of Fuel Engineering from the Imperial College of
• Commissioner of PT Asuransi Jasa Indonesian (Persero) Science, Technology, and Medicine, University of London,
(September 2016-September 2017) Royal School of Mines, Department of Earth Resources
• Special Staff of RI Cabinet Secretary (January - August Engineering, London, UK (1993)
2015) • Bachelor of Fuel Engineering from Trisakti University
• Partner of Law Firm Lasut, Lay & Pane (2009-2014 (1988)
Appointment Working Experience

Decree of the SOE Minister as PT Pertamina (Persero) General • Secretary General of the Ministry of Energy and Mineral
Meeting of Shareholders No.SK-194 / MBU / 09/2017 Resources (2017 - present)
dated September 12, 2017 as Commissioner of PT Pertamina • Head of Geology, Ministry of Energy and Mineral
(Persero) Resources (2016-2017)
• Head of Planning Bureau, Ministry of Energy and Mineral
Resources (2016)
Appointment
Meeting of Shareholders No.SK-142 / MBU / 05/2018
(Persero)
61
SECURING ENERGY
Ahmad Bambang Edwin Hidayat Abdullah*

Commissioner Commissioner

Age : 56 tahun Age : 47 years old
Education
Education
• Masters in Industrial Management from Queensland
• Bachelor of Economics from Gadjah Mada University
University of Technology, Australia (Joint Program) (1999)
(1995)
• Master of Engineering from University of Indonesian,
• Master of Public Management from Lee Kuan Yew School
Jakarta (1999)
of Public Policy, NUS (in Cooperation with the Kennedy
• Bachelor of Informatics Engineering from Bandung
School of Government, Harvard University in Singapore
Institute of Technology (ITB), Bandung (1986)
and the United States) (2005),
• IDEAS Fellow, MIT Sloan School of Management (2009).
Working Experience
• Deputy of Construction and Transportation Facilities and
Working Experience
Infrastructure of the Ministry of SOEs (2017 - present)
• Deputy of Energy, Logistics, Regions and Tourism of the
• Commissioner of PT Pertamina (Persero) (2016 - 2017)
Ministry of SOEs (2015 - present)
• Vice President Director of PT Pertamina (Persero) (2016-
• Vice President Commissioner of PT Pertamina (Persero)
2017)
(March - November 2016)
• Independent Commissioner of PT Bumi Serpong Damai
Appointment
Tbk (2004-2015)
Appointment
(Persero)
dated March 29, 2016 as Vice President Commissioner of PT
Pertamina (Persero)
* Resigned on May 30, 2018 in accordance with Decree of

the SOE Minister as PT Pertamina (Persero) GMS No.SK-142 /
MBU / 05/2018
62
BOARD OF DIRECTORS PROFILE
Nicke Widyawati
Nationality : Indonesian
Age : 51 years old
Domicile : Jakarta
Education
• Master of Business Law from Padjadjaran University (2009)
• Bachelor of Industrial Engineering from Bandung Institute of
Technology (1991)
Working Experience
• PT Pertamina (Persero) - Director of Human Capital/Acting
President Director & CEO (2017-2018)
• PT PLN (Persero) – Director of Strategic Sourcing and Renewable
Energy (2017)
• PT PLN (Persero) – Director of Corporate Planning and
Renewable Energy (2016 - 2017)
Appointment
SOE Ministerial Decree No. SK - 97 / MBU / 04/2018, April 20,
2018 on Dismissal and Appointment of Members of PT Pertamina
(Persero) Board of Directors
63
SECURING ENERGY
Dharmawan H. Samsu Budi Santoso Syarif

Upstream Director Refinery Director

Domicile : Jakarta Domicile : Jakarta, Indonesian
Education Education
• Geophysical Engineering - University of Indonesia • Master of Industrial Engineering from University of
(1989) Indonesia, (1999)
• Graduate Certificate in Industrial Engineering
Working Experience Management from Queensland University of Technology,
• Director of Upstream, PT Pertamina (Persero), August Australia (1999)
2018 - present, • Chemical Engineering from Gajah Mada University,
• Head of Country, BP Indonesia, 2011 - August 2018, Yogyakarta (1989
• Exploration & Renewal Manager, BP Indonesia, 2009 -
2011, Working Experience
• Reservoir & Wells Manager of BP Offshore Northwest • VP Refining Technology (2014 -2017)
Java (ONWJ) and Subsurface & Wells Functional • SVP Business Development & Performance Excellence
Manager, BP Berau Ltd., 2006 - 2008, (May - August 2017)
• Subsurface, Wells and PE Manager, BP Kangean Inc., • PT Pertamina (Persero) SVP Refining Operation (2017 -
2003 - 2005, 2018)
• Exploration Team Leader, BP North America, 2000 -
2003, Appointment
• Assignments in ARCO Indonesia Inc., ARCO Bali North SOE Ministerial Decree No. SK-97 / MBU / 04/2018, April
Inc., ARCO Exploration and Production Technology, 20, 2018 on Dismissal and Appointment of Members of PT
ARCO Africa and Middle East Exploration, 1990 - 2000. Pertamina (Persero) Board of Directors
Appointment
• SOE Ministerial Decree No. SK - 97 / MBU / 04/2018,
April 20, 2018 on Dismissal and Appointment of
Members of PT Pertamina (Persero) Board of Directors
64
Basuki Trikora Putra Mas’ud Khamid

Corporate Marketing Director Retail Marketing Director

Education Education
• Bachelor of Mechanical Engineering, Trisakti University • Executive Education in Harvard Business School (2015)
(1988) • Global Leadership Program from Kellogg School
Management, Northwester University of Chicago (2009)
Working Experience • Bachelor of Engineering in Physics from Sepuluh
• SVP Non Fuel Marketing of PT Pertamina (Persero) (2017 November Institute of Technology (1989)
- 2018)
• President Commissioner of PT Pertamina EP (2018 – Working Experience
present) • Consumer Service Director of PT Telkom (2017 –2018)
• Chairman of Pertamina Pension Fund Supervisory Board • Chief of Commissioner, PT. Telkom Akses (2017 –2018)
(2018 - present) • Chief of Commissioner PT. Sigma Citra Caraka (2015 -
2017)
Appointment
• SOE Ministerial Decree No. SK - 97 / MBU / 04/2018, Appointment
April 20, 2018 on Dismissal and Appointment of SOE Ministerial Decree No. SK - 97 / MBU / 04/2018, April
Members of PT Pertamina (Persero) Board of Directors 20, 2018 on Dismissal and Appointment of Members of PT
Pertamina (Persero) Board of Directors
65
SECURING ENERGY
Pahala N. Mansury Gandhi Sriwidodo

Finance Director Director of Logistics, Supply Chain and Infrastructure

Education Education
• MBA of Finance from New York University Stern School • Master of Management from University of Hasanudin
of Business, USA (1999) (2003))
• Bachelor of Economics, University of Indonesia (1994) • Bachelor of Chemical Engineering from Diponegoro
University (1989)
Working Experience
• President Director of PT Garuda Indonesia (Persero) Tbk Working Experience
(2017 - 2018). • President Director of PT Pertamina Patra Niaga (2015 -
• Managing Director - Treasury & Markets, Chief Financial 2018)
Officer, Bank Mandiri (2003 - 2017) • VP Industrial Fuel Marketing, PT Pertamina (Persero)
• Project Leader at The Boston Consulting Group (2000 - (2013 - 2015)
2003) • General Manager Fuel Retail Marketing Region 1 –
Medan, PT Pertamina (Persero) (2011 - 2013)
Appointment
Decree No. 242 / MBU / 09/2018, September 13, 2018 Appointment
on Dismissal, Transfer of Assignment and Appointment of SOE Ministerial Decree No. SK - 97 / MBU / 04/2018, April
Members of PT Pertamina (Persero) Board of Directors 20, 2018 on Dismissal and Appointment of Members of PT
Pertamina (Persero) Board of Directors
66
Ignatius Tallulembang Heru Setiawan

Mega Project Refinery and Director of Investment Planning
Petrochemical Director and Risk Management

Education Education
Bachelor of Chemical Engineering from Gajah Mada • MBA, Energy Management - Universite de Montreal
University, Yogyakarta (1988) Canada (2001)
• Mechanical Engineering - Bandung Institute of Technology
Working Experience (1989)
• Commissioner of PT Pertamina Power Indonesia (2018 -
present) Working Experience
• Commissioner of PT Pertamina Lubricant (2017 - 2018) • Mega Project Refinery and Petrochemical Director of PT
• Senior Vice President of Project Execution, Directorate Pertamina (Persero) (Apr - Sept 2018)
of Mega Project Refinery and Petrochemical 1 (2017 - • SVP Corporate Business Optimization (Jan - Apr 2018)
2018)
Appointment
Appointment SOE Ministerial Decree No. 242 / MBU / 09/2018,
SOE Ministerial Decree No. 242 / MBU / 09/2018, September 13, 2018 on Dismissal, Transfer of Assignment
September 13, 2018 on Dismissal, Transfer of Assignment and and Appointment of PT Pertamina (Persero) Board of Directors
Appointment of PT Pertamina Board of Directors Members. Members.
67
SECURING ENERGY
Koeshartanto M. Haryo Yunianto

Human Capital Director Asset Management Director

Education Education
• MBA from IPMI Business School, (2000) • Master of Management from Universitas
• Bachelor of Economics, Undip (1985) • Pembangunan Nasional (UPN) Veteran, Jakarta
(2001)
Working Experience • Bachelor of Law from Universitas Islam Indonesia
• Human Capital & General Affairs Director of PT (UII), Yogyakarta (1994)
Jasa Marga (Persero) Tbk (2017 –2018)
• President Director of KTalents Asia (2016 -2017) Working Experience
• Group Human Resources Director, Agung • President Commissioner of PT Patra Niaga (2018
Podomoro Group (2010-2015) - present)
• President Director of PT Patra Jasa (2016-2018)
Appointment • Director of PT Jaya Ancol (2014-2015)
SOE Ministerial Decree No. SK-97/MBU/ 04/2018,
April 20, 2018 on Dismissal and Appointment of Appointment
Members of PT Pertamina (Persero) Board of Directors SOE Ministerial Decree No. SK - 97 / MBU /
04/2018, April 20, 2018 on Dismissal and
Appointment of Members of PT Pertamina (Persero)
Board of Directors
68
69
SECURING ENERGY
LIST OF SUBSIDIARIES AND ASSOCIATES
Name of Date of Operation

No. Shares in Percentage Line of Business
Subsidiaries Establishment Status
• PT Pertamina (Persero) Management of upstream oil and gas business

(99,99%) September 13, which includes exploration, exploitation, and sales
1 PT Pertamina EP Active
• PT Pertamina Pedeve 2005 of oil and gas produced from the exploitation
Indonesia (0,01%) activities.
Management and development of geothermal

• PT Pertamina (Persero) resources which includes exploration and
PT Pertamina
(90,06%) December 12, exploitation activities, the production of steam
2 Geothermal Active
• PT Pertamina Pedeve 2006 and electricity generation and consulting services,
Energy
Indonesia (9,94%) construction, operation and maintenance as well
as technology development.
• PT Pertamina (Persero) Upstream oil & gas and energy business manage-
PT Pertamina (98,72%) ment both inside and outside the country as well
3 June 29, 2007 Active
Hulu Energi • PT Pertamina Pedeve as related and/or supporting business activities in
Indonesia (1,28%) the field of oil and natural gas.
• PT Pertamina (Persero)
PT Pertamina EP (99%) September 14, Exploration, exploitation and
4 Active
Cepu • PT Pertamina Pedeve 2005 production in Cepu.
Indonesia (1%)
PT Pertamina • PT Pertamina (Persero) Management and development of drilling services
Drilling (99,89%) including exploration and exploitation of oil and
5 June 13, 2008 Active
Services • PT Pertamina Pedeve gas or geothermal
Indonesia Indonesia (0,11%)
PT Pertamina EP • PT Pertamina (Persero)

Cepu Alas (99%) Exploration Exploration, exploitation and production in Block
6 August 15, 2013
Dara & • PT Pertamina Pedeve phase Cepu Alas Dara & Kemuning
Kemuning Indonesia (1%)
PT Pertamina • PT Pertamina (Persero)
Management of upstream operations in the
Internasional (99,999998%) November 18,
7 Active field of oil, gas and energy
Eksplorasi Dan • PT Pertamina Pedeve 2013
Produksi Indonesia (0,000002%)
• Oil, natural gas and energy businesses
• Oil and natural gas business including explora-
tion and exploitation
• PT Pertamina (Persero) • Energy-related business, direct and indirect
PT Pertamina 99,93%) December 28, • Equity participation and participating interest in
8 Active
Hulu Indonesia • PT PT Pertamina Pedeve 2015 domestic operations
Indonesia (0,07%) • Services related to oil, natural gas and energy
businesses
• Other business directly or indirectly related to
the businesses described above.
• PT Pertamina (Persero) Production, repair and trade of equipment for elec-

PT Pertamina Established on
(99,999031%) tricity generated from other energy sources such as
9 Power October 26, Active
• PT Pertamina Pedeve natural gas, hydro, geothermal, solar, and others.
Indonesia 2016
Indonesia (0,000969%)
(48,99%) Business management in the fields of commerce,
PT Pertamina • PT Perusahaan Gas December 23, transportation, distribution, processing and other
10 Active
Gas Negara (51,00% 2007 business related to natural gas and its derivatives.
• Pertamina Pedeve
Indonesia (0,01%)
PT Perusahaan
(56,96%)
11 Gas Negara May 13, 1965 Active Transportation and trading of natural gas
• Public (43,04%)
Tbk
• PT Pertamina (Persero) Management of refinery in oil, natural gas

PT Kilang
(99,90%) November 13, and new and renewable energy in domestic
12 Pertamina Active
• PT Pertamina Pedeve 2017 and overseas
Internasional
Indonesia (0,10%)
70
LIST OF SUBSIDIARIES AND ASSOCIATES
Name of Date of Operation

No. Shares in Percentage Line of Business
Subsidiaries Establishment Status
On January 31,
2012, became
PT Pertamina
• PT Pertamina (Persero) Patra Niaga,
PT Pertamina (99,912%) previously estab- Technology services, trade services for non-fuel
13 Active
Patra Niaga • PT Pertamina Trans lished on Febru- and oil and gas mining industry
Kontinental (0,088%) ary 27, 1997,
under the name
of PT Elnusa
Harapan.
• PT Pertamina (Persero) Shipping operation services including supply

PT Pertamina
(99,999%) September 09, vessels, tug boats, cargo vessels, agency and
14 Trans Active
• PT Pertamina Pedeve 1969 management of Kabil jetty in Batam Island
Kontinental
Indonesia (0,001%)
• PT Pertamina Gas
Retail gas station business management as well as
PT Pertamina (99,9995%)
15 June 17, 1997 Active trade and transportation services for fuel
Retail • PT Pertamina Pedeve
Indonesia (0,0005%)
• PT Pertamina (Persero) Management of production, trading, transporta-
PT Pertamina (99,95%) September 23, tion, distribution, storage activities for lubricant
16 Active
Lubricants • PT Pertamina Pedeve 2013 and its derivatives
Indonesia (0,05%)
• PT Pertamina (Persero) Business management in the field of shipping, with

PT Pertamina
(99,95%) December 23, main business activity is the shipping of oil and
17 Internasional Active
• PT Pertamina Pedeve 2016 gas commodities, and other supporting activities.
Shipping
Indonesia (0,05%)
Human Capital development services, assessment

PT Pertamina February 25, and
(91%)
18 Training & 2002 Active consultation on management systems in
• PT Pertamina Pedeve
Consulting support of oil and gas and geothermal activities.
Indonesia (9%)
(99,999%) Hotel/motel, office buildings and rental of prop-
19 PT Patra Jasa July 17, 1975 Active
• PT Pertamina Pedeve erty/hotels.
Indonesia (0,001%)
(58,50%)
• Siti Taskiyah (10,935%)
PT Asuransi
• Insurance Co., Ltd November 25, Insurance services related to the operations of Oil
20 Tugu Pratama Active
• (5,294%) 1981 and gas industry and marine hull.
Indonesia Tbk
• Salvitas Limited
(15,75%)
• Masyarakat (9,521%)
Health care services and hospitals in Jakarta and
PT Pertamina (99,98%) October 21,
21 Active surrounding areas, Cirebon, Balikpapan, Tanjung,
Bina Medika • PT Pertamina Pedeve 1997
and Prabumulih.
Indonesia (0,02%)
Air transportation services, aircraft leasing and
PT Pelita Air January 24, scheduled flights (regular), organizes other related
22 (99,997%) Active
Service 1970 businesses or support business activities.
• PT Patra Jasa (0,003%)
PT Pertamina
(99,93%) Business management in the provision of venture
23 Pedeve July 25, 2002 Active
• PT Pertamina Patra capital
Indonesia
Niaga (0,07%)
(41,10%) Business activities in the fields of services, trade,
February 19,
24 PT Elnusa Tbk • Dana Pensiun Pertamina Active mining, development and industry
1969
(14,90%)
• Publik (44,00%)
• PT Pertamina Patra
Pertamina Niaga (50%)
International • PT Pertamina Retail October 19,
25 Active Downstream oil and gas in Timor Leste.
Timor (45%) 2015
S,A* • 4- Consorcio Timor
Progresso, Lda (5%)
PT Pertamina • PT Pertamina (Persero) December 20,

26 Not yet active Block exploration, exploitation and production
Hulu Rokan (100%) 2018
71
SECURING ENERGY
COMPANY’S GROUP STRUCTURE
UPSTREAM DOWNSTREAM
Pertamina 99,99% Pertamina 99% Pertamina 56,96%

Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia Public 43,04%
0,01% 1%
GAS
Hulu ENERGI Pertamina 48,99%
Pertamina 98,72% Pertamina 90,06% PGN 51,00%
Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia
1,28% 9,94% 0,01%
POWER INTERNATIONAL
Pertamina 99,89% Pertamina 100% Pertamina 60% Pertamina 99,999031%

Pertamina Pedeve Indonesia ** PT PGN Tbk 40% Pertamina Pedeve Indonesia
0,11% 0,000969%
PT KILANG
INTERNNATIONAL
Pertamina 99,9% Pertamina 99%
Pertamina 99,90% Pertamina 99,9%
Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia
0,1% 1% 0,10% 0,1%
*
Conoco Phillips Algeria

/Pertamina Algeria
Pertamina 99,999998% Pertamina 100% Pertamina 55%
Pertamina Pedeve Indonesia PHE Arun 45%
0,000002%
Pertamina 48,59%
PT Tuban Petro 19,16%
Vitol Tuban B.V 8,81%
Polytama Propindo 6,77%
Hulu ENERGI INDONESIA Tuban Petro Ltd 5,15%
Pertamina 41,10% Lain-lain ≤5%
DP Pertamina14,90% Pertamina 99,93% Pertamina 55%, Vico
Public <5% 44,00% Pertamina Pedeve Indonesia 20%, Jilco 15%,
0,07% Total EP Ind 10%
= Association
*) The Company has been established but is not yet operating
**) suspended
***) liquidated
72
COMPANY’S GROUP STRUCTURE
FINANCE & SERVICES
Pertamina 99,93% Pertamina 99,98%

Pertamina 99,912%
PT Patra Niaga 0,07% Pertamina Pedeve Indonesia
PT PTK 0,088%
0,02%
Pertamina 99,9995% Pertamina 99,999% Pertamina 99,997%

Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia Pertamina Pedeve Indonesia
0,0005% 0,001% 0,003%
PERTAMINA TRAINING & C ONSULTING
Pertamina 91%
Pertamina 99,95% Pertamina Pedeve
Pertamina Pedeve Indonesia Indonesia 9%
0.05%
Pertamina 58.50%
Salvitas Limited 15,75%
Pertamina 99,95% Siti Tasiyah 10,935%
Pertamina Pedeve Indonesia Insurance Co.,Ld 5,294%
0,05% Masyarakat 9,521%i
PT Seamiess Pipe
Indonesia jaya
Pertamina 100% Pertamina 10,36%

*** Tenaris Global 77,35%
PT Bakrie & Brother 10%
PT Krakatau Steel 2,91%
73
SECURING ENERGY
SUPPORT FUNCTION
HUMAN CAPITAL
The Role of Human Capital

For Pertamina, Human Capital (HC) is one of the most the achievement of the Company's Vision, Pertamina
important links of an integrated business chain. The compiled the HC Strategy House which reflected
performance and contribution of each individual has the HC vision and strategy that was in line with
the potential to determine the rate of business growth business needs. Thus, it is expected that human capital
in every aspect. Along with Pertamina's vision to management will run in a structured and effective
become a world-class National Energy Company, it manner so that each individual may provide the best
needs to be accompanied by improving the quality of contribution according to their capabilities.
all human capital within the organization. To support
74
HC Vision To be a Strategic Business Partner
and grow Talent for Pertamina to become World Class NEC
HC Outcomes
Human Capital HC Enabler
Attract, develop, Strong & competent High performance Effective Accurate, updated, HC that effectively HC policies that are
motivate & retain leaders that drive culture & Efficient comprehensive, inte- partner wuth the focus on the achieve-
the right talent high performance HC Service grated data to support business to realize ment of organization
organization Delivery decision making organization goals goals
Critical Success Factors

Clear the roles,
Commitment from Partnership with Strong Integration and Right Decision making Access to
objective and
BOD/BOC external parties Accountability Customization measurement support information
measurement
Support from inter- HC Capabilities Agile Change manage-

ment process Simplification Effective HCIS
nal stakeholders & Competencies Organization
External Factor People & Org Process Technology
Proposed Initiatives
Planning and Management Policy Corporate Culture

of Talent Sourcing Pertamina has built a Corporate Culture that highly
Pertamina conducts a strategic workforce planning values high performance and effective working
by considering a number of comprehensive aspects behavior, which is in accordance to the values of
including productivity, financial performance, business 6C and supported by a productive working climate
strategy, organizational change plans, internal in alignment with the employees engagement. The
movement, and the number of workers who will retire. understanding and implementation of the values of 6C
The results of the strategic workforce planning are is designed to shape the behavior of our people, which
translated into 6 (six) job fulfillment strategies, namely: will ultimately become the Company Culture and create
1. Buy, conducting external recruitment according the identity of the Company. Every individual working
to the Company’s needs, both fresh graduates and at Pertamina is required to act in line with the values
experienced hire with PWTT and PWT status. of 6C, which consists of: Cleanliness, Competitiveness,
2. Borrow, optimizing the resources of the Confidence, Customer Focus, Commercial, and
Subsidiaries through a mechanism of assistance to Capability. The Company also determines the
PT Pertamina (Persero). Characteristic of Values to equalize the perception of
3. Transform, using new methods in completing each definition.
work through reorganization, use of technology,
and digital transformation. In order to increase Strong Values and reduce Limited
4. Regroup, conducting changes in business Values, increase Employee Engagement (EE) and
strategy and business re-engineering processes. consistency in implementing Professional Practices
5. Build, developing employee capabilities in (Practice Pulse Check or PPC) within Pertamina, a
accordance with the demands of the business to Theme-O-Meter Survey is conducted to measure and
ensure the availability of successors at every level obtain input from workers and management of the
of position. three things mentioned above. In 2018, the Theme
6. Bind, retaining top talent through development O Meter Survey (ToMS) was conducted in December
programs that may increase added value to the within the environment of PT Pertamina (Persero) and
Company. several Subsidiaries.
The number of respondents to the Theme O Meter

survey has increased from 9,042 workers in 2017 to
10,395 workers in 2018. The increase in the number
of respondents referred to shows the increasing
concern of workers towards the health of the
Company's culture.
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The results of the Theme-O-Meter Survey, in general, RESEARCH & TECHNOLOGY

showed an increasing trend in recent years with the
highest index reached in 2018, with the following To realize national energy resilience and self reliance,
details: Pertamina must be able to optimize existing resources
a. Employee Engagement (EE): 86.1% and Practice while continuing to look for new resources. For
Pulse Check (PPC): 78.7%. Following are the this reason, Pertamina established a Research and
trends in the EE and PPC index. Technology Center (RTC). RTC is a function formed with
the aim of supporting Pertamina's aspirations towards
Entropy
13.60
world-class energy companies through integrated
13.50
13.24 innovation activities and generally achieving the same
13.40
standards as other world-class energy companies.
13.00
13.04
RTC supports Pertamina in 4 (four) aspects of research
12.80
12.78 and development activities, namely:
1. Optimizing current resources and increasing oil
12.60
and gas production from existing fields;
12.40 2. Accessing new resources, including untapped
2015 2016 2017 2018
resources from untouched areas;
From the results of the EE and PPC surveys in the 3. Increasing Pertamina's margins or business profits
last five years, it shows a tendency to decrease the through developing ideas, providing solutions and
gap between EE and PPC, this reflects an increase spreading the use of new technologies;
in employee engagement and management 4. Supporting Pertamina's business sustainability
practices. But for some aspects it still needs to through diversifying businesses such as the
be improved, namely related to Performance petrochemical, chemical and new renewable
Management, Carrier Management, Innovation energy businesses.
and Excellent Execution.
In 2018, RTC has carried out several research and
The survey results of all EE dimensions have reached development projects including:
85%, starting from the dimensions of Aspirations, 1. Technology research and development activities
Accountabilities, Collaboration, Recognition, and in the Upstream Research & Technology function
People Manager Interaction while the results of which are divided into 5 (five) research fields,
all dimensions of PPC above 77% are People namely Exploration Research, Development
Performance Management, Employee Engagement, Research, Drilling and Well Construction Research,
Close Leadership Gap, Sense of Urgency for Production Research and Geothermal Research.
Change, Motivation with Career / Opportunity and Some of the main projects that have been running
Values, and Execution Excellence. on this function during 2018 are as follows:
a. Improved Development Module Material
b. Cultural entropy decreased by 0.46% from 13.24% Selection for Tubing/Pipeline CO2 Environment;
in 2017 to 12.78% in 2018 (the lower the Cultural b. Design of Hg, As and H2S Adsorbents for
Entropy index, the healthier the company). The value Geothermal Exploration;
of Cultural Entropy in 2018 is getting closer to the c. Digital Petrophysics Research;
Prima / Healthy category. Following is the trend in d. Development of Stuck Pipe Early Warning
the movement of Cultural Entropy index. System for Drilling Rigs; and
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e. Chemical selection at Pertamina Laboratories catalyst), hydrocarbon solvents to clean the metal
to increase production with EOR at Pertamina and its manufacturing process (Solphy -2) and fuel
EP Jirak and Rantau Fields composition with a minimum octane value of 100
2. Technology research and development activities (Pertamax Racing).
in the Downstream Research & Technology
function which are divided into 4 (four) fields QUALITY SYSTEM AND KNOWLEDGE
of research namely Oil and Gas Research, MANAGEMENT
Process Development Research, Materials and
Chemicals Research and Petrochemical and Fuel Pertamina has established a Quality System and
Non Fuel Research. In this function, the activities Knowledge Management (QS&KM) function with
that become the main project during 2018 are the objective of improving the overall performance
research activities related to the development of of Pertamina through the creation of continuous
Pertamina's Asphalt. culture improvement, increasing the effectiveness
3. Research and technology development activities in in the standardized system of implementation and
the New & Renewable Energy function which are the knowledge sharing culture, which are all run
divided into 4 (four) research fields, namely New within the corridors of the business processes in line
Energy Development Research, Renewable Energy with Pertamina’s Priority of becoming a World-Class
Development Research, Power Development and Company.
Storage Management Research and Carbon
Capture and Storage Research. Some of the main The QS&KM function is designed to guarantee
projects that run in this function include: implementation of the quality of business processes
a. Research and Development of Biobutanol & of the Company through its four pillars of quality. The
Bioethanol 2nd Gen; four pillars consist of the Continuous Improvement
b. Development of Electrode Material Program (CIP), System & Standard Management
Components, Formulation Optimization (SSM), Knowledge Management (KMS), and Quality
and Production of Lithium Ion Battery (LIB) Management Assessment (QMA). The four pillars have
Prototypes; different roles at each level of the Company in ensuring
c. CO2 utilization for Value Added Products; its business qualities. In 2018, 31 people supported
and the QSKM function with the appropriate competencies
d. PyGas Production by Biomass Pyrolisis. in line with business demand and growth.
In order to perform optimally, RTC is also supported In 2018, the QS&KM function completed its duties,
by the R & T Planning and Commercial function which work programs, and had achieved its targeted
has three main pillars, namely: the pillar of business performance in order to support the Company’s vision
processes with the compilation of a governance of becoming a National World-Class Company. The
system (STK) RTC, infrastructure pillars for managing QSKM function continues to ensure good quality
and developing research facilities and human capital across all operations units, business units, and the
assets that will manage and determine the direction of Company’s domestic and overseas subsidiaries in
product and / or process development in Pertamina. line with the Pertamina Management System and the
Code of Pertamina. Pertamina continues to implement
Pertamina has registered 134 IPRs, of which RTC its policy through the QSKM function so as to ensure
participated in 41 patents with 19 patents granted, an improvement in the culture conducted continuously
including the formulation of hydrocarbon refrigerants across all operations/business/regional/units and the
as substitutes for synthetic R-12 and R-134a (Musicool) Company’s subsidiaries through the four primary pillars
refrigerants, the process of making hydro-processing activities as follows:
catalysts that are selective in saturating olefins and 1. Continuous Improvement Program (CIP)
removal of nitrogen compounds in hydrocarbon The CIP is a program of activities designed to solve
feeds and products produced from the process (NHT problems and improve work efficiency through the
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methods of PDCA and DELTA within Pertamina’s fixed assets, materials, resale commodities,
work habitat. In 2018, Pertamina succeeded in scrap by generating additional revenue of Rp.
Value Creation of more than Rp40 trillion as a 74.9 M. The Asset Management Directorate
form of commitment to conduct business efficiently is currently proposing an adjustment to
in the form of saving costs, additional revenue the Assets Write-off procedure so that the
and reduction costs. In 2018 sustainability site bureaucratic process can be more effective
visits were also carried out in order to ensure the and efficient.
sustainability of Pertamina Quality Assurance CIP c. Pertamina is currently resolving the problem
results implementation. From this activity, a value of assets by cooperating with functions and
creation of Rp525 billion was obtained from 30 agencies related to land acquisition.
CIP results. The value creation that was successfully d. Pertamina has conducted a land acquisition
carried out by Pertamina is a manifestation of process to support the company's operational
the Company's commitment to conduct business needs.
efficiently in the form of savings and effectiveness e. Digital transformation and historical writing
of the process in reaching even beyond the set • The Asset Management Directorate
revenue targets. In 2018, it was recorded that throughout 2018 continued to develop
3169 CIPs were resolved with an increase in CIP SIMA, i-P2P and e-UPP applications so
from 2017. The increasing number of CIPs resolved that it could support business processes
meant that Pertamina people began to get used within the Asset Management.
to solving work problems using PDCA and DELTA • Writing the history of all Pertamina
(Eight Steps Seven Tools) assets by tracking land documents,
chronologically compiling land
In 2018, the Asset Management Directorate acquisition, and documentation in order
successfully achieved the following performance to strengthen Pertamina's land ownership
achievements: status has been completed for 24
a. Transfer of Business Support Assets (APU) Pertamina assets.
Based on the Board of Directors Minutes of f. Optimization of Business Support Assets (APU)
Meeting No.RRD-105 / C00000 / 2018-S0 • Optimization of Business Support
dated 2 August 2018 concerning Transfer, Assets (APU) is carried out through self-
Data Improvement and Digitization of management, leasing, loan, business
Business Support Asset Data (APU), the Asset partnership, and divestiture (scrap)
Management Directorate conducts transfer for schemes.
the following purposes: • Pertamina conducted a synergy forum for
• Management of Business Support Assets subsidiaries and state-owned enterprises
(APU) centrally and integrated in order to optimize Pertamina's assets.
• The cost of maintaining Business Support • Planning for asset optimization with the
Assets (APU) does not burden the scheme of cooperation with Pertamina's
Technical Directorate subsidiaries as a vehicle.
b. Write off assets • Cooperation on Warukin Airport between
The Asset Management Directorate assists National Transportation Agency (Dishub)
in the process of writing-off the assets of the and Pertamina by assigning PT PAS
Technical Directorate in 2018 against 643
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• Pertamina develops assets by Pertamina has set out policies and long-term planning,
cooperating with Patra Jasa which is focused on the implementation of Excellence
• Submission process related to increasing in the Quality of Management Practices. Therefore
the status / ownership of assets of the the QSKM function for collaborating with other SOEs
Head Office and the Operations Unit for and other companies regarding Excellence in Quality
the procurement of goods / services and Management as well as increasing the competitiveness
Amendments of the Company. One part of the format for this
• Achievement of goods / services collaboration is the assessors’ exchange regarding
procurement activities that have been the assessment of KPKU, the Assignment of Standard
completed during the period of January System Auditors in the Cross Functions of Internal
to December 2018 totaling 10,838 Audit across several companies. It is expected that this
procurement processes of goods / collaboration will strengthen Pertamina’s resources in
services. improving Quality Assurance in terms of products and
services.
2. Knowledge Management System (KMS)
The KMS has an important role in improving In order to ensure more effective operations, the
the culture of integrated knowledge sharing QSKM Function regarding Pertamina’s Standardization
and Knowledge Management in the Company. & Certification manages the implementation of all
Pertamina is maximizing the implementation Standard System Management processes spanning
of technology in conducting the Knowledge all Operations Units, Business Units and Subsidiaries
Sharing through webinar and Knowledge Asset of the Company in order to meet our customer
Management, which is accessible throughout the expectations. The function of the Business System
Company through portal, which is: KOMET. In Process as a part of the QSKM continues to strive in
addition to that, KMS also manages Intellectual the process of managing the Company’s documents,
Property Rights resulting from the process of process of establishing a Working System and
continuous improvement based on the CIP in Correspondence Mechanism for the Company, which
Pertamina. The Knowledge Sharing activities is dynamically designed in order to support all of the
were held in offline format, online format (i.e.: Company’s business processes and operations.
webinar), and KOMET (portal) management aimed
at creating, collecting, reviewing, and distributing In assuring and improving the quality of innovation
Knowledge Assets throughout Pertamina. from Pertamina Quality People, the Quality
Management Corporate will strive to conduct a
3. Quality Management Assessment (QMA) sustainability audit so that the innovation results that
Pertamina’s Excellent Performance Criteria (KKEP), have been produced by Pertamina Quality Personnel
which is based on QMA, is intended to develop will continue to run well. In addition, the QMC
and create a culture of Excellence in Performance function also strives for existing innovation results to be
across all Business Units, Unit Operations and replicated in the Operations / Business / Subsidiary
Subsidiaries, so as to facilitate the achievement Units. As well as to maintain existing knowledge assets,
of Performance Excellence at the corporate level. the Knowledge Management function has managed
Through to the end of 2018, QMA was applied in Intellectual Property Rights as a result of a sustainable
32 of Pertamina’s Business Units, Unit Operations improvement process at CIP-based Pertamina.
and Subsidiaries with the category of Emerging
Company.
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CORPORATE ICT Pertamina Digital Transformation Philosophy:

1. Focus on the main theme of Digital Transformation
Information, Communication & Technology (ICT) 2. Directed based on business needs and
increasingly plays a role in the business world. implemented in an integrated manner
At present almost no business can survive without 3. Performed holistically aspects of people, process
involving the role of ICT. Likewise with Pertamina. and technology
4. Flexibility in developing solutions
Pertamina implements ICT in accordance with the
needs and alignment of strategies and cooperation Pertamina Digital Transformation Team has formulated
programs and takes into account the needs of each 16 Main Themes that will be prioritized in Digital
business unit and supporting unit. Corporate ICT in Transformation and in 2018 selected 9 main themes
Pertamina is responsible for providing comprehensive namely Digitizing Gas Station, B2B - CLM (Customer
and integrated Information and Communication Loyalty Management), Logistic Planning System,
Technology (ICT) services across all lines of companies Integrated SCM Planning, Predictive Maintenance,
both in PT Pertamina (Persero) and Subsidiaries. Integrated GGR (Geology, Geophysics & Reservoir),
SSO / SSC (Shared Service Organization / Shared
In 2018, there was a change in the organization Service Center), Digital HSSE and Corporate
structure of Corporate ICT starting with the change Command Center.
in the name of Corporate Shared Service (CSS) to
Corporate ICT (CICT) and the existence of 2 new Pertamina realizes that digital transformation is not
functions, ITASP (Architecture, Security & Policy) only related to technology and process aspects, but
functions and Digital Transformation Functions. The also the aspect of people (culture) is an important part
IT ASP function was formed to formulate policy, to consider. Therefore, throughout 2018 Pertamina
architecture and information security as a strategy form runs a digital culture program, including the Pertamina
of Corporate ICT function in facing the threat of cyber Digital Community program, Digital Expo, Digital
crime and the Function of Digital Transformation was Intelligence, Digital Roadshow, Digital Acceleration
formed to guard digital transformation in Pertamina. Index (DAI) Survey and Digital Culture Benchmarking.
Pertamina Digital Transformation Moreover, activities in 2018 were also carried

Considering the increasingly important role of ICT in out by involving workers who were part of digital
the business world, digital transformation becomes transformation, such as the 2018 Pertamina Energy
a necessity to increase competitiveness. Since 2017 Hackathon, e-Sport Competition, Paper Competition,
Pertamina has carried out a digital transformation and so on.
marked by Digitizing Marketing. In 2018, the
Pertamina Digital Transformation journey entered a
new phase which began with the Pertamina Digital
Transformation and Pertamina Digital Expo BTP Kick-
Off activities.
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Strategic Program for Corporate 5. Development of Big Data Analytics to support

ICT Functions in 2018 Corporate Business Analytics
In order to support the realization of the company's Development of big data analytics is done to build
vision and mission in 2018, Corporate ICT has carried a data warehouse that is integrated and reliable,
out several strategic programs, including: develops data analytics from integrated ERP and
1. Tax Data Integration with the Directorate General non ERP data sources, and provides analytics
of Taxes (DGT) capabilities to information / data to support
Corporate ICT supports Pertamina's tax data business development.
integration program with DGT on H2H (Host-to- 6. Standardization of Data Communication Network
Host). Currently, Pertamina has implemented the Infrastructure in Pertamina (Persero)
E-Faktur and E-Bupot program, and has become The purpose of standardizing data communication
the first SOE to implement this program. network infrastructure at Pertamina (Persero) is
2. Upstream Business Management Transfer to provide Pertamina communication services
In 2018 Corporate ICT has been actively involved by conducting Pertamina Data Network
in upstream business management to oversee the Standardization and implementation of Defined
management transition on ICT. Some management WAN Software (SDWAN) and Video Conference
transfer projects during 2018 such as PHE East System redesign at Pertamina (Persero).
Ambalat management, PHE Tuban East Java, PHE 7. Implementation of One Data Center
Ogan Komering, PHE OSES, Pertamina Hulu East Implementation of Pertamina 1 (One) Data Center,
Kalimantan (PHKT) and Pertamina Hulu Sanga so that all information systems have Pertamina
Sanga (PHSS) Wide and Support System standardization in
3. Digital Culture Units / Areas to facilitate and ease the flow of
Digital Culture activities are needed for changing information as well as to improve the Information
the way of thinking and working organizations, System security.
with the mindset of Agile, Collaborative, 8. Digital Reporting Service
Innovative, Customer Centric, Data-Driven, Digital Reporting Service is implemented to reduce
and Engaged to deal with digital disruption. backlogs, provide reports on user needs on time,
Digital Culture is a contributor to BTP Digital reduce human error (automation) on issuing
Transformation. reports, and assist in decision making.
4. Corporate Command Center 9. Data Quality Control Automation
The Project Corporate Command Center aims Increasing control over the quality of data
to build an intensive communication center and managed by the Shared Processing Center (SPC)
Pertamina operational information with a data- and Automated Data Quality Monitoring.
time to support Pertamina's vision for 2025 to 10. Pertamina World Class IT Governance
become a World Class National Energy Company. The aim of Pertamina World Class IT Governance
With the existence of Corporate Command is to develop and implement an IT governance
Center, Pertamina will have a real-time end-to-end framework based on best practice that is in line
management and operational information center with Pertamina's business processes. Fixing,
and become an Executive Gallery and showcase building, and implementing standards for the
of Pertamina's performance for Pertamina's process and integrated STK for Pertamina Wide.
stakeholders and important guests (VVIP). 11. Cyber Security Resilience Implementation (CSRI)
CSRI is an effort to realize the digital Pertamina
resilience transformation and sustainability of
CSMA (Cyber Security Maturity Assessment)
project in 2017.
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ASSET MANAGEMENT 2. Monetization of Business Support Assets

In order to increase revenues and reduce the
In order to maximize the Asset Potencies, Business company's operating expenses in managing
Network Development, and the Company’s Revenue, Business Support Assets, Pertamina conducts:
Pertamina has established the Asset Management • Optimization of Business Support Assets,
Function, which is integrated with the Directorates, especially for Free & Clear assets.
Operational Units and the Company’s subsidiaries in • Increased value of Business Support Assets
carrying out its asset management and for product/ • Synergy between subsidiaries and its affiliates
service supply in the business process in accordance • SOE synergy
with business requirements and growth. 3. Improving land ownership status
In order to improve the status of land ownership,
The Asset Management Directorate is responsible for Pertamina conducts:
managing Pertamina's Business Support Assets (APU) in • Securing assets by working with HSSE
order to support the Company's core business to be more functions
effective and efficient. Pertamina refines the Organization • Discharging assets from residents without
Structure of Asset Management Directorate for manager rights in collaboration with HSSE functions
level and above based on Decree No.Kpts-58 / and related agencies
C00000 / 2017-S0 dated October 25, 2017 and the • Certification of land
Organization Structure of Asset Management Directorate • Settling land issues
for level below manager based on Decree No.Kpts-01 • Recovery of assets
/ K00000 / 2018-S0 dated January 22, 2018. With 4. Asset restructuring
the improvement of organization, Pertamina is expected For more effective and efficient asset management,
to be able to manage Business Support Assets (APU) in Pertamina conducts asset restructuring in the form
order to increase the Company's revenue and support of:
the company's core business to be more effective and • Divestment of assets
efficient. • Inbreng to subsidiaries
• Ruistlag or swap to other government
The Asset Management Directorate has a mission to institutions / agencies
carry out professional asset management as a strategic • Equity participation in the government
partner of Pertamina's business activities and based on 5. Procurement Excellence
commercial principles by prioritizing Good Corporate • Centralized procurement of strategic goods
Governance, through the main pillars of activities, & services (Corporate, Directorate, Unit
namely: Operations / Business Units)
1. Improving service to Pertamina’s customers as the • Pertamina Incorporated Synergy (Mapping
strategic business partner & Optimizing AP Competencies through
Pertamina implements an increase in services to Umbrella Contract)
support Pertamina's core business activities, in the • Optimization of Inventory & Lean Warehouse
form of: • Digitizing Procurement (Procurement 4.0)
• Provision of land for company needs • Implementation of ISO 37001: 2016
• Provision of facilities for office & Company • International Certification of Procurement
House (RDP) Competence
• Building Management, facilities and
infrastructure that are effective and efficient
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HEALTH, SAFETY & ENVIRONMENT 7. Report all incidents transparently and carry out
investigations to prevent the occurrence of similar
The Health Safety Security Environment (HSSE) is a incidents;
fundamental aspect in Pertamina's operations. Every 8. Implementing HSSE performance of the Company’s
procedure and working stage in all mining and personnel, assets, data and information in the
production activities up to distribution is carried out assessment and appreciation to all employees.
in accordance with applicable rules and guidelines.
All mining entities and Pertamina's operations, from
operators in the field to management, as well as third-
party contractors involved in Pertamina's activities,
must comply with HSSE implementation.
The HSSE aspect is one of the main aspects of

Pertamina's business process. Management determined
that HSSE & Sustainability is the foundation of the
2019-2026 corporate strategy, with the main mandate
of implementing the HSSE Excellence culture well in all
operational aspects.
The mandate is then stated in the Company's HSSE

policy signed by the President Director in August 2018
with the following commitments:
1. Prioritizing the company’s HSSE aspects in the
company’s business management;
2. Complying with HSSE regulations and use
appropriate technology according to national and
international standards;
3. Reducing risk as low as possible to prevent
incidents in personnel, assets, information and the As a step/effort to implement the policy, Management
environment; has determined 8 HSSE strategic programs, namely:
4. Conducting intervention on the condition of 1. HSSE Governance
activities and actions that are considered unsafe; 2. Safety Culture
5. Ensuring understanding and implementation of 3. Emergency Readiness
Corporate Life Saving Rules (CLSR) on workers and 4. Safe Work Practices
work partners; 5. Environment Excellent
6. Increasing workers' awareness and competence 6. Security Excellent Level
as well as work partners so that they can carry out 7. HSE Leading Programs Standardization
their work correctly, safely and eco-friendly; 8. OH-IH Excellent
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Hsse Governance
1 Principles, policies, procedures and guidelines, so that HSSE can direct
and control the functions and processes
Safety Culture
1 2 Attitudes, beliefs, perceptions & values demonstrated in safety at workplace.
Safety culture at the highest level (generative) is that safety has become
Hsse
8 Governance 2 a “way of life”
Emergency Readiness
OH – IH Safety
Excellent Culture 3 Organization, resource management & responsibility to handle all aspects of
emergency situation (readiness, response and recovery)
Safe Work Practies
4 Written method that shows how to do tasks with minimal risks to
HSSE Leading 8 Program Emergency
7 Programs Strategis HSSE Readiness 3 personnel, equipment, materials, environment and processes
Standardization Evironment Excellent
2018
5 Perform environmental management beyond requirements
and useful efforts for the community in the long run
Security Excellent Safe Work
Security Excellent Level
Level Practies
6 Physical and non-physical security through big data management to make
Evironment
6 Excellent 4 data analytics with a view to mitigate potential occurrence of security risk.
HSSE Leading Programs Standardization
7 Standardization of HSSE leading programs for all directorates
5
/ UO / AP, starting fromplanning, execution to monitong.
For example, management walkthrough
OH – IH Excellent
8 The OH-IH process is in place and has been implemented.
Sustainable system, supported by continuous improvement
While the main HSSE programs carried out during 6. Implementation of cross & internal directorate
2018 are: management walkthrough (MWT) as a leader
1. Compilation of SUPREME towards one Pertamina learning center and direct leader communication
HSSE Management System with a risk-based forum to the frontliner
approach, adhering to the principle of sustainable 7. Integrated HSSE audit implementation in 74
improvement and PDCA and will gradually operating unit / field locations, consisting of HSSE
replace the protocol of ISRS, SMP, Fit to Work audit System management based on ISRS protocol,
2. Implementation of Reward & Consequences on fit to work audit (FtW), Cultural Security and
HSSE performance and enter HSSE weight in Survey Management System audit
fit proper test and fit official interview and blast
learning from event (LFE) In 2018, integrated audits/assessments started with
3. Implementation of crisis management exercise and the additional number of AP / Operating Units /
emergency drill routinely to train readyness on Fields audited / assessed compared to 2017. As for
facing crisis / actual conditions integrated HSSE audits / assessments including:
4. Issuance of 11 Corporate Life Saving Rules 1. Audit of HSSE MS ISRS 2018 Protocol
combined with Demo Room to increase employee In 2018 an HSSE MS ISRS Protocol audit was
competence, especially outsourcing carried out in 74 operating units / fields by
5. Implementation of PROPER and audit protocol for internal assessors and external assessors. The
Pertamina Environment Regulation Compliance number of audit locations increased by 12 APs/
Assurance (PERCA) as the UO / Location / AP Operating Units/ Field, when compared to the
environment management baseline that is not number of assessment locations in 2017 as many
included in the PROPER assessment as 62 APs/Operating Units / Fields. A total of 41
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AP / Operating Units / Fields managed to obtain INTEGRATED SUPPLY CHAIN

excellent levels, with 11 APs/Operating Units/
Fields exceeding the target level set. The ISC functions as the responsible party for the
2. Implementation of Fit to Work (FtW) Audit / Downstream Optimization and procurement/sales of crude
Assessment oil and refinery products and is mandated to procure
In 2018, the Fit to Work audit was started as a crude oil and refinery products efficiently so as to bolster
data baseline for further work program preparation Pertamina’s revenue. Thus, the ISC function is to continue,
to realize OH-IH excellent. The FtW audit was transform and improve its performance. The ISC function
carried out at 77 AP / Operation / Field Units. transformation roadmap consists of 3 (three) main phases
FtW level audits / assessments were assessed including Phase 1.0 or Quick Win Phase, Phase 2.0 or ISC
with a scale of 0-4.0 and as many as 60 AP / Class Phase, and Phase 3.0 or Talent Engine Phase. For
Operating Unit / Field (78% of the total AP / the Breakthrough Project (BTP) of 2018, ISC contributed to
Operation Unit / Field) obtained FtW Level ≥2 , 0. Pertamina’s efficiency program in all lines including:
3. Audit Based Management System Protocol 1. BTP Downstream Operational Excellence (DOE)
Security (SMP) Audit SP 2018 was conducted in 73 2. Optimizing FSO Crude of Teluk Semangka
locations, this number increased when compared to 3. Maximizing the Domestic Crude Purchases of PSC
2017 which was carried out in 38 locations. The contractors
implementation results of the SMP in 2018 are as
many as 42 locations to get Gold / Gold rankings The BTP Downstream Operational Excellence (DOE)
with an average score of all AP / Operating Units program is a collaboration of BTP between 3 Functions
/ Fields getting Gold Level is 87%. The audit was namely Processing, Marketing and ISC with a target of
carried out by Pertamina's internal assessor. decreasing the Integrated Port Time (IPT), optimization of
4. HSE Culture Survey infrastructure use in Processing and Marketing, source
In 2018, measurements of the HSE culture maturity optimization for importing crude oil and products, and
level were carried out to determine the changes that acceleration infrastructure development in supporting IPT
occurred after the implementation of improvement
programs in 2018. In general, in 2018 Pertamina In order to follow up and implement ESDM Regulation
(Persero) HSEPT culture score was 3.97 or an No. 42 Year 2018 concerning the Priority of Fuel
increase of 0.25 compared to 2017, with the Utilization for Fulfilling Domestic Needs, as well as to meet
population of respondents in the Pathological to Pertamina's refinery needs, ISC currently obtains crude
Calculative culture level reduced by 6.69%. oil from domestic (GOI, Pertamina Subsidiary and KKKS
Purchases) & import purchases. In value, import purchases
In addition to this in the environmental aspect, in 2018 are relatively higher than domestic Crude Oil because
PT Pertamina (Persero) succeeded in garnering 82 Gold there are additional transportation costs. Meanwhile,
and Green PROPER with details of 13 Operation / currently some domestic crude oil such as KKKS have
Field Units successfully gaining Gold PROPER and 69 not yet been fully absorbed due to tax problems. This
Operating Units / Fields successfully gaining Green aims, among other things, to increase the purchase of
PROPER. KKKS Domestic MM portion so that it is expected that the
domestic MM portion processed by the Pertamina Refinery
will be greater and overall shall increase the Downstream
margin.
85
SECURING ENERGY
MANAGEMENT
DISCUSSION AND
ANALYSIS
Production optimization and synergy
between business units have given
Pertamina the success to achieve positive
performance which further firm up its
commitment to strengthen the national
energy security and independence.
A number of rowing teams wearing
traditional clothes are racing on a large
river. This boat race is a cultural activity
of the Riau people called Pacu Jalur. Pacu
Jalur has an in-depth philosophy of the
importance of unity in achieving success.
ECONOMIC REVIEW

GLOBAL ECONOMIC
GDP (%)
7.0
China
6.0
Indonesia
5.0
Thailand
4.0
World
3.0
2.0
United States
Euro Zone
1.0
Japan
0.0
2016 2017 2018e 2019f 2020f 2021f
Source: World Bank, Jan 2019
88
ANNUAL REPORT 2018
INDUSTRY REVIEW
The global economic conditions in 2018 were colored 6.00%. This measure was also intended to strengthen
by uncertainties. One of these uncertainties was caused Rupiah exchange rate against the USD that depreciated
by a trade war between the United States (US) and for most of the year 2018.
China. The trade war involving the world's two largest
economies significantly impacted flows of the world
IDR Movement of Rupiah exchange rate in 2018
trade. As a result, the global economy in the second
15,500
half of 2018 grew slower than that in the first half of
15,179
2018. 15,000 14,869 14,697
14,560
14,500 14,415 14,497
At the same time, the US Central Bank (The Fed) set a 14,060 14,036
14,000 13,803
policy to raise interest rates. Throughout 2018, the Fed 13,758
13,590
was recorded to have raised its interest rate for four 13,500 13,380
times to the level of 2.5%. The increase in the Fed's 0

Month
interest rate also had an impact on the global financial 1 2 3 4 5 6 7 8 9 10 11 12
market conditions, where investment flows were

directed towards risk aversion, so that the global stock
markets were corrected sharply. With the right economic policy, the Government was
able to suppress Rupiah exchange rate weakening
The global economic conditions were getting more that occurred for most of the year 2018. In fact,
uncertained with the strengthening of the USD Rupiah exchange rate against the USD once touched
exchange rate against almost all foreign currencies, Rp15,200 per USD, the lowest since the 1998
including Rupiah. economic crisis.
The global economic slowdown in 2018 was reflected With quite strong economic fundamentals, Indonesia's
in the slowdown of China’s economy with a growth economy was able to surmount economic challenges
rate of 6.6%, the lowest in the last 28 years. On the in 2018 and to record a positive growth. Throughout
flip side, the US economy grew quite strong in 2018 2018, Indonesia's economy grew 5.17%, higher than
with a growth rate of 2.9%, an increase compared the previous year's growth of 5.07%. Despite still
to the previous year's economic growth rate of 2.2%. below the government's growth target of 5.40%, this
However, the US economic growth is predicted to slow achievement is a very good result. Indonesia is able
down again in 2019 due to, among others, the impact to maintain a positive trend in economic growth in the
of its trade war with China. past 4 years.
INDONESIA'S ECONOMY Indonesia's economic growth in 2018 was influenced

by an increase in consumption spending on the back
Being a part of the global economic ecosystem, the of good management of inflation by the Government.
Indonesian economy is also affected by uncertainty Inflation rate in 2018 was 3.13% or lower than that
in the global economic conditions. This is reflected in in 2017 of 3.61%. This achievement is in accordance
Indonesia's trade balance which has a deficit of US $ with Bank Indonesia (BI)’s inflation rate target of 3.5%
8.6 billion in 2018. (± 1%).
To anticipate the impact of global economic Indonesia was also able to record the realization of
uncertainties, the Government and Bank Indonesia have Domestic Investment and Foreign Direct investment. The
taken a range of policies, one of which by increasing total investment realization in 2018 reached Rp721.30
the BI 7 Days Repo Rate in six phases to the level of trillion or grew 4.11% compared with Rp692.9 trillion
89
SECURING ENERGY
LINE OF BUSINESS

in the previous year. This increase is in line with the Table of Indonesian Economic Indicators Indicator
growth of Domestic Investment to Rp328.6 trillion in Indicator Unit 2018 2019
2018, from Rp262.3 trillion in 2017. Meanwhile, FDI
Economic
(%, yoy) 5.2 5.3
fell 8.8% from Rp430.5 trillion in 2017 to Rp392.7 growth
trillion in the following year. Inflation (%) 3.50 3.50
Exchange rate
Moreover, consumer confidence index in 2018 (Rp/USD) 13,973 14,400
Rupiah
strengthened and the banking industry experienced 3-month Treas-
improvement by posting credit growth of 12.45% and ury Bills (SPN) (%) 5.00 5.30
interest rate
increased credit quality indicated by the lower ratios
of net and gross non-performing loans of 2.67% and Oil Price (USD/barrel) 70.0 70.0
1.14%, respectively. (thousand bar-

Oil Lifting 775 750
rels/day)
Appropriate and effective economic policy has also (thousand

barrels of oil
prompted Moody's Investor Service (Moody's) rating Gas Lifting 1,116 1,250
equivalent /
agency to increase the Sovereign Credit Rating (SCR) day)
of the Republic of Indonesia from Baa3 / Positive Source: Ministry of Finance
Outlook to Baa2 / Stable Outlook.

The consumption sector both from households
Outlook 2019 and the government is still the main catalyst for
Indonesia's GDP growth in the coming year.
The Indonesian Government projects Indonesia’s Household consumption expenditure is projected
economy to grow 5.3% in 2019, higher than the to grow 5.1% while government consumption rises
projected GDP growth of 5.2% in 2018. Well-proven slightly to grow 5.4% on the back of continued
control of inflation sustains a stable inflation at the infrastructure development. The Government allocates
level of 3.5%. Meanwhile, the Rupiah exchange rate infrastructure development budget of Rp402.5 trillion,
is predicted to remain influenced by the dynamics in a 2.4% increase in 2019. In line with this continued
the global market, so that the pressure on Rupiah still infrastructure development, Indonesia's infrastructure
continues and Rupiah exchange rate against the USD quality has improved out of 137 countries (an
is estimated at 14,400. World oil price is predicted to increase by 9 ranks from 2013-2014) based on the
stay at the level of 70.0 US dollars / barrel in line with Global Competitiveness Report data (2017 - 2018).
continued commodity demand in 2019. In addition, Indonesia's logistics performance was
ranked 46th out of 160 countries (an increase by 17
ranks from the previous year) based on the Logistics
Performance Index data (2018) where the rank of
infrastructure as one of the measurement components
also improved from 73 to 54.
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91
SECURING ENERGY
INDUSTRY REVIEW

In 2018, crude oil prices in the Brent and WTI markets fluctuated. After
touching the highest point in October 2018 at respectively USD 84.1
and USD 75.5 per barrel, Brent and WTI prices slumped bottoming
out in 18 months to USD 51.6 and USD 43.6 per barrel respectively in
December 2018, and closed at the level of USD 54.6 and USD 46.5
per barrel respectively by end of 2018.
92
ANNUAL REPORT 2018
LINE OF BUSINESS
85
80
75
70
65
60
55
50
45
40
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
BRENT CRUDE WTI CRUDE
Source: Bloomberg, 2019
85
80
75
70
65
60
55
50
45
40
Jan/17 Apr/17 Jul/17 Oct/17 Jan/18 Apr/18 Jul/18 Oct/18
BRENT CRUDE WTI CRUDE
Source: Bloomberg, 2019
Rising oil prices are triggered by fears of reduced oil Along with the fluctuation of world oil prices,
supplies due to sanctions against Iran and the crisis Indonesian Crude Price (ICP) has also fluctuated. In
in Venezuela, while OPEC and other countries are January, ICP price was at USD 65.6 per barrel, while
predicted not to increase oil production. All these gave ICP SLC was at USD 65.8 per barrel. ICP price was
rise to a fear among market players and triggered price at its highest level in October to reach USD 77.6 per
increases. barrel and USD 78.1 per barrel for ICP SLC. When the
world oil prices dropped, ICP price was also affected
However, when the global economic outlook was down to USD 54.8 and USD 55.6 per barrel for ICP
revised down, oil prices were affected down. IMF has SLC.
revised down its global economic forecast for 2018
and 2019 by 0.2% from the previous projection to
3.7%, one of which is attributable to the US and China
trade war that is predicted to cause a decline in oil
demand.
93
SECURING ENERGY
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7,0
7,0
7,0
7,0
7,0
7,0
7,0
7,0
7,0
8
8
18
8
8
18
8
18
18
8
8
-1
-1
-1
c-1
r-1
n-1
n-1
l-1
g-
p-
ct-
b-
ay
ov
ar
Ap
De
Au
Ju
Se
Fe
Ja
Ju
O
M
WTI Spot Brent Spot Opec Crude Oil Basket ICP N ICP-SLC
Source: Bloomberg, Ministry of EMR, 2019
Anticipating the development of world oil prices, the The Energy and Mineral Resources Ministerial
Government of Indonesia has issued a range of oil Regulation No. 42 Year 2018 on Priority to Utilization
and gas related policies, which have an impact on of Crude Oil for Fulfillment of Domestic Demand
Pertamina's operations and performance. The policy provides an obligation for the Company to prioritize
was made to release pressure on Indonesia's trade the absorption of domestic crude oil and condensate
balance, especially from oil and gas imports, maintain to be processed in the Company’s refineries; while the
the state's foreign exchange reserves and sustain contractors are obliged to offer part of their crude oil
people’s purchasing power. cargo to the Company before being sold / exported by
other parties.
The Energy and Mineral Resources Ministerial
Regulation No. 41 Year 2018 on the Provision and The government also issued Regulation No. 43 Year
Use of Biodiesel in the Framework of Financing by 2018 which replaced Presidential Regulation No. 191
the Indonesia Oil Palm Plantation Fund Management Year 2014, which allows the Ministry of Energy and
Agency is a legal framework that obliges Pertamina as Mineral Resources, based on certain conditions, to
a Fuel Business Entity to distribute fuel with biodiesel determine retail selling price of certain fuel products
content, both for retail and industrial markets. (subsidized fuel and special assignment fuel) different
from the formula calculation.
94
ANNUAL REPORT 2018
Oil and Gas SOE Holding In connection with the matter, a Deed of Sale and
Purchase of Pertamina’s 51% shareholding in Pertagas
To realize national energy security and independence, to PGN was signed at the end of December 2018,
since 2016 the Government has planned to form a making So now PGN has 51% shareholding in
holding company which oversees SOEs in the Oil Pertagas. The acquisition of Pertagas Group (including
and Gas Sector. Based on the Energy Sector SOE its subsidiaries Pertagas Niaga, Perta Arun Gas, Perta-
Roadmap, there is a need for a consolidation of SOE Samtan Gas, and Perta Kalimantan Gas) by PGN will
gas business in order to increase the use of domestic bring some benefits, including:
natural gas involving PT Pertamina (Persero), PT 1. Pertagas can be part of PGN, a public
Pertamina Gas (Pertagas) and PT Perusahaan Gas company for which the governance must be
Negara Persero Tbk (PGN). held accountable to the public and under the
supervision of FSA. In addition, the culture of
After going through a 2-year preparation phase, in Good Corporate Governance (GCG) can also
2018 the government appointed PT Pertamina (Persero) increase the trust of customers / business partners.
as State-Owned Oil and Gas Holding Company. The 2. Pertagas can be part of PGN which has flexibility
business merger of PGN and Pertamina is an initial in managing retained earnings for developing the
strategic step to increase effectiveness and strengthen gas business.
the gas industry value chain integration in Indonesia. 3. The business merger may not be too difficult to
be done because Pertagas and PGN have the
Formation of the Oil and Gas SOE Holding was same business lines in terms of transportation and
marked with the signing of the Deed of Transfer of B trading of gas.
Series Shares amounting to 56.96% owned by the 4. The potential for synergy can be maximized
Government of Republic of Indonesia in PGN to PT because strategic decision making for the upstream
Pertamina (Persero) on April 11, 2018. to downstream business lines in the gas sector is
carried out in one new management.
To help speed up the process of establishing the 5. The creation of end to end operations in which
Holding, there is a need to exercise a corporate action midstream and downstream businesses in the
in the form of divestment of Pertamina's ownership gas sector (CNG, LNG regasification, and
in Pertagas, a subsidiary of Pertamina, to PGN. The LPG processing) will be integrated so that
divestment is done with purposes as follows: implementation of development strategies will be
1. To promote national energy security through the easier to optimize benefits for the Government and
aspects of availability, accessibility, affordability the society.
and acceptability. 6. Potential savings in operational and investment
2. To strengthen Pertamina's gas business as a whole costs / CAPEX because there is no overlapping
through integrated management of gas business in the development of gas transportation
by PGN. infrastructure.
3. To Increase value creation by increasing efficiency 7. Pertagas acquisition by PGN will avoid
and optimizing gas transmission and distribution competition between the two companies in the
infrastructure. market.
4. To encourage the growth of gas business by
increasing investment capacity to expand into The merger of PGN as a subsidiary of Pertamina will
potential regions (demand creation). make Pertamina a gas company with the longest gas
pipeline network in ASEAN, which is 9,600 km in
length.
95
SECURING ENERGY
BUSINESS PERFORMANCE OVERVIEW

UPSTREAM SECTOR
Pertamina's upstream business activity is managed by The above activities are carried out by the Company
the Upstream Directorate, which include exploration, through its Upstream Subsidiary Entities (APH) acting
drilling, development, and production of oil and gas as strategic armlength of the Company in the upstream
and geothermal, provision of technology services sector, namely:
and drilling services both within and outside the • PT Pertamina EP (PEP)
country. In order to achieve upstream growth as one of • PT Pertamina Hulu Energi (PHE)
Pertamina's 8 Priority Pillars, the business strategy in • PT Pertamina EP Cepu (PEPC)
the Upstream sector is to increase production and add • PT Pertamina EP Cepu Alas Dara Kemuning (PEPC
new oil and gas reserves, both organically through ADK)
Improved Oil Recovery (IOR) and Enhanced Oil • PT Pertamina International Explorasi Produksi
Recovery (EOR) activities on existing assets, as well as (PIEP)
inorganically by exercising merger and acquisition (M • PT Pertamina Geothermal Energy (PGE)
& A) strategy of oil and gas blocks both at home and • PT Pertamina Drilling Services Indonesia (PDSI)
outside the country. • PT Pertamina Hulu Indonesia (PHI)
• PT Elnusa Tbk.
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Operatorship of
Ex-Terminated Working Areas
In order to realize the aspiration, in 2018

Performance of Upstream Sector in 2018 Pertamina acquired rights to operate 13
In 2018 Pertamina’s total oil and gas production was 921 ex-terminated working areas with contract
MBOEPD, 33% higher than the production in 2017. Oil periods end in 2018–2021 pursuant to the
production in 2018 was 393 MBOPD, a 15% increase Energy and Mineral Resources Ministerial
compared to the previous year. While gas production Regulation No. 15 Year 2015 on the
was 3,059 MMSCFD, a 50% increase compared to the Operatorship of Oil and Gas Working Area
previous year. The largest contributor to the oil and gas with Soon-to-expire Cooperation Contract,
production was PEP, followed by PHI, PHE, PIEP, and PEPC. which has been amended with the Energy and
Production of terminated Working areas as much as 58 Mineral Resources Ministerial Regulation No.
MBOEPD or 3% of Pertamina's production was listed in 30 Year 2016.
PHE and PHI. When compared with last year, in general,
the oil and gas production increased. Overseas Working Out of the 13 Ex-Terminated Working Areas
Areas contributed 16.6% to Pertamina's total production, with operatorship rights, 8 Working Areas
which comes from the Working Areas in Asia Asset, have been effective in 2018, namely Ogan
Middle East Asset, and Africa Asset. Komering, Tuban, Sanga-Sanga, South
East Sumatra, North Sumatra Offshore,
Geothermal is produced by PT Pertamina Geothermal Tengah (included in the Mahakam Working
Energy (PGE), which operate a total of 14 geothermal Areas), Attaka and East Borneo. Whereas
Working areas with a total installed capacity of 1,822 Raja Working Area and Jambi Merang
MW, consisting of 617 MW of own-operation working Working Area will only be effective in 2019
areas and 1,205 MW of joint operation working areas. and Kepala Burung Working Area and
Own-operation working areas consist of: Salawati Working Area will be effective in
1. Kamojang area (235 MW capacity and electricity 2020. Meanwhile, Rokan Working Area,
equivalent production YTD December 2018 of 1,871 the largest national oil producer, will be
GWh), effective in 2021. Currently Pertamina and
2. Ulubelu (220 MW capacity and electricity equivalent the Government are preparing a cooperation
production YTD December 2018 of 1,410 GWh), contract with gross split scheme.
3. Lahendong (120 MW capacity and electricity
equivalent production YTD December 2018 of 725 In addition, on January 1, 2018, Pertamina
GWh) and Karaha (30 MW capacity and electricity has also commenced the operation of
equivalent production YTD December 2018 of 176 Mahakam Working Area, of which the right
GWh). to operate was granted to Pertamina in 2015.
4. Sibayak (12 MW capacity, currently not producing
due to damage to the third party’s PLTP) With these rights to operate, Pertamina's oil
production will increase, so that Pertamina is
Total realization of PGE's electricity equivalent production closer to realizing the aspiration of national
from its own-operation working area in 2018 was 4,182 energy security and independence.
GWh. This achievement was 7% higher than that in the
previous year
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Daily Oil and Gas Production
Crude Oil (MBOPD) Natural Gas (MMSCFD) Oil and Gas (MBOEPD
600 4000 1000

3,059 921
393 3000 800
400 342 693
278 312 2,035 650
1,902 1,961 607
2000 600
200
1000 400
0 0 200
2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018
Annual Oil & Gas Production
Crude Oil (MMBO) Natural Gas (BSCF) Oil and Gas (MMBOE)
200 1,500 400
336
144 1,117
150 300 256
125 1,000 238
114 221
102 743
100 718 200
694
500
50 100
2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018
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Geothermal Production (GWh)

Exploration Activities
5000 Throughout 2018, total realization of exploration
4,182
3,900
4000 drilling was 14 wells consisting of 8 PEP wells, 5 PHE
3,057 3,043
wells, and 1 PGE well. While the total realization of
3000
2D Seismic was 2,490 km consisting of PEP 1,090 km
2000 and PHE 1,400 km. The total 3D Seismic realization
1000 covering 928 km² consists of PEP 507 km² and PHE
421 km².
2015 2016 2017 2018
Realization of 2C Resources in 2018 was 794.31
Additional P1 oil and gas reserves recorded in 2018 MMBOE consisting of 270.19 MMBO crude oil
was 426.25 MMBOE. This figure was 36% higher and 3,036.63 BSCF natural gas. The 2C resources
than the P1 oil and gas reserves in 2017. Reserve contribution was from PEP 71 MMBOE, PHE 195
Replacement Ratio (RRR) for oil and gas was 137.81%. MMBOE, and PHI 529 MMBO.
This 2018 RRR was lower than the 2017 RRR of
143%. The additional oil and gas reserves in 2018 In August 2018, PT Pertamina EP through exploration
mostly came from inorganic activities through the activities in Sumur Akasia Maju (AMJ)-001 well
operatorship of domestic oil and gas Working areas of succeeded in finding a new hydrocarbon resource
which the operatorship contracts have expired, such as of 11.45 MMBOE. This success was also obtained
Mahakam, Sanga-Sanga, Attaka, and East Kalimantan from other drilling activities executed by PT Pertamina
Working Areas. EP, including Titanum (TTN) -001 well, Pinus Harum
Additional Proven (P1) Oil and Gas Reserves (MMBOE) (PHR)-001 well, and Wolai (WOL)-001 well. While PT
PHE also succeeded in finding hydrocarbon resources
from the drilling activities in N-7, SES-1, Kumis-2 and
500 426
KKX-1 wells. The drilling of the wells also aims to prove
400 314 the new prospects of exploration activities which will
300 227 eventually be able to help increase PT Pertamina's
200 production. This is testament to PT Pertamina's
100 commitment to maintaining national oil and gas
production sustainability by continuously carrying
0
2016 2017 2018 out exploration activities while other oil and gas
companies operating in Indonesia have halted their
Pertamina Hulu Mahakam (PHM) in 2018 completed exploration activities due to declining world oil prices.
58 drilling wells, 73 well Workovers, and 6,671 well
services. PHM’s crude oil production until December With a view to support sustainable exploration
2018 was 35.2 MBOPD and natural gas production activities, in addition to drilling activities, studies
was 879 MMSCFD. The acquisition of Mahakam were also conducted to find and or finalize a new
Block contributed additional 2C oil resources of 51.33 play concept, especially in the frontier areas. The
MMBO and 2C gas resources of 1265.01 BSCF or a studies were conducted by involving all personnel
total of 2C oil and gas resources equivalent to 269.67 in Pertamina's Upstream Subsidiaries, including a
MMBOE. In addition, it also added P1 oil reserves of study aimed at seeing the development opportunity
22.77 MMBO & P1 gas reserves of 794.58 BSCF or a of the Pre-Tertiary Play in Salawati Basin Papua,
total of additional P1 oil and gas reserves equivalent to and Delta Study in East-North Kalimantan Basin to
159.91 MMBOE. The challenge facing PHM was the seek exploration opportunity using Mahakam delta
highly declining production rate of 57%. This figure was analogues.
8% above the Corporate Budget Plan assumption. This
was because some existing wells experienced significant
water breakthough and pressure declining.
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Upstream Business Development

Pertamina seeks to increase the growth of oil and of several Working Areas in Indonesia are expired
gas and geothermal reserves, production and in 2018, 2019 and 2021, and this provides a good
lifting in order to maintain national energy security opportunity for Pertamina to develop its portfolio
by conducting aggressive, selective and proactive and increase oil and gas production and reserves,
expansion activities through inorganic business especially in Indonesia.
development activities throughout 2018. The contracts
August 9, 2021 February 11, 2019 July 7, 2019 August 8, 2018 October 25, 2018
May 20, 2018 October 16, 2020
May 20, 2018t April 23, 2020
September 6, 2018 May 20, 2018 January 1, 2018 October 6, 2018
Transfer of Working Area Operatorship for 2018-2021 period to Pertamina
In 2018 Pertamina has succeeded in securing 13 Working Area to be effective in 2021, namely Rokan
Ex-Terminated Working Areas expired in 2018-2021. Working Area, the largest national oil producer where
The number of Working Areas effectively managed by currently Pertamina and the Government are preparing
Pertamina in 2018 was 8 consisting of Ogan Komering, a cooperation contract under gross split scheme. On
Tuban, Sanga-Sanga, South East Sumatra, North Sumatra January 1, 2018 Pertamina has commenced the
Offshore, Tengah (included in Mahakam Working Area), operation of Mahakam Working Area, of which the right
Attaka and East Kalimantan. There are 2 Working Areas to operate was handed over to Pertamina in 2015.
that will be effective in 2019, namely Raja Working
Area and Jambi Merang Working Area. Two Working The Indonesian Government has also appointed
Areas will be effective in 2020, namely Kepala Burung Pertamina as the winner in the bid of Oil and Gas
Working Area and Salawati Working Area. There is 1 Exploration in Maratua Working Area.
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Prospects for the Upstream Sector from old fields. There is a necessity to continue the
The future challenge in the upstream oil and gas efforts to boost production of old wells, or at least to
sector in general is the effort to contribute to reducing maintain the old wells’ production rate or minimize
dependence on crude oil imports. The need for the old wells’ natural declining process. Exploration
domestic fuel oil continues to increase by around 13% activities to find new sources of giant oil and gas
per year. This means that the need for oil supply is also reserves need to be improved by utilizing the latest
increasing, which indicates that the upstream oil and technology with a high degree of accuracy.
gas business is still very attractive. However, it should
be noted that the recent oil and gas prices tend to Some issues that need to be taken into consideration
fluctuate and are low, which somewhat hampers the with regard to future development of the upstream oil
interest in upstream sector investment. and gas business include some interrelated global
issues. The 4.0 industrial revolution is marked by the
The increasing comsumption need for domestic oil increasingly widespread use of digital technology that
and gas still cannot be met with the current increase encourages automation in all walks of life as well as
in domestic production. As a result, Indonesia is rapid data exchange in business activities. This also
getting more dependent on oil imports. For this reason, affects changes rapdly, or known as disruption to
elevating domestic oil and gas production is an the consumption patterns of the millennials who were
absolute requirement to be continued, either through born and have grown up in the digital age. The future
the discovery of new giant oil fields or by optimizing trends of energy use will also be influenced by the
the production of existing mature fields by enhancing comsumption trends of this generation. Another thing
the realibility of production equipment and facilities, that affects the trend of energy consumption is the
IOR, EOR, and the application of appropriate reservoir effort to reduce carbon emissions through increased
management. utilization of renewable energy and use of non-carbon
based energy equipment or vehicles.
It can be said that the overseas blocks where Pertamina
has operational and equity participation through PIEP, The growth of the use of electric vehicles in the world
on the one hand, have the potential to increase revenue should also be taken into account. This has the potential
and crude oil supply sources to domestic refineries. to reduce the use of fuel oil in the future. As we know,
However, on the other hand, there is a challenge about the transportation sector is the largest consumer of fuel
how far Pertamina can play a more active role and oil in Indonesia.
become more involved in the operational activities of
the overseas oil and gas fields. The purpose is to further However, so far Pertamina has been quite consistent in
improve operating performance comprising efficiency, preparing for all the possibilities that will occur in the
reliability, and project execution capability. future trends of energy use. The consistent production of
eco-friendly energy from geothermal energy through PT
Oil and gas blocks of which the contracts are PGE is a good stepping stone and at the same time a
already expired and the rights to operate are already preparation for Pertamina to enter into the eco-friendly
transferred by the Government to Pertamina certainly energy business.
have the potential for additional oil and gas reserves
and production. However, this also has a challenge
related to the natural decline of oil and gas production
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REFINERY SECTOR AND REFINERY DEVELOPMENT
Performance and Refinery Highlight 2. Petrochemical Refinery Operation, consisting

At present Pertamina owns 6 Refinery units consisting of the Paraxylene Refinery at RU IV Cilacap
of Refinery Unit (RU) II Dumai, RU III Plaju, RU IV producing Paraxylene and Benzene and other
Cilacap, RU V Balikpapan, RU VI Balongan, and RU products, the Polypropylene Refinery in RU III Plaju
VII Kasim with total installed refinery capacity of 1,031 producing Polytam (Polypropylene Pertamina),
MBOPD, or approximately 90% of the existing refinery and the OCU (Olefien Convertion Unit) in RU VI
capacity in Indonesia. Balongan producing Propylene
3. Operation of the Lube Base Refinery in RU IV
The operations of these refineries are as follows: Cilacap producing Lube Base HVI-60, HVI-95,
1. Operation of Fuel Refinery, consisting of the HVI-160, HVI650, Paraffinic, Slack Wax, Minarex
Refinery RU II R to RU VII, which produces Fuel, and Asphalt.
Non-Fuel, and other products.
SPECIFICATION OF PERTAMINA REFINERY UNITS

RU V
RU II RU III RU IV RU VI Ba- RU VII
Specification Balikpa-
Dumai Plaju Cilacap longan Kasim
pan
170 118 348 260 125

Capacity 10 MBOPD
MBOPD MBOPD MBOPD MBOPD MBOPD
NCI 7.5 3.1 6 3.3 11.9 2.4
PERTAMINA’S REFINERY DEVELOPMENT PROJECT

RDMP RDMP RDMP RU RDMP RU
NGRR NGRR
Specification RU II RU IV V Balik- VI Balon-
Tuban Bontang
Dumai Cilacap papan gan
300 400 360 269 300 300

Capacity
MBOPD MBOPD MBOPD MBOPD MBOPD MBOPD
NCI 9 9 9 11.9 9 9
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In line with the aspiration of realizing national energy Refinery Material Upgrade for Crude
security, Pertamina is obliged to secure the supply Refinery Flexibility
and fulfill the demand for domestic fuel. To realize this To overcome limited availability of imported super
aspiration, Pertamina has taken a number of strategic heavy crude at refineries due to high sulfur content
efforts, including optimizing the Residual Fluid Catalytic (the sour crude oil type), the Company has upgraded
Cracking (RFCC) units in RU IV Cilacap and optimizing refinery materials to increase the sour crude processing
the Residue Catalytic Cracking (RCC) units in RUVI flexibility. The refinery material upgrade is executed in
Balongan. Pertamina has also operated the Trans Pacific stages, started in 2018 at RU VI Balongan and then
Petrochemical Indotama (TPPI) refinery in Tuban. Another continued in 2019 at RU V Balikpapan and RU IV
effort to improve performance is by revamping and Cilacap.
upgrading the existing RU and continuously seeking new
refineries in line with the Company's plans. Integration of PLN Power with RU IV
Cilacap Power
In 2018, Pertamina launched a strategic work plan called So far, most of Fuel Oil and Fuel Gas Refineries
the 8 Pillars of Pertamina's Strategic Priorities program consumes fuel gas and fuel oil resulted from crude
with one of the focuses is towards the world class refinery processing at the refineries. As part of the efficiency in
through 5 aspects, namely Safety & Environmental, the use of the refinery fuel oil and fuel gas, Pertamina
Reliability, Profitability, Quality and Sustainability. This has been collaborating with PT PLN to outsource
work program is a reference for all Refinery Units in electric power of 30 MW from PLN to RU IV Cilacap.
carrying out their business processes. It is expected that the integration can be utilized in
mid-2019.
OPTIMIZATION AND PERFORMANCE
EFFICIENCY Inter-Refinery Optimization of
Intermediate Products
To fulfill the demand for domestic fuel, Pertamina must Intermediate Products are products that might require
be able to ensure that its refinery units’ production can further processing and have a low selling value.
run optimally. For this reason, Pertamina has made a To increase refinery margin and minimize these
range of refinery optimization efforts while continuing products, inter-refinery optimization is carried out by
to prioritize the refinery performance efficiency on an reprocessing them to become products with higher
ongoing basis in oder to improve Pertamina's refinery selling value (valuable products).
performance. The efforts taken by Pertamina include:
INVESTMENT AND DEVELOPMENT
Refining optimization for PSC contractor's
Domestic Crude In 2018, a number of investment and development
In 2018, Pertamina conducted domestic crude refining projects in the refinery sector were started or being
optimization. This was intended to reduce the processing prepared, to name a few:
of imported crude at refineries, in accordance with 1. JV Calciner (Dumai)
government directives through the Energy and Mineral The project for the construction of calciner and
Resources Ministerial Regulation No. 42 Year 2018 bending coke facility in Dumai through a strategic
on Priority to Utilization of Crude Oil for Fulfillment of partnership to process 300 KTA Green Fuel
Domestic Demand. This effort was fruitful with an increase Coke (GFC) in Dumai with an addition of 100
in domestic crude processing to 62% while in 2017 was KTA imported GPC to become 300 KTA Anode
58%. Grade Calcined Fuel Coke (CFC) using Shaft Kiln
technology. Currently, the project is in the phase of
engineering study and licensing.
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2. RU III Plaju Open Access Data on the percentage of comparison between

The project aims to increase refinery flexibility in refinery inputs and outputs in the last 5 years is
processing crude. Crude supply through pipelines presented in the following diagram:
to RU III Plaju continues to decline, while crude
supply transported by ship is constrained by silted Table & Chart: Percentage of Refinery Output - Input
points along the Musi river shipping channel. With Million
2018 2017 2016 2015 2014
this open access, Refinery RU III Plaju can optimize bbl
its production capacity to help fulfill the fuel supply % Yield

95 95 94 95 94
Total
in the Western Indonesia region.
95 95 95
2018 PERFORMANCE
94 94
In 2018, realization of the consolidated processing

(total intake) was 3.8% or higher than realization in the
same period of 2017.
Table: Realization of Refinery Operations in 2018 2014 2015 2016 2017 2018
compared to the 2018 Target and 2016-2017 Realization

Refinery Meanwhile, yield of valuable products in 2018
Unit 2018 2017 2016
Processing was 79.57% or higher than that in 2017 as much
Crude Oil, as 78.13%. Valuable Products consist of Premium,
Gas &
MMbbl 337 324 328 Pertalite, Pertamax, Pertamax Plus / Pertamax Turbo,
Intermedia
Processing Kerosene, Avtur, Solar, Dexlite, Pertadex, Paraxylene
Fuel and Benzene.
Production
Volume MMbbl 279 263 255
Tables & Charts: Percentage of Valuable Product -
(10 Main
Products) Refinery Input
Non-Fuel Million
2018 2017 2016 2015 2014
Production bbl
Volume (Pet-
MMbbl 29 29 20 % Yield
rochemical,
Solvent and Valuable 80 78 77 76 73
NBBM) Product*
80
77 78
Yield of refinery output (the ratio of total refinery 76
output to total intake) in 2018 decreased compared to
73
the previous year, from 94.69% in 2017 to 94.44%
in 2018. The decrease was due to adjustments to
downstream optimization and some operating unit
constraints. 2014 2015 2016 2017 2018
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HIGHLIGHTS OF REFINERY DEVELOPMENT
Pertamina currently manages projects of massive scale Based on the roadmap of increasing the capacity of
in the refinery sector with a view to increase refinery Pertamina refineries, the fuel production target after
capacity while supporting business development in the completion of RFCC, PLBC, RDMP and New GRR
the Pertamina petrochemical business. In October projects will be 2 million bpd by 2025. The realization
2016, Pertamina formed the Directorate of Refinery of this project will mean the liberation of Indonesia
and Petrochemicals Mega Projects (MP2) focusing from a dependence on fuel imports and produce
on addressing the mega projects which consist of the significant revenues and contribution to the state in the
revitalization program of existing refineries (Residual form of foreign currencies. In addition, the construction
Fuel Catalytic Cracking/RFCC Cilacap projects, of a new oil refinery also has the potential to expand
Project Blue Sky Cilacap/PLBC, and Project Refinery the Indonesian economy through the creation of added
Development Master Plan/RDMP at Balikpapan, value in the downstream sector by integrating oil
Cilacap, Dumai and Balongan refineries, and the refineries with petrochemicals.
construction of new refinery (Grass Root Refinery/
GRR).
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MARKETING SECTOR
Pertamina runs its business in two segments that have infrastructure ranging from Fuel tank trucks, skid tanks,
very different characteristics, namely the retail segment depots, ports and ships. Thus, energy is distributed
and the corporate segment. Therefore, Pertamina throughout Indonesia smoothly.
products are marketed through two main functions,
namely Retail Marketing and Corporate Marketing. Retail marketing activities are carried out directly or
Retail Marketing sells fuel products in the transportation through dealers (dealership system). Pertamina markets
sector, lubricant and LPG for households and non- retail fuel for the transportation sector, households
households, both subsidized products and non- and fishermen through Gas Station spread throughout
subsidized products. Meanwhile, Corporate Marketing Indonesia. Until 2019, the number of Pertamina
sells fuel products in various industrial sectors, aviation, channeling institutions was 7,146 spread throughout
and shipping, and other non-fuel products such as Indonesia, both Regular SPBU, mini gas stations,
asphalt and petrochemicals for the industrial sector. modular, and gas station for Fishermen.
The two main functions are supported by reliable
Specification Regular Gas Station Specification Mini Gas Station

Permanent Public Filling Station • Permanent
• Minimum 1,400 m2 • 500 - 700 m2 Total units: 147
• Minimum 2 pump • 1 pump island
islands & a maximum of 2
• Urban areas dispenser pumps
• Rural & suburban
areas
Total
units: 5,600
Specification Specification Compact Gas Station

Modular Gas Stations
• Semi Permanent •Semi Permanent
Public Filling Station • 200 - 500 m2
• Minimum 200 m2
• At least has 1 tank
Specification • At least drum with Total units:
minimum dose
& modular dispenser • 3T (Frontier, 508
• Urban and Outermost, Remote)
suburban areas areas and rural areas
Total units:
103
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Specification Diesel filling station Specification Gasoline & Diesel

Permanent for fishermen •Permanent Distributor
• 400 m2 • 3T areas
• At least has 1 & rural areas
dispenser pump
and 2 nozzles Total units:
• Fisherman’s centers
& fisheries business 93
centers
Total units:
111
Specification Gas station for public & Specification Subsidized Kerosene

• Permanent fishermen • Distributed to base Agent
• Fisherman’s centers • Regions that
& fisheries business have not been
centers converted to LPG
Total
Total units:
units: 406
382
To maintain service standards at Pertamina gas Special Assignment). While Pertalite (Mogas RON
stations, Pertamina through “Pertamina Way” program 90), Pertamax (Mogas RON 92), Pertamax Turbo
has developed “SPBU Pasti Pas” program through (Mogas RON 98), Dexlite (CN 51), Pertamina Dex
Audit assessment in the form of trained staff, Facilities (CN 53) are marketed as General Types of Oil-
and Equipment, Products and Additional Services, based Fuels (Types of General Fuel). In addition to
Physical Formats, and Quality-Quantities. fuel products, Pertamina also markets domestic gas
products. Since 1968, Pertamina has committed to
Then, in 2016, Pertamina started to develop an serving all Indonesian people by providing LPG and
excellent service program in the form of “Pasti Prima” Gas Products as raw materials and fuels for household,
program. The development of “Pasti Prima” program transportation, commercial and industrial purposes.
consists of 5 (five) main pillars, namely “Energi LPG is increasingly recognized by the public with the
Terintegrasi” (Integrated Energy, other product of Government’s conversion program of Kerosene to LPG
Pertamina), a convenient and complete Non Fuel Retail which is more economical, efficient and eco- friendly.
business line, efficient and friendly service, modern
Marketing (digital and loyalty), and well-managed Going further, Pertamina continues to develop domestic
public facilities. With Pasti Prima Program, consumers gas product variants to improve services and meet the
will get new experiences, especially digital services, demand of today's society. Pertamina's domestic gas
which are adjusted to the current lifestyle that is products currently include LPG products for household
implemented in the gas station areas. cooking needs, namely ELPIJI 12 kg, Bright Gas 5.5
kg, Bright Gas 12 kg, LPG products for commercial
In 2018, fuel products distributed retail included include ELPIJI 50 kg, and ELPIJI Bulk, other LPG
Certain Types of Oil-based Fuels (Specific Types derivative gas products including Bright Gas Can
of Fuel) in the form of Kerosene and Solar (Diesel) (canned LPG packaging), HAP (Hydrocarbon Aerosol
products. Premium gasoline is distributed as Types Propellant) products, Musicool (refrigerant), and Vi-Gas
of Fuels for Special Assignment (Fuel Type Specific LPG fuel for vehicles.
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ONE PRICE POLICY
Pertamina gets an assignment from

the Government to realize One
Price Policy in Indonesia. Until the
end of 2018, nationwide Pertamina
has realized the One Price Policy
operation and operation trial
in One Price Policy Distribution
Agencies at 125 points (55 points
in 2017 and 70 points in 2018)
in the 3T (Frontier, Outermost and
Remote) areas. With the existence
of these gas stations, now the
people in these areas can buy
Premium and Solar at the same
price as people in other regions
who have enjoyed prices according
to Presidential Regulation No. 191
Year 2014, where Premium is Rp
6,450/liter, and Solar isRp5,150/
liter.
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PRIME SERVICES IN FESTIVE DAYS NON RETAIL MARKETING
To ensure safe distribution of fuel during the festive Avtur

days of Eid Al-Fitr, the Christmas and New Year, in Rapid development of the aviation industry both
2018 Pertamina conducted Satgas RAFI (Ramadhan in Indonesia and in the world is an opportunity for
Eid Al-Fitr) and Satgas Naru (Natal Tahun Baru) Pertamina. With its capacity, Pertamina is able to
which provided additional services for the people provide services and meet the demand of airlines.
celebrating Eid Al-Fitr, Christmas and New Year in the Pertamina has aviation fuel products, both Jet A-1 and
form of Kiosk Pertamax, Serambi Pertamax, and Motor aviation gasoline.
Kemasan with sales realization of 2.147 KL Pertamax
- 183 KL Dexlite (during RAFI) and 973 KL Pertamax Pertamina uses the brand “Avtur” for its A-1 jet
–114 KL Dexlite (during NARU 2018). products sold to domestic and foreign airlines at
domestic airports. Avtur filling in the country is carried
SERVICES IN DIGITAL ERA out through the Aviation Fuel Filling Terminal (DPPU)
spread in 8 Marketing Operation Regions (MOR).
To increase consumer loyalty in the digital era Whilefilling of A-1 jets at airports abroad is done by
which is predicted to be full of challenges in future, making reseller agreements with local partners.
Pertamina has MyPertamina program. MyPertamina
is Pertamina's cashless payment and also one stop Pertamina continues to expand its flight fueling network
digital service launched on December 20, 2017. In both at home and abroad. In 2018, Pertamina added
2018, MyPertamina continues to be developed, and it one DPPU at a new airport in the country. While the
currently not only can be used at gas stations, but also additional Avtur filling services abroad are mostly in
in Bright Stores and Bright Oli Marts. China.
Until the end of 2018, Pertamina's aircraft refueling

network has penetrated Europe, Australia, East Asia,
Southeast Asia, South Asia and the Middle East. The
majority of consumers served at these locations are
scheduled airlines. In addition to scheduled airline
customers, Pertamina also serves non-regular/ad-hoc
flights including presidential aircraft, VVIP, charter
flights and new aircraft delivery flight in various
locations around the world.
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On the commercial side, throughout 2018 Pertamina Industry & Marine Fuel
actively participated in biddings for the provision of In addition to marketing retail petroluem, Pertamina also
fuel for filling in various airports in the world as well markets fuel to the industrial and marine sectors on a
as working with local fuel suppliers through reseller large scale. Until now, Pertamina has more than 100,000
agreements. For fueling infrastructure, Pertamina consumers throughout Indonesia. Some of Pertamina
continues to modernize the reliability of aircraft consumers are PLN, TNI/POLRI, cooperation contractors,
refueling means and facilities, improve stock reliability, mining industry, paper industry, steel industry, plantations,
and integrate information system and operation service manufacturing and various other industries.
customization.
Petrochemicals
One of the non-Fuel products marketed by At present, the largest market segment is the electricity
Pertamina is Petrochemicals. The Petrochemicals segment/PLN. However, fuel demand from PLN tends to
products marketed include Bitumen, Paraxylene, decrease due to the policy of reducing the use of fuel by
Benzene, Propylene & Polypropylene, and other non- converting the energy to gas, coal and other renewable
fuel products such as Sulfur, Solvent, Rubber Processing energy (water, geothermal, etc).
Oil, Smooth Fluids, Fuel Coke, and Agricultural In the Marine sector, Pertamina markets fuel by focusing
Chemicals. on developing a network of fuel sales services in all
In 2018, realization of Petrochemical products sales vital ports within Indonesia. Fuel marketing in the
was relatively stable compared to sales in 2017, with marine sector is carried out through BUMN synergy and
a sales growth of around 4% in the last three years. cooperation with the private sector. In addition, Pertamina
also has enormous potential to expand overseas,
Market demand for petrochemical products still has especially due to the support from Government's policy
the potential to increase. Therefore, in its marketing granting exemption from VAT in Indonesia for ocean
activities, Pertamina not only conduct marketing of its going ships. In addition, Pertamina can also utilize
refinery products, but also trading activities to meet the shipping lines that pass through Indonesian waters (such
market demand in Indonesia, in particular for Bitumen, as Australia-Japan/Korea/China) to become a significant
Benzene, Paraxylene and Sulfur products which potential to increase the volume of the bunker sector.
contribute to sales volume of 550 thousand MT or
about 22% of the total sales of petrochemical products. In marketing fuel to the industrial and marine sectors,
Pertamina has various advantages. Pertamina guarantees
In 2018, Pertamina developed the market by the availability of fuel supplies supported by seven
penetrating the export markets, among others: domestic refineries, more than 115 fuel terminals,
Malaysia, China, India, and Europe. The main product complete land and sea transportation facilities spread
sold to the export markets was Green Coke Slack throughout Indonesia. The quality and quantity of
Wax, EXDO-4 with sales volume of 275 thousand Pertamina fuel is guaranteed by the Director General of
MT. Additionally, Pertamina was also focused on Oil and Gas and international standards.
planning the development of supply point infrastructure
for Bitumen products, and the market penetration of The key to Pertamina's success in the globalization era
Smooth Fluid and non-carcinogenic EXDO-4 products, competition lies in a long-term partnership dedicated
which are more eco-friendly to the domestic market. to meeting consumer needs, which is realized through,
among other things, after sales services in the form of
Vendor Held Stock services as well as reliable Technical
Support & Safety Advisor with a view to provide total
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solution energy to customers by carrying "We Bring Gas Operation Performance

Energy Solution" tagline. To complement its product In the downstream segment of gas, Pertamina's
portfolio to fulfill consumer demand for energy, Industrial business includes gas sales (pipeline), gas
Fuel Marketing has been implementing integrated transportation, regasification and CNG transportation
primary and secondary energy marketing in the form sales. In addition, Pertamina also acts as a seller of
of Fuel, Gas to the provision of secondary energy in the pipeline gas and LNG. For gas pipelines, Pertamina
form of electricity through a synergy with subsidiaries. serves both industrial customers, power plants (PLN)
and households (city gas). With the joining of PT
Customer demands are increasingly high with the PGN Tbk. (PGN) to Pertamina, PGN and Pertagas
tendency to procure fuel through a tender system and infrastructure are integrated, and PGN will manage the
multi-supplier policies to ensure fair competition in the domestic downstream gas business.
supply of logistics needed by consumers. Pertamina
answers the challenge by providing competitive prices, In the downstream gas business, gas sales volume in
reliable supply availability, credit services/term of 2018 rose by 36% compared to the previous year.
payment (TOP) with competitive time periods, and high While gas transportation volume rose by 55%
Domestic Component Index (TKDN). In 2018 Pertamina compared to the previous year. Significant increases in
still has a strong position in the domestic market with a both gas sales and transportation volumes were mainly
market share of over 70% for the industrial and marine due to PT Perusahaan Gas Negara Tbk. (PGN) has
fuel sectors. Pertamina's customer satisfaction, measured integrated with Pertamina.
annually through surveys to find out the Customer
Satisfaction Index (CSI) and Customer Loyalty Index (CLI),
in 2018 the survey results showed a value of 4.0 in the
Likert scale.
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Marketing Performance
In 2018, the sales of Fuel and Non-Fuel products grew by 5% and 1%

respectively compared to the previous year. This increase was contributed
by sales of Pertalite, Solar, Avtur and LPG products. While the downstream
gas business performance increased significantly with the joining of PGN.
The gas business in the future will focus on meeting Pertamina's refinery
needs as well as assigning sales of gas to both state gas pipelines and
LNG.
Sales of Fuel Products (Million KL) Non-Fuel Product Sales (Million KL)
70
67
16
65 16
15
2016 2017 2018 2016 2017 2018
Gas Sales (BBTU) Gas Transportation (BSCF)

1,222,632 777
823,769
708,684 502
522
2016 2017 2018 2016 2017 2018
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ANNUAL REPORT 2018
INFRASTRUCTURE SECTOR AND SUPPLY CHAIN OF MARKETING
In meeting the needs of energy, especially Fuel, Pertamina manages and operates infrastructure throughout
Indonesia.
• ± 500 LPG Bulk Filling Stations Marketing Infrastructure Development

• ± 60 Aviation Fuel Filling Terminals (DPPU) Breakthrough Project (BTP) of The Marketing
• ± 20 LPG Terminals Infrastructure Development Master Plan that has been
• > 1 Lube Oil Blending Plant (LOBP) prepared for the period of 2020, 2025 and 2030
• > 100 Fuel Terminals which is integrated with all long-term planning in the
• Managing of > 60 units of Owned Tanker and> Directorate of Marketing, Processing, Gas, and Finance
100 units of Chartered Tanker as well as ISC Functions covering strategic projects
• > 5,500 Gas Stations and master plans of the infrastructure development as
• > 100 Pier follows:
• > 10 SPM (Single Point Mooring) 1. Construction and development of Fuel Terminals in
• > 5 STS locations (Ship to Ship) 5 locations (Region I, III, and V)
• ± 10 CBM (Conventional Buoy Mooring) 2. Replacement of Cikampek-Plumpang pipeline
• > 100 Light Ships which is targeted for completion in 2019-
• ± 2 Bitumen Plant 2020 and the development of CB II of Lomanis
• ± 2 Chemical Storage Plants Tasikmalaya and CB II of Lomanis-Rewulu pipelines.
• > 30 Gas Filling Stations (SPBGs) 3. Relocation of Sultan Hasanudin DPPU in Makassar,
Sultan Thaha in Jambi, Sepinggan in Balikpapan,
DEO in Sorong, Supadio in Pontianak, Ahmad
Yani in Semarang and Mutiara in Palu (under
construction) and the construction of DPPU Kertajati
in Majalengka.
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SECURING ENERGY
4. Construction and Development of LPG terminals: Shipping Business

a. Construction of Pressurized LPG Tank in LPG Until the end of 2018, Pertamina managed 67 of its own
Terminal of Region I. fleets with the entry of a new fleet namely MT Pasaman on
b. Construction of Pressurized LPG Tank in LPG April 27, 2018 and 200 charter ships to transport internal
Terminal of Region III. cargo. Pertamina's shipping’s fleet will add 4 new ships
c. Construction of Pressurized LPG Tank in LPG which are currently in the process of development where
Terminal of Region IV. the addition of the new fleet is to strengthen the distribution
d. Construction of LPG Terminal of Pressurized of domestic White Oil.
LPG Tank in Region I.
Table 1 - Number of Pertamina-Owned Ships
5. Construction and Development of LPG Terminals in
Eastern Indonesia: Ship Type DWT Unit
Based on Decree of Energy and Mineral Resources Bulk Lighter 1.642 1
Minister No. 2157 K / 10 / MEM / 2017
Small I 38.762 11
dated May 31, 2017 concerning Assignment to
Small II 85.812 13
PT Pertamina (Persero) in the Construction and
Operation of the Fuel and LPG Storage Tank, with General Purpose 189.176 11
the location specified in Annex I of the ESDM Medium Range 450.878 13

Minister Decree covering 14 locations in NTB, NTT, Large Range 822.997 9
South Sulawesi, Maluku, North Maluku and Papua,
Small LPG 14.138 5
Pertamina has gradually begun development in
Midsize LPG 34.800 2
Nusa Tenggara and Papua.
6. Current projects: Very Large Gas
109.254 2
Carrier
a. Development of DPPU in Region III to serve
Total 1.747.459 67
aviation refuelling at West Java International
Airport (BIJB).
b. Construction of Refrigerated LPG Tank in LPG In line with the government's commitment since 2017,
Terminal of West Java to replace / land STS. Pertamina has an active role in the SOE synergy with
c. Construction of LPG Pressurized Tank in the signing of a cooperation agreement between
Region V. Pertamina and NSHI (National Shipbuilding & Heavy
d. Construction of Pressurized LPG Tank in LPG Industries). Pertamina also contributes to advancing the
Terminal of Region I. national maritime sector consistently and maintaining
e. Construction of Pressurized LPG Tank in LPG compliance with the cabotage principle by requiring its
Terminal of Region II. fleet operating in Indonesia to use the Indonesian flag
f. Development of fuel terminal in Region IV. and empower Indonesian crew.
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ANNUAL REPORT 2018
In addition to ensuring cargo transportation to all corners As a first step in an effort to realize PT PIS's vision
of Indonesia, the distribution needs to be supported by the "To be the Choice of a World Class Company", PT
marine services in each port visited. Currently there are PIS focuses on FOB cargo transportation activities,
107 ports managed by Pertamina, which consist of 46 charter out 4 (four) MR ship units and 1 (one) FSO
Special Terminals (Tersus) and 61 Terminals for Self-interest unit and optimization of internal cargo, among
(TUKS) of Pertamina. Marine also manages 169 docks, others, fulfilling the critical organizational needs
13 Single Point Mooring (SPM), 7 locations for ship to of the company, supporting Pertamina shipping
ship (STS) transfers, 11 Central Buoy Mooring (CBM) / activities, managing import transportation and ISC
Multiple Buoy Mooring (MBM), and 2 Island Berth. third party trading, managing sea transportation and
floating storage, hiring qualified ship management
In line with the launching of 8 Priority Pillars of and exploring the expansion of the LNG ship market.
Pertamina's Strategy to support its vision as a With the contract on the volume of product import
"World-Class Energy Company". Pertamina has 8 cargo transportation with ISC Pertamina, it provides
shipping strategic priorities, namely safety operations, space to grow in terms of assets and profitability.
environmental compliance, ships & port reliability,
shipping costs, ship performance, ship ownership, Until the end of 2018, with the inclusion of one new
service excellence, and manpower. PT PIS fleet, namely MT PIS Pioneer on March 30,
2018, the fleet managed by PT PIS became 6 owned
Pertamina implemented operational excellence for its ships and it required approximately 38 chartered
property and terminal with the implementation of TMSA ships to transport ISC imported cargo. PT PIS fleet
(Tanker Management & Self-Assessment) which currently will add 2 new ships in 2020 which are currently in
has a score of 2.81 and the achievement of SIRE (Ship the process of development at Japan Marine United
Inspection Report) of 23 units of owned ships. This Corporation (JMUC), where the new fleet is added to
implementation is needed for ships that will trade as strengthen PT PIS's crude oil transportation portfolio.
a prerequisite for anchoring in international oil ports.
Followed by the implementation of the MTMSA (Marine In 2018, PT PIS has been running the business of
Management Self-Assessment) which is currently being product import cargo transportation services and
implemented to 2 terminal units, namely Bau-Bau developing the company's business by adding
Terminal and Cilacap Terminal. The same thing is also crude import cargo transportation services as well
done by Vetting Inspection, with the passing/initial as penetration of third party cargo transportation
grading changes for medium risk from 2017 by 60% to services.
65% in 2018.
PT PIS has established a subsidiary in Singapore
In 2018, Shipping also succeeded in renewing the ISO under the name Pertamina International Shipping Pte.
9001: 2015 certificate, achieving ISM Compliance at Ltd. The company is a shipping arm of PT PIS which
100%, complying with MARPOL, and the scale of low will be engaged in supporting Pertamina's import
risk owned ships increased from 25 to 30 ships. transportation and penetrating the international
third-party cargo market by starting operations in
PT Pertamina International Shipping (PT PIS) Singapore as one of the largest hubs in the world.
PT Pertamina International Shipping (PT PIS) was PIS Pte Ltd will also be a place for laying ship assets
established based on Deed No. 37 dated December through Special Purpose Vehicle (SPV) as an effort to
23, 2016 made before Notary Lenny Janis Ishak, mitigate risks in accordance with best international
SH in Jakarta with equity participation of USD 10 shipping practices and efforts to gain investment
Million, plus 4 (four) MR ship units and 1 (one) funding.
unit Floating Storage Offloading (FSO), namely MT
Fastron, MT Sungai Gerong, MT Sambu, MT Sei
Pakning and FSO Pertamina Abherka through a spin-
off mechanism in 2017.
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FINANCIAL PERFORMANCE REVIEW

STATEMENT OF INCOME
Sales and Other Operating Revenues

Sales and other operating revenues are derived from 2. Reimbursement of subsidy costs from the
domestic sales of crude oil, natural gas, geothermal Government totalling USD 5,632 million or 9.72%
energy and fuel products, reimbursement of subsidy of total sales and other operating revenues
costs from the Government, export sales of crude 3. The export sales of crude oil, natural gas and oil
oil, natural gas and fuel products, remuneration of products totalling USD 3,637 million or 6.28% of
marketing services and operating revenues from other total sales and other operating revenues
operating activities. 4. Marketing services remuneration totalling USD 15
million or 0.03% of total sales and other operating
In 2018, sales and other operating revenues amounted revenues
to USD 57,934 million or 25.94% higher as compared 5. Operating revenues from other operating activities
to that of 2017 amounting to USD 46,000 million. The totalling USD 3,906 million or 6.74% of total sales
2018 achievements were contributed by: and other operating revenues.
1. Domestic sales of crude oil, natural gas,
geothermal energy and oil products totalling USD
44,743 million or 77.23% of total sales and other
operating revenues
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Table: Sales and Other Operating Income (In million USD)

Achievement
YoY
of Corporate 2018
Description 2018 2018 2017* 2016* 2015** 2014**
Budget Plan Plan
%
(%)
Domestic sales of
crude oil, natural gas,
107.17 12.45 41,748 44,743 39,789 35,842 36,560 44,587
geothermal energy and
oil products
Reimbursement of
subsidy costs from the 106.08 57.67 5,309 5,632 3,572 2,569 3,187 17,857
Government
Export sales of crude

oil, natural gas and oil 98.48 94.08 3,693 3,637 1,874 968 1,270 6,707
products
Marketing services
136.36 -40.00 11 15 25 (257) 23 99
remuneration
Operating revenues from

147.12 427.83 2,655 3,906 740 690 723 746
other operating activities
Total Sales and Other

108.46 25.94 53,416 57,934 46,001 39,812 41,763 69,996
Operating Income
The upsurge in sales and other operating income in 2018 were In 2018, the reimbursement of subsidy costs from the
mainly influenced by the increase in domestic sales of crude Government amounted to USD 5,632 million, up 57.67% as
oil, natural gas, geothermal energy and oil products. Domestic compared to 2017 amounting to USD 3,572 million.
sales of crude oil, natural gas, geothermal energy and oil
products, totalling USD 44,743 million, up 12.45% over the The increase was influenced by:
2017 acheivement of USD 36,789 million. The driving factor • A hike in CP Aramco’s average price to USD 540/MT in
causing this increase was a higher than average selling price 2017 compared to 2017 at USD 487/MT. Along with the
due to higher selling prices of products affected ICP actual price hike in CP Aramco’s price, the sales volume of the LPG 3
and higher sales quantity in 2018 as compared to 2017. The kg Refill PSO also increased. The sales volume of LPG 3 kg
average price of the ICP in 2018 achieved USD 67.47/barrel Refill in 2018 was 6.55 million MT or up 4% compared to
while in 2017 it was USD 51.17/barrel. The average price of the 2017 sales volume of 6.31 million MT.
MOPS PSA in 2018 was USD 81.71/barrel while in 2017 it • Diesel/Biodiesel PSO sales volume in 2018 was 15.36
was USD 64,78/barrel. million KL or rose 7.2% from 14.33 million KL in 2017.
Another factor causing the increase in domestic sales of crude The export sales of crude oil, natural gas and fuel products in
oil, natural gas, geothermal energy, and oil products in 2018 2018 amounted to USD 3,637 million or increased by 94.08%
was the increase in sales volume. The sales volume of oil compared to 2017 which amounting to USD 1,874 million.
products in 2018 achieved 88.72 million KL while in 2017 it The increase was influenced by an increase in the realization of
was 85.74 million KL. There was a significant increase in the average ICP and MOPS in 2018.
sales volume of General Fuel products, which achieved 17.75
million KL, or up 122% from 2016 at 5.86 million KL with the Marketing services remuneration was USD 15 million, a
increase in sales volume of 3.24 million KL. significant decrease as compared to the achievement in
2017 of USD 25 million. Marketing services remuneration is
a sales commission obtained by Pertamina in marketing the
Government’s crude oil, natural gas and LNG.
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Operating revenues from other operating activities amounted Expenses

to USD 3,906 million, a significant increase as compared to In 2018, the cost of goods sold and other direct expenses
2017 amounting to USD 740 million. Main factor causing the was USD 48,714 million or up 29.47% as compared to
increase was the enforcement of Presidential Regulation No 43 2017, which amounted to USD 37,625 million. These
Year 2018 leading to the adjustment of retail selling prices of expenses consist of cost of goods sold, upstream production
particular type of fuel oil and special assignment fuel. expenses and lifting, exploration expenses and expenses
from operational activities. The largest contribution came
from the increase in cost of goods sold.
Table: Expenses In million USD

Achieve-
ment of
YoY
Cor- 2018
Description 2018 2018 2017* 2016* 2015** 2014**
porate Plan
%
Budget
Plan (%)
Cost of Goods Sold 107.34 28.97 39,863 42,788 33,176 26,181 31,911 59,585
Upstream production and

91.57 28.24 4,791 4,387 3,421 3,270 3,072 2,842
lifting expenses
Exploration expenses 93.06 62.42 288 268 165 109 158 198
Expenses from other operating

97.77 47.39 1,301 1,272 863 703 648 722
activities
TOTAL COST OF SALES AND

105.34 29.47 46,243 48,714 37,625 30,263 35,790 63,347
OTHER DIRECT EXPENSES
Selling and Marketing

112.46 3.33 1,461 1,643 1,590 1,340 990 1,092
Expenses
General and Administrative

57.06 -16.82 2,331 1,330 1,599 1,509 1,061 1,119
Expense
The cost of goods sold in 2018 was USD 42,788 million or In 2018, the actual upstream and lifting production
up 28.97% as compared to 2017, which amounted to USD expenses achieved at USD 4,387 million or up 28.24%
33,176 million. The increase was mainly attributable to the from realization in 2016 which totaled USD 3,421 million.
increasing prices of raw material and imports of products The highest contribution was derived from depreciation and
that are affected by a rise in the ICP and published oil prices depletion expenses, which increased by USD 162 million
for 2018 as compared with the previous year. compared to 2017.
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The increase in depreciation and depletion expenses was In 2018, selling & marketing expenses and general &
mainly due to the existence of new entities PT Perusahaan administrative expenses decreased by 6.73% from USD
Gas Negara (PGN) and PT Pertamina Hulu Indonesia 3,189 million in 2017 to USD 2,973 million. This was
(PHI). On the other hand, contract charges also increased, mainly due to a decrease in general and administrative
amounting to USD 361 million compared to 2017. expenses amounting to USD 1,330 million or a decrease
by 16.82% from USD 1,599 million in 2017 due to the
The contract charges were mainly from the entity PT low realization of maintenance costs and other general cost
Pertamina Hulu Indonesia (PHI), which in 2018 managed components along with efforts in implementing company
four new subsidiaries, namely PT Pertamina Hulu Mahakam efficiency.
(PHM), Pertamina Hulu Attaka (PHA), Pertamina Hulu
Sangasanga (PHSS) and Pertamina Hulu Kalimantan Timur Profit for The Year
(PHKT). The high growth percentage of total sales and other
operating income of 25.94% compared to the previous year
Exploration costs in 2018 amounted to USD 268 million or resulted in a 20.42% increase in operating income to USD
increased by 62.23% from 2017 at USD 165 million. The 6,246 million in 2018 from USD 5,187 million in 2017.
rise in exploration costs was due to Pertamina’s efforts in The increase was derived from the downstream segment
pursuing new oil and gas reserves along with the increase of Pertamina impacted by the enforcement of Presidential
in lifting in 2018 amounting to 34,379 MBO while in 2017 Regulation No 43 Year 2018 leading to the adjustment of
amounted to 33,574 MBO. retail selling prices of particular type of fuel oil and special
assignment fuel.
Expenses from other operating activities increased by
47.39% or amounted to USD 1,272 million compared While cost of goods sold and other direct expenses
to the previous year amounting to USD863 million. The increased by 29.47% from the previous year, which was
increase was mainly attributable to Pertamina’s new mainly attributable to a hike in cost of goods sold in 2018
subsidiary operations in 2018 engaging in the shipping as an impact of the rise in the ICP in 2018 as compared to
sector, PT Pertamina International Shipping. While the 2017. The decrease in profit after income tax coupled with
development of PIS business operations comprises the increasing income tax expense, and higher price of crude
transportation services of Lube Base Oil and Additive oil compared to the previous year making profit for the year
owned by Pertamina Lubricants, the transportation services decreased compared to the previous year. Profit for the
of Asphalt owned by Petrokimia Pertamina, and STS year is operating income net of operating expenses of the
operations. Company. The Company’s profit for the year in 2018 was
USD 2.636 million, up 3.25% from 2017 amounting to
Operating expenses consist of selling and marketing USD 2.553 million.
expenses and also general & administrative expenses.
Table: Profit (Loss) In million USD

Achieve-
ment of
YoY
Cor- 2018
Description 2018 2018 2017* 2016* 2015** 2014**
porate Plan
%
Budget
Plan (%)
Operating Income 184.77 20.42 3,381 6,246 5,187 6,699 3,921 4,438
Net Profit Before Effects of Merg-

588.39 3.25 448 2,636 2,553 3,163 1,442 1,477
ing Entity’s Profit Adjustment
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Operating income in 2018 was USD 6,246 million, EBITDA

up 20.42% from 2017 amounting to USD 5,187 EBITDA for 2018 amounted to USD 9,204 million,
million. The increase was mainly due to the increase up 26.85% from 2017 amounting to USD 7,256
in sales and other operating revenues, most of which million, due to an increase in domestic sales of crude
came from domestic sales of crude oil, gas, geothermal oil, gas, geothermal energy, and oil products. On the
energy and oil products and other operating revenues. other hand, there is an increase in the realization of
Domestic sales of crude oil, gas, geothermal energy ICP and the published oil prices in 2018 compared
and oil products amounted to USD 44,742.51 million to the previous year which affected the cost of goods
or 112.5% of the 2017 realization of USD 39,788.78 sold and other direct expenses. The increase in the
million. realization of ICP caused a 158.2% increase in tax
expense of the upstream sector in 2018, while current
This is mainly due to the increasing quantity of sales tax in 2018 was USD 2,627 million and deferred tax
of Pertalite, Solar, Premium, Mixed LPG and non- was USD 386 million.
subsidized Fuel.
STATEMENT OF FINANCIAL POSITION
ASSETS
At the end of 2018, Pertamina's total assets were recorded at USD 64,718 million consisting of 35.78% current
assets and 64.22% non-current assets. The total assets increased by 12.67% compared to 2017 amounting to USD
57,439 million.
Table: Total Assets In million USD

Description (%) 2018 2017* 2016* 2015** 2014**
Current Assets 20.87 23,154 19,156 18,434

14,330 20,493
Non-Current Assets 8.57 41,564 38,283 35,542 31,189 30,203
Total Assets 12.67 64,718 57,439 53,976 45,519 50,696

Current Assets Non-Current Assets

Current assets are assets that are expected to provide Non-current assets are assets that are expected to
economic benefits in less than one year or less than provide economic benefits in more than one year. The
one operating cycle. Current assets in 2018 reached realization of total non-current assets in 2018 reached
USD 23,154 million, up 20.87% from total current USD 41,564 million, up 8.57% from 2017 amounting
assets in 2017 of USD 19,156 million.This was mainly to USD 38,283 million. This was mainly due to an
due to increases in cash and cash equivalents, trade increase in fixed assets, oil & gas and geothermal
receivables, due to from government, and inventories. properties, and due from the government. On the other
On the other hand there is a decrease in restricted hand, there is a decrease in long-term investments and
cash and short-term investments. prepaid taxes.
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LIABILITIES
At the end of 2018, Pertamina's total liabilities were recorded at USD 35,108 million consisting of 39.80%
short-term liabilities and 60.20% long-term liabilities. The total liabilities increased by 15.39% compared to 2017
amounting to USD 30,426 million.
Table: Total Liabilities In million USD

Description (%) 2018 2017* 2016* 2015** 2014**
Short-Term Liabilities 42.04 13,973 9,837 8,893 8,547 13,746
Long-Term Liabilities 2.65 21,135 20,589 19,838 17,497 18,135
Total Liabilities 15.39 35,108 30,426 28,731 26,044 31,881

Short-Term Liabilities Long-Term Liabilities

Short-term liabilities are liabilities which may be Long-term liabilities are liabilities that exceed one
expected to be repaid in the short term. Short-term accounting period. Long-term liabilities in 2018
liabilities in 2018 reached USD 13,973 million, up reached USD 2,135 million, up 2.65% compared to
42.04% compared to 2017 amounting to USD 9,837 2017 of USD 20,589 million. This was mainly due
million. This was mainly due to increases in short- to an increase in deferred tax liabilities and bonds
term loans, taxes payable, due from government, payable. On the other hand there is a decrease in
and accrued expenses. On the other hand there is a long-term liabilities and employee benefits liabilities.
decrease in trade payables and deferred revenues.
EQUITY
Total equity per December 31, 2018 was recorded at USD 29,610 million, up 9.61% from USD 27,013 million as
of December 31, 2017
Table: Equity In million USD

Description (%) 2018 2017* 2016* 2015** 2014**
Share Capital 13.76 15,267 13,420 13,420 9,868 9,869
Proforma of Government’s equity

participation in the framework of (100.00) - 1,804 1,801 - -
Oil and Gas Holding establishment
Capital Advances - - - - 3,552 -
Adjustment of equity account - - - - - (2,648)
Government contributed assests

40,012.00 401 1 1 1 1
pending final clarification of status
Other equity components 24.59 608 488 665 730 997
Retained Earnings 20.32 11,323 9,411 7,778 5,131 10,393
Difference in Transactions of Non-

- - - - - -
Controlling Interests
Non-Controlling Interests 6.46 2,011 1,889 1,579 193 203
Equity 9.61 29,610 27,013 25,244 19,475 18,815

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This increase was mainly due to the addition of share While in 2018 Pertamina signed the minutes of the
capital to USD 15,267 million or an increase by handover of the operation / use of State Property
13.76% compared to 2017 of USD 13,420 million. (BMN) in the form of a gas network and SPBG with
This realization shows a change due to the addition the Secretary General of the Directorate of Oil and
of the state equity participation of the Republic of Gas of the Ministry of Energy and Mineral Resources
Indonesia into the Share Capital of PT Pertamina as the power attorney holder of the use of budget /
(persero) originated from the transfer of all B series goods. The BMN's asset value is Rp 5.8 trillion, thus
shares owned by the State in to PT Perusahaan increasing the Government contributed assets pending
Gas Negara Tbk totaling 13,809,038,755 shares final clarification of status.
representing 56, 96% of PGN's total shares.
STATEMENT OF CASH FLOWS
In 2018, Pertamina registered a positive cash flow from operating activities, amounting to USD 3,169 million.
Investing activities contributed to a reduction in cash flows of USD 3,504 million, and cash flows used in financing
activities amounted to USD 3,269 million.
Table: Cash Flows In million USD

Description (%) 2018 2017* 2016* 2015** 2014**
Net cash flows generated from operating activities (22.27) 3,169 4,077 8,391 7,425 4,211
Net cash flows used in investing activities 47.29 (3,504) (2,379) (2,619) (3,363) (5,714)
Net cash flows generated from financing activities (265.77) 3,269 (1,972) (3,480) (4,431) 623
(Decrease) increase in net cash and cash equivalents (1.170,80) 2,934 (274) 2,292 (370) (880)
Effect of exchange rate changes on cash and cash

527.03 (232) (37) 21 (158) (57)
equivalents
Cash and cash equivalents balance at the

(4.63) 6,410 6,721 4,409 3,639 4,576
beginning of the year
Cash and cash equivalents at the end of the year 42.15 9,112 6,410 6,722 3,111 3,639
Cash flows from operating activities as a result of the increase in the average ICP price in
Net cash flows generated from operating activities 2018. On the other hand, the increase in the average
during 2018 were lower by USD 908 million ICP price in 2018 led to an increase in income of
compared to 2017. This was mainly due to an increase upstream entities and impacted on increasing payments
in cash payments to suppliers and to the government of corporate income taxes.
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Cash Flow from Investing Activities Cash Flow from Financing Activities
Net cash flows used in investing activities in 2018 Cash flow from financing activities in 2018 was higher
was higher by USD 1,125 million compared to 2017. by USD 5,241 million compared to 2017. This was
This was in line with the increase in fixed assets, oil, mainly due to the addition of cash from proceeds
gas and geothermal properties, and the additional from short-term loans (trust receipts) as a result of the
placements in long-term investments. increase in the average ICP price in 2018.

FINANCIAL RATIOS
2018
Financial Aspects Unit Target vs Realization
Target Realization
Return on Equity (ROE) % 2.08 13.21 11.13 535.1%
Return on Investment (ROI) % 10.29 15.66 5.37 52.2%
Rasio Kas/Cash Ratio % 44.23 66.83 22.60 51.1%
Rasio Lancar/Current Ratio % 170.17 165.71 (4.46) -2.6%
Periode Penagihan/Collection Period Day 54 50 (4) -6.8%
Perputaran Persediaan/Inventory Turn Over Day 63 40 (23) -36.8%
Total Asset Turn Over (TATO) % 88.40 99.23 10.83 12.3%
Total Equity (TMS) to Total Assets % 35.63 40.31 4.68 13.1%
Return on Equity (ROE) Current Ratio

Pertamina’s ROE Pertamina in 2018 was 13.21%, Pertamina's current ratio in 2018 reached 165.71%,
above the 2018 Corporate Budget Plan of 2.08%. below the 2018 Corporate Budget Plan of 170.17%.
Return on Equity (ROE) is one of the profitability ratios The current ratio is one of the liquidity ratios used by
used to measure a company's ability to generate profits the Company to measure how far current assets owned
from shareholders’ investment in the company. by the Company can be used to pay off short-term
liabilities.
Return on Investment (ROI)
Pertamina’s ROI in 2018 was 15,66%, above the Collection Period
2018 Corporate Budget Plan of 10.29%. Return on Pertamina's collection period in 2018 was 50 (fifty)
Investment (ROI) as comparison between EBITDA days or 4 (four) days faster compared to the collection
and capital employed is used to analyze the balance period in the 2018 Corporate Budget Plan of 54 (fifty
between earnings and the funds invested in the four) days.
company's operations.
Inventory Turnover
Cash Ratio Pertamina’s inventory turnover in 2018 was 40 (forty)
Pertamina's cash ratio in 2018 was 66.83%, above days, 23 (twenty three) days faster than the 2017
the 2018 Corporfate Budget Plan of 44.23%. The Corporate Budget Plan of 63 (sixty three) days. This
cash ratio is obtained by comparing cash and cash was mainly influenced by an increase in inventory
equivalents plus short-term investments with short-term value, which was attributable to an increase in the
liabilities. average ICP and Published Oil price, for the year
2018.
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Total Equity (TMS) to Total Assets

Total Asset Turn Over (TATO) TMS on Pertamina TA in 2018 was 40.31%, higher
Pertamina's TATO in 2018 was 99.23%, higher than than 2018 Corporate Budget Plan of 35.63%. TMS on
the 2018 Corporate Budget Plan of 87.07%. TATO is TA is calculated by comparing total own capital with
an activity ratio to assess the effectiveness of the use total assets. Total own capital is the total equity minus
of funds embedded in the number of assets in order the unapproriated retained earnings.
to generate income. TATO is calculated by comparing
total income with capital employed.
SOLVENCY
Chart of Solvency in the Last 5 Year

Decsription Unit 2018 2017 2016 2015 2014
Liabilities to equity ratio % 66.99 56.2 59.99 71.23 94.76
Liabilities to assets ratio % 28.57 24.58 26.3 30.18 34.79
Long-term liabilities to equity ratio % 51.14 54.3 58.92 61.73 67.97
Long-term liabilities to assets ratio % 21.81 23.75 25.83 26.15 24.96
Profit (loss) ratioto total assets % 3.9 4.56 6.15 3.12 2.85
Profit (loss) to total revenues ratio % 4.33 5.63 8.23 3.36 2.06
In general, Pertamina's liabilities throughout 2018 While the Company’s solvency is indicated by the
increased compared to 2017. The increase in liabilities profit to assets and revenues ratio that shows a positive
was due to the increase in short-term liabilities as a value, which reflects the Company's solvency.
result of the increase in ICP average prices in 2018
compared to 2017. The Company was still able to
maintain good liabilities stability by lowering long-term
liabilities to assets ratio in order to ensure the payment
of libialities due in the next 12 months.
ACCOUNTS RECEIVABLE COLLECTIBILITY
In 2018, the collectibility of Pertamina’s receivables in domestic sales of crude oil, natural gas, geothermal
was 50 days on average, 12 days longer than the energy and oil products and other operating revenues
collectability rate in 2017. This was largely attributable from reimbursement of subsidy costs from the
to an increase in trade receivables with the increase Government
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Chart of Pertamina's Receivable Collectability Period in the last 5 years
Chart of Pertamina’s Receivable Collectability Period in the last 5 years

Decsription Unit 2018 2017 2016 2015 2014
Collection Period Day 50 38 43 42 38
REALIZATION OF CAPITAL GOODS INVESTMENT
Table: Fixed Asset Investment for Business Development in 2018
Realization of 2018 Realization 2017

No Directorate
(million USD) (million USD)
1 Upstream Directorate 642 1.642
2 Refinery Directorate 0 26
3 Logistics, Supply Chain, & Infrastructure Directorate 132 202
4 Refinery Development Mega Projects Directorate 194 334
5 Corporate Marketing Directorate 95 141
6 Retail Marketing Directorate 9 0
7 Asset Management Directorate 8 111
8 Finance Directorate 0 89
9 PIMR Directorate 13 0
10 AP SDM 1 0
Total 1.095 2.520
Contributions to the government (dividends and taxes)
DIVIDEND POLICY
Pertamina’s dividend policy to the Government refers to decided for Pertamina to pay dividends for 2017
the resolutions of the General Meeting of Shareholders amounting to Rp8.57trillion with a dividend payout
(GMS) while constantly taking into account the ratio of 25%. The obligations have been fully paid to
financing requirements for the Company’s expansion. the government.
The General Meeting of Shareholders on May 2, 2018 In 2017, dividend on the 2016 net profit was
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determined by the General Meeting of Shareholders In 2016, dividend on the 2015 net profit was
dated March 16, 2017 amounting to Rp12.1 trillion determined by the General Meeting of Shareholders
with a dividend payout ratio of 29%, which has been dated May 31, 2016, amounting to Rp6.8 trillion with
fully paid by Pertamina to the government. 36% dividend payout ratio, which has been fully paid
by Pertamina to the government.
Table: Payment of Pertamina dividends for the Fiscal year 2015-2017

Based on the GMS of the Fiscal Year
Description Date of Date of Date of
2017 2016 2015
Payment Payment Payment
Dividend Payout Ratio 25% 29% 36%
Total Dividend According

8,569,790 12,103,431 6,800,000
to the AGM (million USD)
Number of Shares 171,227,044 133,090,697 133,090,697
Dividend per Share (Rp) 50,049 90,941 51,093
Realized amount (million

8,569,790 12,103,431 6,800,000
USD)
Interim dividend payout 500,000 12/6/2016
Payment I 2,142,447,5 31/05/2018 3,025,858 13/04/2017 1,700,000 29/06/2016
Payment II 1,285,468,5 02/08/2018 1,715,515 16/05/2017 1,700,000 29/07/2016
Payment III 1,285,468,5 03/09/2018 1,715,515 14/07/2017 1,700,000 31/08/2016
Payment IV 1,285,468,5 02/10/2018 1,715,515 15/09/2017 1,700,000 30/09/2016
Payment V 2,570,937,0 02/11/2018 1,715,515 16/10/2017
Payment VI 1,715,515 16/11/2017
Remaining Unpaid
- -
Amount
COMPLIANCE AS MANDATORY TAXPAYER
One form of Pertamina's contributions to the state Amount of Taxes Paid

is realized through the fulfillment of the Company’s Payment of Pertamina's taxes consisting of PPh
obligations as a taxpayer and as a tax collector. As a for being withheld, Prepaid Taxes, Output VAT,
taxpayer, the Company is always obedient in fulfilling Customs Import duties, and Regional Taxes, with
its Corporate Income Tax (PPh) obligations. Whereas total transactions up to December 2018 amounted to
as a tax deductor and tax collector, the Company Rp79.91 trillion. When compared to the same period
plays an active role in deducting and collecting each in 2017 of Rp75.92 trillion, there was an increase of
taxable object. 5.26%.
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Statement of Compliance with Tax Payment addition, Pertamina has also submitted tax reporting
Time documents such as Reports of Income Tax Return and
Pertamina has paid taxes including Withholding Tax, VAT Tax Retun, Annual Income Tax Return, and other tax
VAT, Property Taxes, and other regional taxes within the obligations documents to the taxation authority pursuant
period according to the applicable tax regulations. In to the applicable tax provisions.
PERFORMANCE OF SUBSIDIARIES
In carrying out its business activities, Pertamina establishes a number of subsidiaries, in which Pertamina has
financial and operational controls through 100% or majority ownership. Until the end of 2018, Pertamina has
25 subsidiaries with line of business, total assets, operating revenues and net profits for the last two years are
presented in the following table:
(In million USD)
Operating
Company Total assets Net profit
No Line of Business revenues
Name
2018 2017 2018 2017 2018 2017
Upstream Cluster
Oil & Gas Exploration
1 PT Pertamina EP 7,498.64 7,621.46 3,160.58 2,770.08 756.04 614.78
& Production
PT Pertamina Oil & Gas Exploration

2 4,531.67 4,780.79 2,528.09 1,999.08 474.12 248.89
Hulu Energi & Production
PT Pertamina
Geothermal Explora-
3 Geothermal 2,555.69 2,404.90 660.84 622.47 107.40 95.73
tion & Production
Energy
PT Pertamina
Oil & Gas Drilling
4 Drilling Services 560.42 574.40 237.82 235.34 20.64 18.21
Services
Indonesia
PT Pertamina EP Oil & Gas Exploration

5 2,992.89 2,608.02 1,779.01 1,328.94 842.40 662.21
Cepu & Production
PT Pertamina EP Oil & Gas Exploration

6 12.85 18.53 0.00 0.00 -10.63 -57.79
Cepu ADK & Production
PT Pertamina
Internasional Oil & Gas Exploration
7 5,838.79 5,803.30 1,191.60 1,162.47 -39.71 142.73
Eksplorasi Dan & Production
Produksi

8 1,510.15 304.84 2,209.97 0.00 779.86 -2.65
Hulu Indonesia & Production
Seismic survey,
logistics base, telecom-
9 PT ElnusaTbk munications, construc- 390.67 358.38 465.01 372.01 19.40 18.47
tion and marketing of
fuel(Pertamax)

10 785.00 - - - - -
Hulu Rokan & Production
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Operating
Name
2018 2017 2018 2017 2018 2017
Downstream Cluster
Production of electric-
ity from other energy
PT Pertamina
11 sources such as natural 114.76 101.11 0.04 0.00 -1.53 -1.66
Power Indonesia
gas, liquid gas, geo-
thermal, solar energy
PT Nusantara Liquified Natural Gas

12 240.82 277.44 682.95 568.66 54.40 48.94
Regas (“LNG”) regasification
Oil and gas trade, gas

PT Perusahaan transportation, refinery,
13 7,939.27 8,183.18 3,870.27 3,570.60 304.99 196.91
Gas Negara Tbk distribution and stor-
age of oil and gas
Carrying out produc-

tion, refinery and
PT Kilang trading activities in the
14 Pertamina Inter- fields of oil, natural 1.84 - - - 0.01 -
nasional gas, and new and
renewable energy do-
mestically and abroad
PT Pertamina Industrial Trade &

15 869.27 915.38 1,572.19 1,390.85 36.20 84.03
Patra Niaga Activities Services
PT Pertamina
16 Fuel distributor 203.10 150.64 902.99 891.84 13.50 10.63
Retail
Shipping Services,
PT Pertamina
17 Maritime Services & 307.52 287.01 143.91 132.95 19.59 13.67
Trans Kontinental
Logistics Services
PT Pertamina Processing and Market-

18 416.58 500.64 777.79 719.29 124.78 134.42
Lubricants ing of Lubricants
PT Pertamina
Oil and gas commod-
19 Internasional 296.33 208.97 404.75 99.51 52.73 14.92
ity shipping services
Shipping
130
ANNUAL REPORT 2018
LINE OF BUSINESS
Operating
Name
2018 2017 2018 2017 2018 2017
Finance & Services Cluster
PT Asuransi Tugu
20 Pratama Indone- Insurance services 1.204,25 1.091,91 179,32 183,34 17,47 34,71
sia Tbk
PT Pertamina
Exercise equity partici-
21 Pedeve Indo- 62,10 71,33 8,14 14,80 5,48 3,20
pation
nesia
Services include hos-

pitality, office space,
22 PT Patra Jasa 241,17 235,57 97,77 75,57 9,31 8,55
homes, apartments and
other buildings
PT Pelita Air Air transportation ser-

23 60,38 65,66 48,66 56,54 -0,55 2,65
Service vices, rent of aircraft
PT Pertamina Health services, man-

24 105,74 111,01 91,40 98,80 0,63 3,88
Bina Medika agement of hospitals
Management consult-
PT Pertamina
ing services, train-
25 Training & Con- 39,80 40,77 111,72 106,27 2,88 2,15
ing, security guard
sulting
oursource
CORPORATE VALUATION/ASSESSMENT
Corporate Health Rating
The Company’s health rating is measured in accordance with the guideline issued by the Minister of State-Owned
Enterprises (BUMN) through the Decree of the Minister of SOE No. KEP-100/MBU/2002 on the rating of the
health of State-Owned Enterprises. Pertamina’s health rating in 2018 was ranked “Healthy AA” with a score of
86.72. These results are obtained from several aspects of assessment as follows:

Indicators Score
Financial aspect 64.50
Operational Aspects 13.22
Administrative Aspects 9.00
Total Score 86.72
131
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LINE OF BUSINESS

Excellent Performance Assessment Criteria (KPKU)

In 2018, Pertamina conducted a company performance assessment based on Excellent Performance Assessment
Criteria (KPKU) with criteria adopted from "Malcolm Baldridge Criteria for Performance Excellence" conducted by
FEB BUMN Assessors.
The assessment process includes clarification, verification, and site visits of the 7 main focuses of KPKU with SOE
KPKU Framework (System Perspective) as below:
COMPANY PROFILE
2 4
Strategic Workforce
Planning Focus
1 7
Leadership Results
3 5
Customer Operational
Focus Focus
Measurement, Analysis and Knowledge Management
SOE KPKU is a tool that can be used to assess/measure all elements of a company’s management system as well
as process and result improvement factors as a consideration when conducting an assessment.
Results of the 2018 KPKU Assessment

Based on the results of the 2018 SOE KPKU, Pertamina obtained a score of 755.75 in the "Industry Leader"
category, an increase compared to the previous year of 739.50.
739.50 755.75
2017 2018
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ANNUAL REPORT 2018
LINE OF BUSINESS
PROSPECTS AND FUTURE PLANS

IIn the midst of various concerns about the economic both in the industrial and retail segments.
conditions and the global oil and gas industry, However, the government policy through the Regulation
Pertamina has high optimism about prospects for of the Ministry of Environment and Forestry of the
2019. Pertamina's production and sales are believed Republic of Indonesia No. P. 20/MENLHK/SETJEN/
to be significantly increase. In the upstream sector, KUM. 1/3/2017 concerning Standard Quality of New
the merger of 13 Ex-Terminated Working Areas, of Type Motor Vehicle Exhaust Emissions Category M,
which 8 Working Areas have been effective in 2018 Category N, and Category O which have implications
has increased oil and gas proven reserves (proven for fuel distributed domestically must meet the quality
reserves, P1) Pertamina. Moreover, 8 Working standard of Euro 4. Pertamina is committed to
Areas have been effective as part of Pertamina since presenting high-quality fuel in the country. Therefore,
2018. This will have a positive impact on increased in order to meet the demand for domestic fuel in terms
production of Pertamina in 2019 and beyond. Not of quantity and quality, Pertamina through a medium
only that, Pertamina's oil and gas production will refinery mega project and will develop 4 refineries
also increase significantly, especially from the Rokan (refinery development Master Plan or abbreviated
Working Areas, the Working Areas with the largest as RDMP) and build 2 new refineries (new Grass
national oil production of which the management Root Refinery or abbreviated as NGRR). The entire
contract will terminated by the old operator in 2021. mega project is targeted to be completed in 2025
with refinery processing capacity increasing from 1.3
In the downstream sector, demand for domestic fuel million barrels per day to 2 million barrels per day and
continues to increase. This can be can be interpreted generating fuel with Euro 5 standard.
as an opportunity for Pertamina to increase its sales,
ROAD TO HIGH- Pertamina strives to provide quality and eco friendly Fuel
(BBM). This effort is in line with the government program
QUALITY FUEL
that will implement the EURO 4 standard BBM usage
gradually.
TOWARDS EURO 4 AND EURO 5 BBM

Regulation of Minister of
BALIKPAPAN REFINERY
Environment and Forestry
PERTAMINA DEX HQ • Enforcement of Euro 4
standards for 4-wheeled
motorized vehicles
• 2017 New type of
vehicle
• 2018 Vehicles being
produced
DUMAI REFINERY
PERTAMINA DEX HQ
BALONGAN REFINERY
PERTAMAX TURBO HQ
PERTAMAX HQ CILACAP REFINERY
PERTAMAX HQ
2025 PLAN: RDMP : Refinery Development Master Plan

GRR : Gross Root Refinery
RFCC : Residual Fluid Catalytic Cracking
RDMP RDMP PLBC : Cilacap Blue Sky Project
CILACAP BALIKPAPAN
(Euro 5) TAHAP II
RDMP DUMAI
RDMP RDMP (Euro 5) GRR
RFCC PLBC
BALIKPAPAN BALONGAN GRR TUBAN BONTANG
CILACAP CILACAP (Euro 5) (Euro 4/5)
TAHAP I (Euro 5) (Euro 5)
2015 2018 2021 2023 2024 2025
133
SECURING ENERGY
However, in order to present high-quality BBM, Pertamina On the other hand, the government policy contained in
also pays attention to fulfilling the Renewable Energy Regulation of Minister of Energy and Miniral Resources
Components (EBT). In 2014 through Government No. 42 year 2018 on fuel utilization priorities for
Regulation No. 79 of 2014 concerning National Energy domestic needs also provides the opportunity for
Policy (KEN), the government sets a target for the National Pertamina to save the cost of transporting imported
Energy Mix in order to realize national energy security, crude oil that is conducted by Pertamina so far.
where the proportion of EBT increases gradually, namely
5% in 2015, 23% in 2025, and 31% in the year 2050. Another effort to develop eco friendly energy is to
Hard work and strong commitment from various parties optimize gas fuel. Domestically, the demand for gas
is needed considering the achievement of the current as a more eco friendly fossil energy is projected to
National Energy Mix is far from the target. Nevertheless, increase continually. The projection is reflected in
Pertamina as a national energy company supports and is the mega project of refinery development and the
fully committed to developing EBT. EBT Pertamina's most construction of a new refinery carried out by Pertamina
significant development progress is geothermal energy for the next 5 to 6 years will absorb gas in sufficiently
which is managed by PT Pertamina Geothermal Energy large volumes. With the integration of PT Perusahaan
(PGE). Gas Negara Tbk. (PGN) with Pertamina through
the state-owned oil and gas holding, increasingly
The government's commitment to provide alternative integrating gas infrastructure, while saving capital
fuels is also realized with the policy of distributing and operational costs. This condition creates an
biofuels. In accordance with the road map for the opportunity for Pertamina to integrate the upstream and
supply of biodiesel-based biofuels, the government in downstream gas businesses.
2018 Pertamina as one of the General Commercial
Business Entities of Fuel (BU BBM) has fulfilled its supply In a Liquefied Natural Gas (LNG) business, Pertamina's
target and distributed 20% biodiesel (B20) biofuels competencies and experiences create opportunities
to retail and industrial markets with total volume of to expand business overseas. While the traditional
16 million kilo liters. With the implementation of B20, markets of the Pertamina LNG market are China, Japan,
Pertamina has succeeded in reducing the import of and Taiwan, Pertamina is currently looking for the LNG
Solar significantly until the end of 2018. In 2020 the market to South Asia and Africa. The signing of LNG
government targets the implementation of B30. This supply agreements with Petrobangla Bangladesh in
aggressive government roadmap has the potential to 2018 initiated by the Government of both countries
reduce Pertamina's diesel imports even more, while became the access door of Pertamina to expand the
creating opportunities for Pertamina to develop biofuel market in the region.
refineries (green refineries).
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ANNUAL REPORT 2018
GOING CONCERN Fluctuations in World Crude Oil Prices
As a commodity industry, the oil and gas business is
In 2018, there is no factor significantly affecting strongly influenced by fluctuations in world crude oil
Pertamina's going concern. The Company's internal prices. The price of crude oil is largely influenced by
and external environmental conditions are in a fairly the equilibrium between world supply and demand for
good condition and even have an upward trend. these commodities. Factors that influence the supply
and demand of world crude oil include the transition
Pertamina's management has taken a number of of fossil fuel use to EBT that has occurred in a number
anticipatory measures to reduce and anticipate various of countries which has caused the demand for crude
risks the Company might face by implementing a good oil to decline; geopolitical factors such as US sanctions
risk management system. Pertamina's management has against Iran and Venezuela, where both of these
determined a number of factors that can significantly countries are quite large producers of crude oil; and
influence Pertamina's business continuity, including: economic growth in both developed countries and
emerging market countries that affect demand for oil
and gas and energy supplies in general.
Average Crude Oil Spot Price Forecasts

Average spot prices for UK Brent, Dubai, and West Texas Intermediate (WTI)
Word Bank: Averange Crude Oil Crude Projections IMF : Average Crude Oil Price Projections
$/bbl $/bbl
80 60
70 55
80 50
70 45
70 40
2015 2017 2019 2021 2023 2025 2027 2030 2015 2019 2023 2030
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 Units 2014 2015 2016 2017 2018 2019 2020 2021
$/bbl 96.24 50.75 42.81 52.81 68.35 66.00 65.00 65.48 65.97 $/bbl $/bbl 96.25 50.79 42.84 49.01 48.63 50.33 51.83 53.33
Source: World Bank Commodity Forecast Price Data, April 2019 Source: IMF Commodity Price Forecasts, July 2017
Source: https://knoema.com/yxptpab/crude-oil-price-forecast-2019-2020-and-long-term-to-2030
Foreign Currency Exchange Rates

Considering that Pertamina is still importing both crude oil, LNG and oil and gas products, Pertamina is very
exposed to changes in the rupiah exchange rate against the US dollar.
PERTAMINA'S STRATEGY FOR BUSINESS SUSTAINABILITY
Long Term Contract Mitigation of Foreign currency exchange risk

To minimize exposure to the risk of fluctuations in the Mitigation of the risk of rupiah exchange rate against
price of crude oil, Pertamina carries out a long-term foreign currency is conducted by Pertamina by
contract to purchase crude oil because prices are hedging. The minimum hedging ratio is stipulated
determined at the date of purchase. according to Bank Indonesia Regulation No. 16/21/
PBI/2014 concerning the application of prudence
principles in Non-Bank corporate Debt management.
Another mitigation conducted by Pertamina was to
make periodic analysis of the impact of weakening and
strengthening Rupiah exchange rate against the US
dollar against the company's finances.
135
SECURING ENERGY
CORPORATE
GOVERNANCE
The implementation of Good
Corporate Governance
principles has become an
integral part of Pertamina’s
operations.
The traditional people of Yogyakarta are competing
in an archery competition. This traditional Mataram
Yogyakarta style archery is different from modern
archery, especially in the form of arrows and the
players must wear traditional clothes and sit in bersila
style (cross-legged). This traditional sport called
jemparingan has a philosophy that jemparingan is not
just a sport, but also an art to cultivate a sense of calm
and focus.
COMMITMENT TO IMPLEMENT
GOOD CORPORATE GOVERNANCE

Good Corporate Governance (GCG) is a mechanism GCG implementation to Pertamina is not solely to
or system that directs and controls the Company in perform its obligations, but is also a necessity in
order to meet the expectations of its stakeholders maintaining the transparency and accountability of the
based on the principles of GCG (Transparency, Company’s management to all stakeholders. Pertamina
Accountability, Responsibility, Independence, and continues to develop GCG according to the best
Fairness) as the foundation for the Company’s practices so as to maximize the Company’s value, carry
performance enhancement. A consistent and continuous out effective and efficient business activities, enable
implementation of GCG will bring positive impact a professional and independent management of the
on the realization of the Company’s objectives and Company, encourage decision-making by all organs of
enterprise risk monitoring and assessment, the efforts the Company based on moral values and compliance
to maximize performance, and on the development of with applicable laws and regulations, provide maximum
work culture within the Company. protection and fair treatment to shareholders and
other stakeholders, as well as empower the spirit for
continuous innovation.
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ANNUAL REPORT 2018
Pertamina is optimistic that commitment and adherence LEGAL BASIS OF CORPORATE

to GCG principles implementation will ensure long- GOVERNANCE IMPLEMENTATION
term business growth which will eventually increase
the confidence of shareholders and other stakeholders In the implementation, Pertamina refers to policies, SOE
in the Company. Throughout 2018, Pertamina has regulations including SOE Ministerial Regulation No.
implemented a number of GCG initiatives, to name a PER-01/MBU/2011 jo. No. PER-09/ MBU / 2012
few: on Good Corporate Governance Implementation in
1. Implementation of GCG Soft Structure consisting of: SOEs, as well as Decree of SOE Ministry Secretary
a. Board Manual (Commitment between the No. SK-16 / S.MBU / 2012 on Indicators/Parameters
Board of Commissioners and the Board of for Assessing and Evaluating the Implementation of
Directors) Good Corporate Governance in SOEs, as a step for
b. Code of Corporate Governance Pertamina to implement Article 44 of SOE Ministerial
c. Code of Conduct Regulation No. PER-01 / MBU / 2011 in measuring
d. Conflict of Interest (assessing and evaluating) GCG implementation in
e. Gratification Guideline Pertamina.
f. Work Guideline for Whistleblowing System
2. Evaluation and submission of recommendations on CORPORATE GOVERNANCE
the results of Pertamina’s 2017 GCG assessment to PRINCIPLES
related functions and Organs in the Company.
3. Conducting GCG assessment in Pertamina for the As a State-Owned Enterprise, Pertamina is committed
2018 period to strengthening GCG framework. GCG principles are
4. Optimizing Whistle Blowing System management applied to the entire system of the Company’s work
with a follow-up through early examination of the procedures all Pertamina’s Personnel must comply with.
reports received through WBS. GCG implementation in Pertamina is not merely a
5. Managing Report of State Officials’ Wealth mandatory requirement, but has become a culture and
6. Disseminating GCG within Pertamina, internally necessity in carrying out the daily business activities, by
and externally all personnel from top management down to workers in
7. Conducting internalization of GCG tools as well as the fields.
GCG and Compliance related work programs
8. Implementing risk management and internal control Pertamina's commitment to be a clean and corruption-
system free company as a series of BUMN Bersih (Clean
9. Conducting business and other supporting activities SOEs) Road Map is summarized in a series of
in accordance with clear and transparent Standard Compliance work programs such as: (i) Whistle
Operating Procedures. Blowing System (WBS) implementation, follow-up
and evaluation; (ii) Report of State Officials’ Wealth
(LHKPN); (iii) Gratification Control Unit and other
educational programs such as (i) GCG dissemination/
internalization for prospective new workers, new
management including Pertamina subsidiaries and
affiliated companies that are newly established/joined
in Pertamina Group, GCG campaign as a reminder to
work with integrity in accordance with GCG principles.
139
SECURING ENERGY

Pertamina is a pilot project in various activities initiated Result of GCG Assessment

by the Corruption Eradication Commission (KPK) such The score of Pertamina’s GCG Assessment in 2018
as the development of the culture of Professional with was 92.375%, while the score of Pertamina’s GCG
Integrity (Profesional Berintegritas or PROFIT) culture Assessment in the previous year was 91.971%.
and Coordination of Energy Sector Management
Supervision. Aspects/
Achievement Performance
No Indicators/ Weight
(%) Category
Parameters
GCG ASSESSMENT
Commitment
to Sustainable
IMPLEMENTATION PROCEDURES 1 Implementation of 7,000 96
Good Corporate
As part of continuous implementation of GCG, the Governance
Company conducts GCG assessment from year to year
Shareholders and
2 9,000 95
with a view to get an overview of the effectiveness of GMS
GCG implementation in Pertamina based on the best Board of
3 35,000 92
practices. One of the purposes of GCG assessment Commissioners
is to encourage professional, efficient, and effective 4 Board of Directors 35,000 91
management of SOE as well as to empower the Information
functions and improve the independence of Pertamina. 5 Disclosure and 9,000 90
Transparency
GCG Assessment Criteria and the Party 6 Other Aspects 5,000 100
Conducting GCG Assessment

Overall Score 92 Very good
Pursuant to the parameters set forth in the Decree of
the SOE Ministry Secretary No. SK-16/S.MBU/2012
dated June 06, 2012, on the Indicators/Parameters Recommendations from Assessment
of Assessment and Evaluation of Good Corporate Results
Governance Implementation in SOEs, the criteria Recommendations from the Assessment Results:
used as indicators/parameters for GCG assessment 1. To make a review and enhancement of corporate
include (i) Commitment to Sustainable Implementation policies and procedures;
of GCG; (ii) Shareholders and GMS; (iii) Board of 2. To ensure that corporate policies and procedures
Commissioners; (iv) Board of Directors; (v) Information are carried out consistently;
Disclosure and Transparency; (vi) Other Aspects. 3. To make an adequate documentation on ongoing
activities of GCG implementation; and
GCG Assessment in Pertamina is executed annually by 4. To improve information disclosure in annual
an Assessor/Independent Consultant. For year 2018, reports.
Pertamina’s GCG assessment was conducted by PT
RSM Indonesia Konsultan.
140
ANNUAL REPORT 2018
GORPORATE GOVERNANCE STRUCTURE AND MECHANISM
GCG structure in Pertamina consists of General Meeting of Shareholders (AGMS), Board of Commissioners, and
Board of Directors in accordance with Law No 40 Year 2007 on Limited Liability Company (Company Law). In
addition, Pertamina has formed supporting organs consisting of Audit Committee, Nomination and Remuneration
Committee, and Risk Management Monitoring Committee, Corporate Secretary, Compliance Function, and Internal
Audit Unit. All GCG organs execute their functions in accordance with the legislation, Articles of Association, and
other provisions in performing duties, functions and responsibilities for the best interests of the Company.
Transparency, GMS, Board of GMS Implementation; Business continuity;

Accountability, Commissioners, Board implementation of the business effectiveness
Responsibility, of Directors, Audit functions of authority and and efficiency; adherence
responsibility of the Board to prevailing rules and
Independence, and Committee, Nomination
of Commissioners and
Fairness and Remuneration the Board of Directors; regulations, protection
Committee, Risk meeting of the Board for all stakeholders,
Management Monitoring of Commissioners and and community welfare
Committee, Corporate the Board of Directors; and environmental
Secretary, Compliance implementation of policies conservation.
Function, and Internal and strategies in line with
the Vision and Mission; and
Audit Unit. implementation of CSR and
PKBL programs.
GCG Governance Governance Governance

1 Principles 2 Structure 3 Process 4 Results
141
SECURING ENERGY
GENERAL MEETING OF SHAREHOLDERS (GMS)

The General Meeting of Shareholders (GMS) is the 2. The Annual General Meeting of Shareholders
Governance organ which holds the highest authority (AGMS) approval of the Annual Report was
in the Company and possesses all authorities that are conducted in June after the fiscal year ended. In
not granted to the Board of Directors or the Board of this meeting, the Board of Directors presented the
Commissioners. The implementation of a GMS is the Company’s Annual Report, proposal on the usage
Company’s obligation as a forum for shareholders of the net profit, as well as other matters requiring
to make important decisions; through considering approval from the GMS for the Company’s interest.
the Articles of Association and prevailing laws, the 3. Extraordinary General Meeting of Shareholders
decisions made in the GMS should be according to the (RUPSLB) is a GMS held at any time based on the
Company’s business interests. Company’s requirements.
During the GMS, it is possible to insert ideas Legal Basis for GMS:
proposed by the Board of Commissioners and or 1. Law No. 40 of 2007 on Limited Liability
shareholders that represent at least 1/10 (one tenth) Companies
of all shares issued by the Company with legal voting 2. Law No. 19 of 2003 on State-Owned Enterprises
rights where the origin of the related party has to be 3. Law No. 14 of 2008 on Public Information
approved by the Board of Directors before the date Disclosures
of Annual GMS invitation is received. Proposals from 4. SOE Ministerial Regulation No. PER-09/
the Board of Commissioners and/or Shareholders MBU/2012 on Implementation of Good Corporate
that are not in accordance with the provisions of Governance in State-Owned Enterprises
the Company’s Articles of Association may only be 5. SOE Ministerial Decree No. Kep-117/M-
discussed and decided by the GMS providing that all MBU/2002 on Implementation of Good Corporate
of its shareholders or authorized representatives are Governance Practices in State-Owned Enterprises
present and approving the additional agenda and the 6. PT Pertamina (Persero) ‘s Articles of Association
resolutions of the GMS on these proposals shall be as amended and finally with Amendment Deed
approved unanimously. No. 29 of 2018 dated April 13, 2018, made by
Notary Aulia Taufani Bachelor of Law and has
Pertamina’s GMS consists of: been approved by the Minister of Law and Human
1. The Annual General Meeting of Shareholders Rights of the Republic of Indonesia No: AHU-
(AGMS) in order to approve the Work Plan and 0008395.AH.01.02. Year 2018 April 13, 2018.
Budget is held no later than 30 (thirty) days after Amendments are made to Article 4 paragraph
the current fiscal year (the fiscal year of related (1), paragraph (2) and paragraph (3) concerning
work plan and budget). Throughout the meeting, Capital, Article 11 paragraph (2) concerning the
the Board of Directors conveys the Draft of Work Duties, Authorities and Obligations of the Directors.
Plan and Budget including the Financial Report This amendment is contained in the Letter of SOE
Projection and also other items that require the Ministry No. S-217 / MBU / 04/2018 dated April
approval of the GMS for the Company’s benefit 11, 2018.
that has not also been included in the draft of Work
Plan and Budget.
142
ANNUAL REPORT 2018
2018 GMS Implementation

Throughout 2018, the Company held a GMS by 29 times, namely Annual GMS by 2 times and Extraordinary
GMS by 27 times. The details of GMS implementation are as follows:
1. Annual GMS
In 2018, Pertamina held 2 Annual GMS, namely 2018 GMS of Work Plan and Corporate Budget and 2017
Annual Report GMS.
a. 2018 GMS of Work Plan and Corporate Budget (RKAP)
2018 GMS of Work Plan and Budget (RKAP) was not held in 2017 due to the change of PT Pertamina
(Persero) Technical Deputy at the end of December 2017. The 2018 RKAP GMS was held in January
2018.
PT Pertamina (Persero) 2018 GMS of Work Plan and Budget (RKAP) was held on:
Day/Date Wednesday, January 17, 2018
Time 14.00 – 16.00 WIB
State-Owned Enterprise (SOE) Ministry, 9th floor,

Place
Medan Merdeka Selatan Street, Central Jakarta
GMS Chairman PT Pertamina (Persero) President Commissioner
Shareholders Proxy Deputy to SOE Minister for Mining, Strategic Industries and Media Affairs
The 2018 GMS Agenda of Work Plan and Corporate Budget are as follows:
No Agenda Description
1st Approval/Ratification of the 2018 Work Plan and Budget (RKAP) and the 2018 Partnership
1
Agenda and Community Development program budget (RKAPKBL)
Approval of PT Pertamina’s operational aspects indicator in 2018 for the calculation of the
2nd
2 Company’s health level based on the Decision from the Minister of SOEs No. KEP-100/
Agenda
MBU/2002 dated June 04, 2002.
Ratification of Key Performance Indicators (KPI) that are contained in the 2018 management
3rd
3 contract between the Board of Directors and Board of Commissioners of PT Pertamina (Pers-
Agenda
ero) with the Shareholders of PT Pertamina (Persero)
4th
4 Approval of a Working Capital Loan withdrawal and the external fund withdrawal
Agenda
Approval of the implementation of assignment for the supply and distribution of 3 Kg LPG,
5th
5 Specific Fuel Type (JBT) as well as the assignment and distribution of Fuel Type Special As-
Agenda
signment (JBKP) by PT Pertamina (Persero).
Shareholders have approved and ratified the entire GMS agenda of Work Plan and Corporate Budget
in 2018. The GMS resolutions have been ratified based on Deed No. 8 dated January 17, 2018
concerning Minutes of PT Pertamina (Persero) Work Plan and Budget (RKAP) AGMS in 2018 made by
Notary Marianne Vincentia Hamdani, SH.
143
SECURING ENERGY

b. PT Pertamina (Persero) GMS of 2017 Annual Report

PT Pertamina (Persero) GMS of 2017 Annual Report has been held on:
Day/Date Wednesday, May 02, 2018
Time 09.00 – 12.00 WIB
State-Owned Enterprise (SOE) Ministry, 6th floor,

Place
Medan Merdeka Selatan Street, Central Jakarta
GMS Chairman PT Pertamina (Persero) President Commissioner
Shareholders Proxy Deputy to SOE Minister for Mining, Strategic Industries and Media Affairs
The GMS Agenda is as follows:
Approval of the Company's Annual Report on the condition and operation of the Company
in the fiscal year of 2017, report on the Partnership Program and Community Develop-
1 1st Agenda
ment for the 2017 fiscal year , and report on the Execution the of Board of Commissioners
Supervisory Function for the 2017 Fiscal year.
Approval of the Company’s Consolidated Financial Statement for the 2017 fiscal year, and
Report on the Partnership Program and Community Development Program for the 2017
2nd fiscal year, as well as the provision of settlement and full disclaimer (volledig acquit et de
2
Agenda charge) to the members of the Board of Commissioners and the Board of Directors who
served with actions of oversight and management of the Company throughout the 2017
fiscal year.
3 3rd Agenda Stipulation of the use of the Company’s Net Income for the 2017 fiscal year.
Stipulation of Tantiem and Remuneration for Board of Directors and Board of Commission-
4 4th Agenda ers for the performance of the 2017 fiscal year, Board of Directors' salary and honorarium
for the Board of Commissioners, as well as benefits and facilities for 2018.
The appointment of a Public Accounting Firm to audit the Company’s Consolidated Finan-
5 5th Agenda cial Statement and Financial Report of the Partnership Program and Community Develop-
ment Program Report for the fiscal year ended on December 31, 2018.
Shareholders have agreed and ratified the GMS resolutions as outlined in Deed No. 03 May 8, 2018
concerning Minutes of PT Pertamina (Persero) Annual General Meeting of Shareholders made before
Notary Lenny Jennis Ishak, SH.
c. GMS of 2019 Work Plan and Corporate Budget

The GMS of 2019 Work Plan and Corporate Budget will be held in January 2019.
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ANNUAL REPORT 2018
2. Extraordinary GMS
In 2018, there are 27 Extraordinary GMS, all of which are conducted circularly, with the following agenda:
No. Date Agenda
End of Year Report on Pertamina's Challenges and Strategic Achievements for 2017
1 January 8, 2018
Period
Approval of the Subsidiaries’ Board of Directors and Board of Commissioners Appoint-

2 January 22, 2018
ment
3 January 22, 2018 Direction of the 2018 PKBL Budget Work Plan
4 February 7, 2018 Nomination of the Subsidiaries’ President Director
5 February 8, 2018 Audit by KAP on 2017 PKBL Implementation
6 February 9, 2018 GMS approval of the project investment implementation
PT Pertamina (Persero) Board of Directors Members Dismissal, Change of Position No-

7 February 9, 2018
menclature and Transfer of Duties
8 February 19, 2018 Proposal for Appointment of Subsidiaries’ Prospective Directors
9 February 21, 2018 Response to the Project Progress Report
Approval of the Write-Off and Transfer of Fixed Assets of PT Pertamina (Persero) Directo-
10 March 12, 2018
rate of Marketing and Directorate of Human Capital & General Affairs
Approval of Acceptance of Shares Transfer and Principle Approval of Integration of PT

11 April 11, 2018
Pertamina Gas into PT Perusahaan Gas Negara Tbk
Approval of Increasing Authorized Capital, Additional Paid-in Capital, and Amendments

12 April 11, 2018
to PT Pertamina (Persero) Articles of Association
13 April 20, 2018 Dismissal and Appointment of PT Pertamina (Persero) Board of Directors Members
Delegation of Rights and Authority of Series A Shareholders to PT Pertamina (Persero) as

14 May 9, 2018
the largest B Series Shareholder of PT Perusahaan Gas Negara Tbk
15 May 15, 2018 Project progress report
Dismissal and Appointment of the Board of Commissioners Members, as well as Determi-

16 May 30, 2018
nation of Independent Commissioner of PT Pertamina (Persero)
17 June 7, 2018 Write-off and Transfer of Pertamina's Fixed Assets
Approval of the Principle of Corporate Action to Maintain PT Pertamina (Persero) Finan-

18 June 29, 2018
cial Health Conditions
Implementation of PT Perusahaan Gas Negara Tbk Extraordinary General Meeting of

19 July 19, 2018
Shareholders (EGMS)
Assignment, Dismissal, and Appointment of PT Pertamina (Persero) Board of Directors

20 August 29, 2018
Members
21 September 7, 2018 Changes in PT Perusahaan Gas Negara Tbk (PGN) Articles of Association
22 September 7, 2018 Changes in PT Perusahaan Gas Negara Tbk (PGN) Management
Dismissal, Transfer of Assignments, and Appointment of PT Pertamina (Persero) Board of

23 September 13, 2018
Directors Members
24 October 1, 2018 RKAP Approval for 2018 Revision of PT Pertamina (Persero)
25 November 9, 2018 SOE University for Human Capital Development for all SOEs
26 December 3, 2018 Project progress report
27 December 27, 2018 Approval of PT Pertagas Shares Divestment by 51%
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Other than the above Extraordinary GMS, the Company’s Shareholders have taken decisions in lieu of the
Extraordinary GMS (Circular Decision) by 32 (thirty two) times. In accordance with Article 91 of Law no.
40/2007 concerning Limited Liability Companies and Regulation of SOE Minister No. Per-01 / MBU / 2011,
decisions taken in this manner are valid and binding on all shareholders, the Company and the parties listed
in the decision.
Realization of GMS Resolution

Pertamina has realized all GMS resolutions held in 2018, thus no GMS resolution has yet to be realized as of
December 31, 2018.
PREVIOUS YEAR GMS
In 2017, the Company held a GMS of 14 times, namely 1 time of Annual GMS and 13 times of Extraordinary
GMS. The GMS resolutions are as follows:
Annual GMS
In 2017, the Company has carried out the Annual GMS for the 2016 Annual Report on Wednesday, March
16, 2017 at the 7th Floor of the SOE Ministry Building, Jalan Medan Merdeka Selatan, Central Jakarta. The
GMS resolutions are stated in the Notary Deed No. 20 concerning Minutes of 2016 Annual Report GMS of PT
Pertamina (Persero) which was ratified by Notary Lenny Jennis Ishak, SH dated March 16, 2017.
The Annual GMS agenda is as follows:

Approval of the Company's Annual Report on the condition and operation of the Company in the fiscal
year of 2016, report on the Partnership Program and Community Development for the 2016 fiscal year
1 1st Agenda
, and report on the Execution the of Board of Commissioners Supervisory Function for the 2016 Fiscal
year.
Approval of the Financial Statement for the 2016 fiscal year, and Report on the Partnership Program
and Community Development Program for the 2016 fiscal year, as well as the provision of settlement
2 2nd Agenda and full disclaimer (volledig acquit et de charge) to the members of the Board of Commissioners and the
Board of Directors who served with actions of oversight and management of the Company throughout
the 2016 fiscal year.
3 3rd Agenda Stipulation of the use of the Company’s Net Income for the 2016 fiscal year.
Stipulation of Tantiem and Remuneration for Board of Directors and Board of Commissioners for the
4 4th Agenda performance of the 2016 fiscal year, Board of Directors' salary and honorarium for the Board of Com-
missioners, as well as benefits and facilities for 2017.
The appointment of a Public Accounting Firm to audit the Company’s Consolidated Financial Statement
5 5th Agenda and Financial Statement of the Partnership Program and Community Development Program for the fiscal
year ending on December 31, 2017.
In 2017, the GMS of Work Plan and Corporate Budget for 2018 was not held, due to the change of PT Pertamina
(Persero) Technical Deputy at the end of December 2017.
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ANNUAL REPORT 2018
EXTRAORDINARY GMS
In 2017, Pertamina held 13 times of Extraordinary GMS, all of which were conducted circularly, with details as
follows:
No. Date Agenda
1 January 5, 2017 Proposal for Appointment of the affiliated companies’ Board of Commissioners
2 January 5, 2017 Proposal for Appointment of PT Pertamina Retail Board of Commissioners Members
3 January 5, 2017 Proposal for Appointment of PT Pertamina Gas Board of Commissioners Members
Dismissal and Change of Position Nomenclature of PT Pertamina (Persero) Board of Directors

4 February 3, 2017
Members
5 March 16, 2017 Appointment of PT Pertamina (Persero) President Director
Approval from the Board of Directors to Include PT Pertamina (Persero) in the Tax Amnesty Pro-
6 May 3, 2017
gram (TA) of 2017
7 June 12, 2017 Approval regarding the Abolition and Release of one of the ship assets
Dismissal, Change of Position Nomenclature, Transfer of Duties, and Appointment of the Board of
8 August 15, 2017
Directors Members of PT Pertamina (Persero)
September 12,
9 Appointment of PT Pertamina (Persero) Board of Commissioners Members
2017
November 17,
10 Response to the Report of Management 3rd Quarter of 2017 for PT Pertamina (Persero)
2017
November 27,
11 Appointment of the Members of the Board of Directors of PT Pertamina (Persero)
2017
December 8, Approval/Ratification of the Revised Work Plan and Corporate Budget (RKAP) of PT Pertamina
12
2017 (Persero) for 2017
December 11, Application for the Approval of the GMS regarding the Acts of the Board of Directors with the Ad-
13
2017 dition of Equity Participation of PT Pertamina (Persero) to PT Pertamina Power Indonesia
Other than the above Extraordinary General Meetings of Shareholders, the Company’s Shareholders have taken
decisions in lieu of Extraordinary General Meeting of Shareholders (Circular Decisions) 21 (twenty one) times.
Based on Article 91 of Law No. 40/2007 for Limited Liability Companies and the SOEs Minister Regulation No.
Per-01/MBU/2011, decisions taken in this way are legitimate and binding on the Shareholder, the Company and
the parties listed in the decisions.
GMS Resolution
Pertamina has implemented all GMS resolutions held in 2017, thus no GMS decisions have yet to be realized as of
December 31, 2017.
147
SECURING ENERGY
BOARD OF COMMISSIONERS

As one of the Company's organs, the Board of Commissioners has a main function to conduct supervision in
general and / or specifically in accordance with the Articles of Association and provide direction to the Board
of Directors in running the company’s management. The Board of Commissioners has the duty to monitor the
effectiveness of GCG practices implemented by the Company and if it is deemed necessary, adjustments can be
made in accordance with the Company’s needs. The Board of Commissioners is appointed and dismissed by the
GMS.
Board of Commissioners Composition

In 2018, there was a change in the composition of the Board of Commissioners. Based on the GMS on May 30,
2018, Mr. Edwin Hidayat Abdullah was honorably dismissed as a Commissioner and appointed Mr. Ego Syahrial
& Mr. Ahmad Bambang as Commissioners, so that the number of Pertamina’s Board of Commissioners members
become 7 (seven) as of December 31, 2018 with the following structure:
Name Position Legal Basis of Appointment Period of Office
Determination as President Commissioner based on Decree

of SOE Minister as PT Pertamina (Persero) General Meeting
President
of Shareholders (GMS) No.KEP-60 / MBU / 05/2015
Commissioner/ May 06, 2015 –
Tanri Abeng dated May 6, 2015 and Determination as Independent
Independent December 31, 2018
Commissioner based on Decree of SOE Minister as PT
Commissioner
Pertamina (Persero) General Meeting of Shareholders (AGM)
No.SK-254 / MBU / 11/2016 dated November 14, 2016
November 14, 2016

Decree of SOE Minister as PT Pertamina (Persero) General
Vice President – December 31,
Arcandra Tahar Meeting of Shareholders (GMS) No.SK-254 / MBU /
Commissioner 2018
11/2016 dated November 14, 2016

Sahala Lumban May 06, 2015 -
Commissioner Meeting of Shareholders (GMS) No.SK-58 / MBU /
Gaol December 31, 2018
05/2015 dated May 6, 2015

May 06, 2015 -
Suahasil Nazara Commissioner Meeting of Shareholders (GMS) No.SK-58 / MBU /
December 31, 2018
05/2015 dated May 6, 2015

Meeting of Shareholders (GMS) No.SK-194 / MBU /
September 12, 2017
Independent 09/2017 dated September 12, 2017 and Determination as
Alexander Lay - December 31,
Commissioner Independent Commissioner based on Decree of SOE Minister
2018
as PT Pertamina (Persero) General Meeting of Shareholders
(GMS) No.SK-142 / MBU / 05/2018 dated May 30, 2018

May 30, 2018 –
Ahmad Bambang Commissioner Meeting of Shareholders (GMS) No.SK-142 / MBU /
December 31, 2018
05/2018 dated May 30, 2018

May 30, 2018 –
Ego Syahrial Commissioner Meeting of Shareholders (GMS) No.SK-142 / MBU /
December 31, 2018
05/2018 dated May 30, 2018
Referring to Law No.19 of 2003 concerning SOEs, Article 27, the appointment and dismissal of Commissioners
is carried out by the SOE Minister as the GMS of PT Pertamina (Persero). Requirements and Procedures for
Appointment and Dismissal of the Board of Commissioners Members refer to Regulation of SOE Minister
No.PER-02 / MBU / 02/2015 dated February 17, 2015.
148
ANNUAL REPORT 2018
Board Manual and Board Charter Duties and Responsibilities

In carrying out its duties, functions and responsibilities, The Board of Commissioners has the duties and
the Board of Commissioners refers to the provisions of responsibilities of overseeing the Company’s
the Company's Articles of Association, Board Manual, management policies, advising the Board of Directors,
and Board Charter. supervising the implementation of long-term plans, work
plans and budgets, the Articles of Association and the
In general, the Board of Commissioners Board Manual resolutions of the General Meeting of Shareholders
regulates the following: (GMS), and supervise that all regulations are applied
1. Board of Commissioners Function in accordance with the purposes and goals of the
2. Board of Commissioners Requirements and Company.
Composition, Membership and Term of Office
3. Introduction and Capability Enhancement Program The Board of Commissioners also has the obligations
4. Code of Conducts of:
5. Board of Commissioners Duties and Responsibilities 1. Complying with legislation, Articles of Association
6. Board of Commissioners Authorities and decisions of the GMS and to act in a
7. Board of Commissioners Rights professional manner.
8. Board of Commissioners Meetings 2. Performing supervisory duties of the Board of
9. Board of Commissioners' Performance Assessment Directors decisions in performing the role of
10. Supporting Organs the Company’s management, including the
11. Work Relationships between the Board of implementation of the Company’s LongTerm Plan,
Commissioners and Board of Directors Work Plan and Budget and the provisions of the
Articles of Association and decisions of the GMS
In addition to the Board Manual which governs and the applicable legislation.
the working relationship between all organs in 3. Providing advice to the Board of Directors
the Company particularly including the Board of in performing in the role of the Company’s
Commissioners and Board of Directors and their management and not intended for the benefit of
supporting organs, the Board of Commissioners also certain parties/groups.
has a Board Charter. The Board of Commissioners 4. Dividing tasks among members of the Board of
has established the Board Charter within the Board of Commissioners.
Commissioners through the Decision Letter of the Board 5. Conducting research, study and sign the
of Commissioners No.15/KPTS/K/DK/2014 dated Company’s LongTerm Plan, Work Plan and Budget
June 19, 2014. The document is evaluated annually in as has been prepared by the Board of Directors in
accordance with any changes to applicable regulations accordance with the Articles of Association.
and the requirements of the Company. From 2015 to 6. Setting out the Annual Work Program for the
mid November 2016 the guidelines were still in effect. Board of Commissioners and include this in the
On November 18, 2016, in order to conform with Company’s LongTerm Plan.
the recent demands and scope of work of the Board 7. Verifying periodic reports and the Annual Report as
of Commissioners, the Board of Commissioners felt prepared by the Board of Directors and sign off on
the need to adjust and re-establish the Board Charter the Annual Report.
within the Board of Commissioners through the Decision 8. Reporting to the Company regarding ownership
Letter of the Board of Commissioners No.012/KPTS/K/ and/or his/her family ownership in any other
DK/2016 which became effective from that date. company, including any amendments to ownership.
9. Proposing to the General Meeting of Shareholders
(GMS) the appointment of the External Auditor that
will audit the Company’s books.
149
SECURING ENERGY

10. Monitoring the effectiveness of Good Corporate Governance practices, including through the organization
of regular meetings between the Board of Commissioners and the Board of Directors in order to discuss the
implementation of Good Corporate Governance.
11. Carrying out other obligations within the framework of the duty of monitoring and providing advice, as long
as not condratictive to the legislation, Articles of Association and/or GMS decisions.
Board of Commissioners Independence

In carrying out its functions, the Board of Commissioners acts independently and is free from the interests of any
party.
The Company’s Board of Commissioners independence may also be seen from their share ownership and
concurrent positions, where there are no members of the Board of Commissioners who own shares in the Company
and other companies related to the Company, and do not hold concurrent positions in the company.
Sahala
Criteria of Tanri Arcandra Suahasil Alexander Ahmad Ego
Lumban
Independence Abeng Tahar Nazara Lay Bambang Syahrial
Gaol
Not a majority shareholder

or official at the institution of
the majority shareholder or √ × × × √ × ×
directly associated with the
majority shareholder
Not serving as a Director in

√ √ √ √ √ √ √
the Company or its affiliates
Has not worked in the

Company or its affiliates
√ √ √ √ √ √ √
within the last one year
period
Has no financial affiliation

directly or indirectly with
the Company or any
√ √ √ √ √ √ √
other company providing
services and products to the
Company and its affiliates.
Free from conflict of interest

and business activities or
other relationships that
may hinder or interfere
the ability of the Board of
√ √ √ √ √ √ √
Commissioners to act or
think independently within
the Company.
150
ANNUAL REPORT 2018
Board of Commissioners Independence may also be seen from concurrent positions of each member of the Board
of Commissioners in 2018 as follows:
Nama Internal Position External Position
President Commissioner/Independ-
Tanri Abeng Rector of Tanri Abeng University
ent Commissioner
Arcandra Tahar Vice President Commissioner Vice Minister of Energy and Mineral Resources
Sahala Lumban Gaol Commissioner Special Staff to SOE Minister
Suahasil Nazara Commissioner Head of Fiscal Policy Board at the Finance Ministry
Alexander Lay Independent Commissioner Special Staff of the State Secretariat Ministry
Deputy of Construction and Transportation Facilities and

Ahmad Bambang Commissioner
Infrastructure (KSPP) of SOE Ministry
Secretary General of the Energy and Mineral Resources

Ego Syahrial Commissioner
Ministry
Board of Commissioners Duties 2. Has carried out monitoring and evaluation of the
Implementation audit conducted by the Public Accounting Firm (KAP)
To support the Board of Commissioners duties in 2017, and has proposed the establishment of
implementation in 2018, the Board of Commissioners has KAP to audit PT Pertamina (Persero)'s 2018 Financial
carried out: Statements and PKBL Reports.
1. Meetings attended by the Board of Commissioners 3. Has conducted a study and responded to the
and the Committee are 2 times of GMS, 19 times proposed RKAP in 2018, 2018 Interim Report, 2017
of the Board of Commissioners' Joint Meeting with Financial Statement, 2017 Annual Report and 2017
the Board of Directors, 9 times of the Board of Sustainability Report, and LHEK and PSA62.
Commissioners Internal Meetings, and 69 times of 4. Has monitored and evaluated the Realization of
Committee Meetings. Achievement of the 2018 RKAP and Board of
2. The Board of Commissioners and the Committee Commissioners KPI in 2018, and provided advice /
have made work visits of 24 times in the country, direction to the Board of Directors as needed.
including RU-II Dumai, Sei Pakning & Fuel Terminal 5. Has conducted monitoring and evaluation, as well
Dumai, MOR I Medan, MOR II Palembang, MOR as provided direction to the Board of Directors, on
V Surabaya & Bali, MOR VII Makasar, RU V & several issues including those related to investment,
Balikpapan's RDMP Project. As well as working implementation of ICoFR & IFRS, asset management,
visits of 6 times abroad, among others, to Pertamina subsidiary management, and WBS.
projects in Algeria & Tanzania, USA, and Singapore.
The Board of Commissioners' Work Programs for
Concerning the important issues of the Board of supervision of Investment & Risk Management that has
Commissioners supervisory duties supported by been realized are:
Committees (Audit Committee, Nomination & 1. Has monitored and evaluated the performance of
Remuneration Committee, Risk Management Monitoring investment projects in the 2018 RKAP and subsequent
Committee), the Board of Commissioners consistently investment projects in 2018.
carries out supervision, including: 2. Monitoring and evaluating the performance of
operational activities and the implementation of
The Board of Commissioners work programs for Audit investments in the 2018 RKAP.
Supervision that has been realized are: 3. Monitoring and reviewing policies and
1. Has monitored and evaluated the realization of 2018 implementation of the Company's risk management in
Internal Audit performance and 2019 Plans, and an integrated manner.
provided necessary directives to the Board of Directors.
151
SECURING ENERGY

The Board of Commissioners Work Programs for supervision of Nomination and Remuneration that has been
realized are:
1. Proposing salary / honorarium for the Board of Directors and Board of Commissioners for 2018 and the
2017 Tantiem to be determined by the GMS.
2. Monitoring and evaluation, as well as giving approval / response to the proposed replacement of the
Directors - Commissioners of the Subsidiary and several strategic positions in the Directorate.
3. Monitoring and evaluation, as well as giving approval / responses to the issues related to the organization.
Board of Commissioners' Working Visit

In carrying out the supervisory function, the Board of Commissioners may conduct visits to the Company's
operational locations. In 2018, the Board of Commissioners conducts working visits as follows:
Table of the Board of Commissioners' Domestic Working Visits in 2018

No Date of Event Name of Member Activities
1 3 - 5 Apr 2018 Tanri Abeng Working Visit to MOR V of Bali and MOR VII of Makassar
2 9 - 11 Apr 2018 Tanri Abeng Attending the Indonesia Africa Forum in Nusa Dua Bali
Together with the Director of Retail PMS accompanying the Specific

3 25 Mei 2018 Arcandra Tahar Working Visit of the House of Representatives Commission VI to Makas-
sar
4 16 - 18 Jun 2018 Tanri Abeng Accompanying the Vice President of Indonesia on a visit in Makassar
Board of Commissioners' visit to Pertamina Balikpapan and PT Badak

5 11 - 13 Sep 2018 Tanri Abeng
NGL
6 11 - 12 Sep 2018 Ego Syahrial Board of Commissioners Official Visit to Pertamina Balikpapan
7 21 - 23 Sep 2018 Tanri Abeng Working Visit to Pertamina MOR V in Bali
Attended an invitation from the SOE Minister at the inauguration of the

8 2 - 3 Oct 2018 Sahala Lumban Gaol
2018 Indonesia Business & Development Expo at Grand City Surabaya
Tanri Abeng Attending the Board of Commissioners and Board Directors’ Joint Meet-
9 9 - 10 Oct 2018 Sahaka Lumban Gaol ing of PT Pertamina (Persero) at Patra Jasa Bali (ref. No. Und-105 / K /
Suahasil Nazara DK / 2018)
Working visit to the Farmer Empowerment Center (SPT) in Nglanggeran,

10 26 - 27 Oct 2018 Sahala Lumban Gaol
Yogyakarta
11 9 - 11 Nov 2018 Ahmad Bambang Official Visit to MOR V of Surabaya
12 11 - 12 Nov 2018 Tanri Abeng Working visit to MOR VII of Makassar
13 21 - 23 Sep 2018 Tanri Abeng Working visit to MOR V of Bali
14 24 - 25 Nov 2018 Tanri Abeng Working visit to MOR II of Palembang
Tanri Abeng
Arcandra Tahar
Sahala Lumban Gaol
15 5 - 8 Des 2018 Suahasil Nazara Board of Commissioners and Board of Directors Retreat in Bali
Alexander Lay
Ahmad Bambang
Ego Syahrial
16 17 - 18 Des 2018 Tanri Abeng As a Speaker of Internal Audit event in Bali
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ANNUAL REPORT 2018
Table of Overseas Board of Commissioners' Working Visit in 2018

No Date of Event Name of Member Activities
Tanri Abeng
Arcandra Tahar
Field Visits to Pertamina Projects in Algeria & Tanzania, and Meet-
1 2 - 8 Mar 2018 Suahasil Nazara
ings with M & P Management in Paris
Edwin Hidayat Abdullah
Alexander Lay
11 - 12 Mei 2018 Arcandra Tahar Discussions with Oil and Gas Companies in Singapore regarding
2
(Singapura) Alexander Lay Fuel Operation with the ISC Team
8 - 15 Mei 2018
3 Tanri Abeng Meetings with Lionsgate Group Ltd dated April 30, 2018
(New York, USA)
Attending a meeting with Datok Seri Anwar Ibrahim and Meeting

4 20 - 22 Jul 2018 Tanri Abeng
with the Turkish NOC
27 Sep - 3 Okt Attending a meeting with Qatar Gas & Qatar Fuel in Doha and a
5 Tanri Abeng
2018 meeting with Maurel and Prom in Paris
Attending a meeting with the President of the Republic of Indo-

6 14 - 15 Nov 2018 Tanri Abeng nesia and the President Director for the ASEAN Summit event in
Singapore
Board of Commissioners Decision submitted by the Board of Directors to the Board

Making Mechanism of Commissioners in writing accompanied by all
Referring to Decree of the Board of Commissioners supporting documents in full for circular decisions.
No.012 / KPTS / K / DK / 2016 dated November
18, 2016 concerning the Board of Commissioners Board of Commissioners' Approval of
Board Charter, Part VII. Working Mechanism, Letter A. Material Transactions
Decision Making, the main points are as follows: During 2018, several transactions or actions carried
1. Decision making through a Board of out by the Board of Directors that require written
Commissioners meeting: approval / response from the Board of Commissioners
a. Decision making procedures must meet the in accordance with the Articles of Association of Article
provisions of decision making in the Board 11 Paragraphs 8 and 10, are as follows:
of Commissioners' Meeting (among others:
provisions relating to attendance quorum, use Transaction / Actions of the
No Total
of power of attorney). Board of Directors
b. Decisions made at the Board of Taking over / Releasing of Participating

1 2
Interest in Oil and Gas Working area
Commissioners 'meetings are set forth in
Minutes of the Board of Commissioners' Taking over / Releasing of shares in
2 a Subsidiary / Joint Venture / Other 6
Meetings or Decisions or Letters or Company
Memorandum signed by the Commissioners
Equity Participation / Additional Equity
present at the meeting. 3 Participation in a Subsidiary / Joint 8
2. Circular decision-making is stated in the form of Venture
a Decree or Minutes or Letter or Memorandum 4

Management of Oil and Gas Oil and
11
Gas Working area
signed by the Commissioner.
Replacement of Directors and
5 46
Commissioners of Subsidiaries
The Board of Commissioners shall make a decision
Writing-off/ Releasing/ Optimizing
in accordance with the standard time set. Standard 6 12
Company Assets
time ranges from 7 days (good) and up to 14
Establishment / Liquidation of
days (sufficient) and may not exceed the 30 day 7 5
Subsidiaries
deadline as mandated in the Company’s Articles of
8 The Company’s Organization Structure 2
Association, starting from the proposal submitted
9 Global Bond / Financing 1
at the Board of Commissioners' Meeting or
153
SECURING ENERGY

Board of Commissioners Meetings Board of Commissioners Competence

The Board of Commissioners' meetings consist of Enhancement
an Internal Meetings and Joint Meetings with the
Board of Directors. Throughout 2018, the Board of As a manifestation of ongoing learning, the Board
Commissioners held 9 (nine) Internal Meetings and 19 of Commissioners annually conducts competence
(nineteen) Joint Meetings with the Board of Directors. development programs that aim to improve
the knowledge / competence of the Board of
Commissioners.
Introduction Program for New
Commissioners Throughout 2018 the training, seminars and education
Provisions regarding the Introduction Program for that the Board of Commissioners had participated in
New Commissioners are regulated in the Regulation were as follows:
of SOE Minister No.PER-01 / MBU / 2011 dated
August 01, 2011 jo. No. PER-09 / MBU / 2012 Table of Training Program for Competence Development
dated July 6, 2012 concerning the Implementation for the Board of Commissioners members in 2018
of Good Corporate Governance in SOE and Decree Name
of Board of Commissioners No.012 / KPTS / K / No Date of BOC Activities
Member
DK / 2016 dated November 18, 2016 concerning
Training from
the Board of Commissioners Board Charter of PT
Stanford University
Pertamina (Persero). The introduction program for Mr. - USA on Executive
Arcandra
Ego Syahrial was held on July 6, 2018 and Mr. Ahmad 9 - 15 Jul Education "Stanford
1 Tahar Alex-
2018 Design Thinking
Bambang was held on September 10, 2018. ander Lay
Bootcamp: From
Insights to Innova-
tion"
154
ANNUAL REPORT 2018
INDEPENDENT COMMISSIONER
Independent Commissioners are members of the Board Criteria of Appointment

of Commissioners who have no financial, management, Independent Commissioners are members of the Board
share ownership and/or family affiliations with of Commissioners who have no financial, management,
members of the Board of Commissioners, members of share ownership and/or family affiliations with
the Board of Directors and/or controlling shareholder or members of the Board of Commissioners, members of
relationship with the Company, which may affect their the Board of Directors and/or controlling shareholder or
ability to act independently. The criteria for determining relationship with the Company, which may affect their
an Independent Commissioner refers to the Regulation ability to act independently. The criteria for determining
of the Minister of SOE no. PER-01/MBU/2011 dated an Independent Commissioner refers to the Regulation
August 01, 2011, regarding the Implementation of of the Minister of SOE no. PER-01/MBU/2011 dated
Good Corporate Governance in SOEs, Article 13 August 01, 2011, regarding the Implementation of
paragraphs 3 and 4. Good Corporate
Governance in SOEs, Article 13 paragraphs 3 and 4.
An Independent Commissioner is committed to highly
upholding independence, objectivity and justice in Independence Statement
performing his roles and responsibilities, through
avoiding any decisions and policies which may An Independent Commissioner is committed to highly
potentially give rise to a possible conflict of interest or upholding independence, objectivity and justice in
preference towards the interest of one particular party. performing his roles and responsibilities, through
avoiding any decisions and policies which may
Based on Regulation of SOE Minister No. PER-01 / potentially give rise to a possible conflict of interest or
MBU / 2011 dated August 1, 2011 concerning the preference towards the interest of one particular party.
Implementation of Good Corporate Governance in Independent Commissioners must also maintain the
SOE, the composition of Independent Commissioners at Company’s reputation through the implementation of the
least 20% of the Company’s total Commissioners. principles of GCG in accordance with the prevailing
guidelines and regulations, as reflected in the behavior,
Composition and Legal Basis of actions, and any policies made, both individually and
Appointment collectively.
Composition of Independent Commissioner refers to the
Regulation of the Minister of SOEs. PER-01/MBU/2011
dated 1st August 2011, regarding the Implementation
of Good Corporate Governance in State-Owned
Enterprises at least as much as 20%. Through the
Decree of SOE Minister at the General Meeting of
Shareholders of PT Pertamina (Persero), as stipulated in
Decree no. 254/MBU/11/2016 dated November 14,
2016, appointed Tanri Abeng (President Commissioner)
as an Independent Commissioner and SK No.142
/ MBU / 05/2018 dated May 30, 2018 stipulates
Alexander Lay as an Independent Commissioner. His
profile has been included in the Board of Commissioners
Profile. Thus, the provisions of 20% composition have
been fulfilled.
155
SECURING ENERGY
BOARD OF DIRECTORS

The Board of Directors is responsible for the interests and management of the Company's business so that it may
generate added value and ensure business sustainability by taking into account the interests of stakeholders with
the Company's activities. Each member of the Board of Directors carries out their duties and generates decisions in
accordance with the division of duties and authority based on the Articles of Association and applicable laws and
regulations.
BOARD OF DIRECTORS Composition

Legal Basis of Appointment
No Name Position Domicile
Decree of SOE Minister as GMS
Decree of SOE Minister Number: SK - 97 / MBU /

President Director 04/2018, April 20, 2018 concerning Dismissal and
1 Nicke Widyawati Jakarta
Appointment of PT Pertamina (Persero) Board of Directors
Members.

Dharmawan H. Upstream Director 04/2018, April 20, 2018 concerning Dismissal and
2 Jakarta
Samsu Appointment of PT Pertamina (Persero) Board of Directors
Members.

04/2018, April 20, 2018 concerning Dismissal and
3 Budi Santoso Syarif Refinery Director Jakarta
Members.

Corporate Market- 04/2018, April 20, 2018 concerning Dismissal and
4 Basuki Trikora Putra Jakarta
ing Director Appointment of PT Pertamina (Persero) Board of Directors
Members.

Retail Marketing 04/2018, April 20, 2018 concerning Dismissal and
5 Mas’ud Khamid Jakarta
Director Appointment of PT Pertamina (Persero) Board of Directors
Members.

09/2018, September 13, 2018 concerning Dismissal and
6 Pahala N. Mansury Finance Director Jakarta
Members.

Logistics, Supply
04/2018, April 20, 2018 concerning Dismissal and
7 Gandhi Sriwidodo Chain and Infrastruc- Jakarta
ture Director
Members.

Megaproject Refin-
Ignatius Tallulem- 09/2018, September 13, 2018 concerning Dismissal and
8 ery and Petrochemi- Jakarta
bang Appointment of PT Pertamina (Persero) Board of Directors
cal Director
Members.

Planning, Investment
09/2018, September 13, 2018 concerning Dismissal and
9 Heru Setiawan and Risk Manage- Jakarta
ment Director
Members.
156
ANNUAL REPORT 2018
Legal Basis of Appointment
No Name Position Domicile
Decree of SOE Minister as GMS

Human Capital 04/2018, April 20, 2018 concerning Dismissal and
10 Koeshartanto Jakarta
Members.

Asset Management 04/2018, April 20, 2018 concerning Dismissal and
11 M. Haryo Yunianto Jakarta
Members.
Duties and Authorities of Each Member Upstream Director

of the Board of Directors 1. Managing, optimizing and developing upstream
businesses including geothermal through increasing
The Board of Directors is a governance organ reserves and production in an integrated manner
responsible for the management of the Company in nationally and internationally in accordance
the interests and purposes of the Company. The Board with the principles of good oil engineering and
of Directors is tasked with determining the direction of operation best practices.
the Company’s objectives, establishing its policies and
efforts to achieve them. The duties and authorities of Refinery Director
each member of the Board of Directors are as follows: 1. Developing engineering and technology through
research that is integrated with the business master
President Director: plan to support competitiveness and the company’s
1. As the Chief Executive Officer, providing guidelines business sustainability.
and maintaining the policies pertaining to vision, 2. Developing, optimizing and managing
mission and strategies of the Company. Megaprojects in accordance with the master plan
2. Leading Board of Directors members in the and business development of the company in
implementation of the Board of Directors decisions. an integrated manner in accordance with GCG
3. Organizing and leading the Board of Directors principles and good engineering best practices.
Meetings in accordance with the Articles of 3. Building the capability of strategic project
Association management according to the standards of best
4. Determining the decisions to be made in the event practices.
of any equal voting results in the Board of Directors
meetings. Corporate Marketing Director
5. On behalf of the Board of Directors, approving all 1. Developing strategies and optimizing market
Decision Letters of the Board of Directors/President segmentation effectively
Director based on the type of decisions defined 2. Managing, optimizing and developing the business
under the Articles of Association or any other of marketing and product sales including market
requirements. development, B2B-oriented business expansion
6. On behalf of the Board of Directors, assigning
employees or other parties to represent the
Company both in court and out of court.
7. Leading and encouraging the establishment of
corporate values, image improvements, and Good
Corporate Governance.
157
SECURING ENERGY
Logistics, Supply Chain, and through market development and accelerating

Infrastructure Director the commercialization of the NRE business in
1. Planning the development of logistics infrastructure supporting the company's business sustainability.
and supply chain to meet the market demand 5. Managing Quality, System, Knowledge &
2. Planning and managing all activities of supply and Integrated Loss Management to support the
distribution of products in accordance with the company's operations and efficiency.
needs of domestic demand
3. Planning and carrying out the operation and Finance Director
maintenance of the infrastructure needed for the 1. Managing and optimizing financial resources
supply and distribution of products prudently, efficiently and adding value to support
the business and work plan of the company.
Megaproject, Refinery, and 2. Optimizing the company's financial management
Petrochemicals Director effectively and accountably.
1. Managing, optimizing, and developing the refinery 3. Optimizing and developing the company's
and petrochemical business in an integrated business through business synergy and integration
manner with a focus on reliability and operational and management of AP / JV
efficiency in accordance with the principles of 4. Ensuring and controlling the Company’s health
good oil engineering and operation best practices. in accordance with accounting standards and
financial best practices.
Planning, Investment, and Risk 5. Optimizing and developing information technology
Management Director to support the company's business
1. Developing a strategy and business plan for the Human Capital Director
company to become a reference for short, medium 1. Managing and developing human capital to
and long term work goals. support the company's business strategy and
2. Reviewing and evaluating investment plans and operations.
the company's business portfolio in accordance 2. Managing and developing talent & human capital
with business principles and risk management in infrastructure to support the Company’s business
supporting the competitiveness and the company’s strategy and operations with high productivity.
business sustainability.
3. Developing engineering and technology through Asset Management Director
research that is integrated with the business master 1. Developing strategies and management of business
plan to support competitiveness and the company’s support assets optimally, efficiently and providing
business sustainability. added value to the Company.
4. Managing, optimizing and developing the 2. Managing, optimizing and integrating Pertamina
gas, power and New & Renewable Energy Group procurement processes.
(NRE) businesses in an integrated manner
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ANNUAL REPORT 2018
Board of Directors Independence
In carrying out its duties and responsibilities, the Board of Directors acts independently and is free from the interests
of any party as this may also be seen from the share ownership of the Board of Directors members within the
Company or concurrent positions as the Board of Directors members in the Company.
The following table shows the Board of Directors Independence in the Company:
Budi Basuki
Criteria of Nicke Dharmawan Mas’ud Pahala N. Ignatius Heru M. Haryo
Santoso Trikora Koesartanto
Independence Widyawati H. Samsu Khamid Mansury Tallulembang Setiawan Yunianto
Syarif Putra
Not a majority share-

holder or official at
the institution of the
majority shareholder √ √ √ √ √ √ √ √ √ √
or directly associ-
ated with the major-
ity shareholder.
Not serving as a
Director in the Com- √ √ √ √ √ √ √
√ √ √
pany or its affiliates
Has not worked in

the Company or its
√ √ √ √ √ √ √
affiliates within the
√ √ √
last one year period
Having no financial
affiliation directly
or indirectly with
the Company or
any other company √ √ √ √ √ √ √ √ √ √
providing services
and products to the
Company and its
affiliates.
Free from conflict

of interest and
business activities or
other relationships
that may hinder or
√ √ √ √ √ √ √ √ √ √
interfere the ability
of the Board of Di-
rectors to act or think
independently within
the Company.
159
SECURING ENERGY
REMUNERATION POLICY FOR
THE BOARD OF COMMISSIONERS
AND BOARD OF DIRECTORS
Disclosure of Procedures, Indicators d. Honorarium of the Vice President

and Basis of Remuneration Commissioner represents 42.5% of the
Determination President Director’s salary.
The procedures and indicators for the determination for e. Honorarium of the Board of Commissioners
the remuneration of the Board of Commissioners and members represents 90% of the President
the Board of Directors are fully conducted by the SOE Commissioner’s honorarium.
Ministry and are not under the Company’s authority. 2. Allowance
The basis for determining the remuneration of the For members of the Board of Directors, the
Board of Commissioners and the Board of Directors allowances received include religious holiday
refers to the Regulation of SOE Minister No.PER-04 allowance, housing allowance, and post retirement
/ MBU / 2014 jo No.PER-01 / MBU / 06/2017 jo allowance. As for members of the Board of
No.PER-06 / MBU / 06/2018 concerning Guidelines Commissioners, the allowances received include
for Determining Income of Directors, Board of religious holiday allowance, transportation
Commissioners, and Supervisory Board of State-Owned allowance, and post retirement allowance.
Enterprises and Decree of SOE Minister SK-148 / MBU 3. Facilities
/ 05/2018. Facilities received by members of the Board of
Directors include vehicle, health benefits, and
The amount of remuneration is stipulated in the Letter of legal assistance. As for members of the Board of
Deputy of Mining, Strategic Industry and Media Affairs Commissioners facilities received include health
on behalf of the SOE Minister No.SR-605 / MBU / D3 benefits and legal assistance.
/ 06/2018 concerning Submission of Determination of 4. Tantiem/Performance Incentives
PT Pertamina (Persero) Board of Directors and Board of For the provisions in granting this tantiem, refer to
Commissioners Income in 2018. the Ministerial Regulation.
Structure and Components of The structure and components of remuneration received

Remuneration by the Board of Commissioners and the Board of
The remuneration structure and components provided Directors of Pertamina do not facilitate a performance
to the Board of Commissioners and Board of Directors bonus, non-performance bonus, and/or stock options
consist of salary/fees, allowance, facility, and bonus/ for each member of the Board of Commissioners and
performance incentive. Board of Directors.
1. Salary
a. The salary of the President Director is
determined by using the internal guidelines
issued by the SOE Ministry as the GMS of PT
Pertamina (Persero).
b. The salary of the Board of Directors other
members is determined based on position,
which represents 85% of the President
Director’s salary.
c. Honorarium of the President Commissioner
represents 45% of the President Director’s
salary.
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ANNUAL REPORT 2018
AFFILIATION OF THE BOARD OF COMMISSIONERS,
BOARD OF DIRECTORS AND
CONTROLLING SHAREHOLDERS
All members of the Board of Commissioners do not have any affiliation in terms of family or financial matters with
other members of the Board of Commissioners, members of the Board of Directors and Shareholders. All members
of the Board of Directors also do not have any affiliation both in terms of family and financial matters with other
members of the Board of Directors, members of the Board of Commissioners and Shareholders.
Family Affiliation Business Affiliation

Description Board of Board of Board of Board of
Shareholders Shareholders
Commissioners Directors Commissioners Directors
Board of Commissioners
Tanri Abeng x x x x x x
Arcandra Tahar x x x x x x
Sahala Lumban Gaol x x x x x x
Suahasil Nazara x x x x x x
Alexander Lay x x x x x x
Ahmad Bambang x x x x x x
Ego Syahrial x x x x x x
Board of Directors
Nicke Widyawati x x x x x x
Dharmawan H. Samsu x x x x x x
Budi Santoso Syarif x x x x x x
Basuki Trikora Putra x x x x x x
Mas’ud Khamid x x x x x x
Pahala N. Mansury x x x x x x
Gandhy Sriwidodo x x x x x x
Ignatius Tallulembang x x x x x x
Heru Setiawan x x x x x x
Koeshartanto x x x x x x
M. Haryo Yunianto x x x x x x
161
SECURING ENERGY
DIVERSITY OF THE BOARD OF COMMISSIONERS
AND BOARD OF DIRECTORS COMPOSITION
Pertamina has no policy in determining the diversity However, the composition of the Board of
of the Board of Commissioners and Board of Directors Commissioners and Board of Directors members in
members’ composition. The authority to determine the 2018 from the aspect of expertise has a variety of
diversity of composition is the Government's right as the educational backgrounds in the fields of engineering,
Shareholder. management, finance and business that may support
the Company's business activities. From aspects such
At present, the composition of Pertamina's Board as career and work experience, each member of the
of Commissioners and Board of Directors members Board of Commissioners and Board of Directors has a
includes a diversity of areas of expertise, education different career development path, such as in the fields
and experience related to Pertamina's main activities, of oil and energy, education, banking, and information
finance, economics and corporate governance. technology, both private and government. In terms of
age, members of the Board of Commissioners and
Board of Directors also have different age ranges.
AUDIT COMMITTEE
Profile of Audit Committee Members
Name Agus Yulianto
Position Member
Nationality Indonesian
Age 57 years old
Domicile South Tangerang
Legal Basis of Appointment Decree of the Board of Commissioners No. 023 / KPTS / K / DK / 2015
Education
• Master of Accountancy, Case Western Reserve University, Cleveland OH, USA
(1993).
• Diploma IV in Accounting from the State College of Accountancy in Jakarta (1991)
Working Experience • Audit Committee Member of PT Telkom Tbk, in 2010-2015

• Whistle Blower Protection Officer (WPO) in 2010-2015
• Head of Financial Management Specialist, Multi Donor Fund and World Bank in Aceh
(2009-2010).
• Internal Audit Consultant and Training Service Provider in Financial Accounting and
Internal Auditing. year 2000 – 2009
• Working at the Financial and Development Supervisory Agency (BPKP) (1993-1999)
Affiliation Has no affiliation with members of the Board of Commissioners, Board of Directors and
Controlling Shareholders.
162
ANNUAL REPORT 2018
Name Bonar Lumban Tobing
Position Member
Age 59 years old
Domicile Bekasi
Legal Basis of Appointment Decree of the Board of Commissioners No.023 / KPTS / K / DK / 2015
Education • MBA programs majoring in Finance at Business School of Rutgers The State University
of New Jersey, USA (1993)
• Bachelor of Economics Faculty of Accounting, University of Indonesia (1986)
Working Experience • SVP-Dean of Retail Banking Academy - Mandiri University (2013-2015)

• SVP - Regional CEO at PT Bank Mandiri (Persero) (2009-2012)
• VP- Deputy Regional CEO at PT Bank Mandiri (Persero) (2009)
• VP-Area Manager, at PT Bank Mandiri (Persero) (2005-2008)
Name Dwi Martani
Position Member
Age 48 years old
Domicile Depok, West Java
Legal Basis of Appointment Decree of the Board of Commissioners No. 023 / KPTS / K / DK / 2015
Education • Doctorate in Financial Sciences, University of Indonesia (2004)

• Bachelor of Accounting, University of Indonesia (1993
Working Experience • Accounting Lecturer at the Faculty of Economics and Business, University of Indonesia
(1996-present)
• Deputy Chairman of the Government Accounting Standards Committee (2018-present)
• Audit Committee Member of PT Adhi Karya (Tbk) (2005-2007)
• Audit Committee Member of LPP TVRI (2008-2011)
Tanri Abeng / Audit Committee Chairman

His profile is presented in the Board of Commissioners Profile in this Annual Report
Sahala Lumban Gaol / Vice Chairman concurrently member

His profile is presented in the Board of Commissioners Profile in this Annual Report
Ahmad Bambang - Vice Chairman concurrently Member

His profile is presented in the discussion of the Board of Commissioners Profile in this Annual Report.
163
SECURING ENERGY
AUDIT COMMITTEE

Information of Concurrent Position Long-Term Plan, and the Company’s Work and
Information regarding the concurrent positions of Budget Plan, as well as other management and
members of the Audit Committee from members of information reports.
the Board of Commissioners can be viewed in the 7. Conducting a review regarding the Company’s
Concurrent Position Information for the Board of compliance towards the laws and regulations in
Commissioners. All members of the Audit Committee relation to the Company’s activities.
who do not serve as Commissioners do not have 8. Conducting a review and follow-up regarding any
external concurrent positions outside Pertamina complaints in relation to the Company.
containing any possible conflicts of interest. 9. Studying the adequacy of the Internal Audit
function, including the number and competency
Independence of auditors, Annual Work Plan and completed
In performing its duties and responsibilities, all members assignments.
of the Audit Committee are committed to upholding the 10. Studying the adequacy of the External Audit
principles of Good Corporate Governance practices implementation, which includes audit planning and
by being objective, professional, and independent. number of auditors.
The Audit Committee will not take any decisions under 11. Conducting a review regarding the independence
pressure and/or intervention from any party and are and objectivity of the Public Accountant that will
committed to avoid any conflict of interest. Therefore, perform the audit on the Company’s financial
all members of the Audit Committee have no affiliation statements and other financial activities.
both regarding kinship and business affiliation with 12. Conducting a review regarding the adequacy
members of the Board of Commissioners and members in the examination performed by the Public
of the Board of Directors. Accountant to ensure that all important risks have
been carefully considered.
Duties and Responsibilities 13. Conducting a review regarding community
Audit Committee Duties and Responsibilities: complaints and to monitor the implementation of
1. Assisting the Board of Commissioners to ensure the whistleblowing system.
the effectiveness of the internal control system and 14. Performing other duties assigned by the Board of
the effectiveness of the implementation of external Commissioners.
auditor and internal auditor duties.
2. Assessing activities related to implementation and Audit Committee Meeting
audit findings performed by the Internal Audit or The Audit Committee holds periodic meetings internally
External Auditor. to complete the Committee Work Program and conduct
3. Providing recommendations concerning the coordination meetings with other committees under the
improvement of the management control systems Board of Commissioners supervision.
and implementation.
4. Ensuring that there is a satisfactory review Throughout 2018, the Audit Committee held 53
procedure towards the information related to the (fifty three) meetings both internally and invited the
Company’s Financial Statements. management as illustrated in the following table:
5. Identifying matters requiring attention from the
Commissioners.
6. Conducting a review regarding the Company’s
164
ANNUAL REPORT 2018
NOMINATION AND REMUNERATION COMMITTEE
Attendance
Name Position Joint Meeting with
Internal Meeting
Directorate
Tanri Abeng Committee Chairman 0 1
Sahala Lumban Gaol Committee Vice Chairman 4 11
Ahmad Bambang Member 0 0
Agus Yulianto Member 4 48
Bonar Lumban Tobing Member 4 48
Dwi Martani* Member 2 18
Information :
*She has resigned on April 30, 2018

Profile of the Nomination and Remuneration Committee Members
Suahasil Nazara / Committee Chairman

His profile is presented in the discussion of the Board of Commissioners profile
Tanri Abeng / Committee Vice Chairman

Ego Syahrial – Committee Vice Chairman concurrently Member

Name Apep Fajar Kurniawan
Position Member
Age 35 years old
Domicile Tangerang
Legal Basis of Appointment Decree of the Board of Commissioners No.023 / KPTS / K / DK / 2015.
Education • Doctor of Management in Governmental Science from University of Satyagama (2014)

• Student of the Doctoral Program in Political Science, University of Indonesia (2013-present)
• Postgraduate Program (Master of Science in Intelligence Strategy) University of Indonesia
(2009)
• Bachelor of Theology, Interpretation of Ushuluddin Faculty Hadith (2006)
• Bachelor of Philosophy from the State Islamic University (2006)
Working Experience • President Director of PT Melia Samudera Khatulistiwa (2014-2017)

• Corporate Relations Director “The Leader Magazine’s Corporate Affair” (2014-2017)
• Director of the Indonesian Student and Youth Forum (2011-2015)
• Commissioner of PT Trisula Energi (2013-2014)
• Operations Director of PT Lintas Strategy Indonesia (2012-2013)
• Marketing Communication Manager of PT RM Book (2010-2012)
• Co-Founder / Founding Team and Vice Rector of Tanri Abeng University (2010-2012)
• Program Director of the Center for the Study of Religion and Civilization (2006-2009)
• Member of the National Steering Committee - People’s Election Monitoring Network (JPPR)
(2002-2004
Affiliation Has no affiliation with members of the Board of Commissioners, Board of Directors and Con-
trolling Shareholders
165
SECURING ENERGY

Independence 3. Studying the effectiveness regarding the Nomination

All members of the Nomination and Remuneration and Remuneration policies.
Committee commit to uphold practices of Good 4. Providing reference of materials and information for
Corporate Governance by being professional, objective, the Board of Commissioners related to the Company’s
and independent. The Nomination and Remuneration Nomination and Remuneration activities.
Committee will not make decisions under pressure nor 5. Providing input and recommendations concerning the
have intervention from any other party and are committed Board of Directors reports regarding activities of the
to avoiding any conflicts of interest. Therefore, all Nomination and Remuneration committee.
members of the Nomination and Remuneration Committee 6. Providing a review and strategic suggestions as
do not have any relationship affiliations, either, through well as monitoring the implementation of GCG
family or business affiliation, with other members of Board in the Company, including with regards to the
of Commissioners and members of Board of Directors. periodic implementation of GCG assessment by an
independent assessor, whistleblowing implementation
Duties and Responsibilities and any matters related to the Company’s
The duties and responsibilities of the Nomination and compliance with the provisions of applicable laws
Remuneration Committee are as follows: and regulations.
1. Carrying out evaluation regarding the planning 7. Generating an Annual Work Plan for the Nomination
activities of the Company’s Nomination and and Remuneration Committee.
Remuneration Committee and other activities 8. Performing other tasks assigned by the Board
in accordance with the Minutes of Agreement of Commissioners related to activities involving
of the Board of Commissioners regarding Job Nomination and Remuneration as well as other
Distribution between Committees under the Board of specific tasks.
Commissioners. 9. Reporting the Nomination and Remuneration
2. Monitoring the implementation of activities regarding Committee’s work results to the Board of
the Company’s Nomination and Remuneration Commissioners.
Committee and other activities in accordance with 10. The Nomination and Remuneration Committee also
the Minutes of Agreement of Board of Commissioners carries out other duties and responsibilities of the
regarding Job Distribution between the Committees Board of Commissioners and assists other Committees
within the Board of Commissioners.
Nomination and Remuneration Committee Meeting

Throughout 2018, the Nomination and Remuneration Committee held 12 (twelve) meetings both internally and invited
the management as illustrated in the following table:
Attendance
Internal Meeting
Directorate
Suahasil Nazara Committee Chairman 0 2
Tanri Abeng Committee Vice Chairman 1 4
Ego Syahrial Member 0 2
Apep Fajar Kurniawan Member 1 11
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ANNUAL REPORT 2018
RISK MANAGEMENT MONITORING COMMITTEE
Profile of the Risk Management Monitoring Committee’s Members
Arcandra Tahar / Committee Chairman

Sahala Lumban Gaol / Committee Vice Chairman

Alexander Lay / Committee Vice Chairman

Name Yusuf Didi Setiarto
Position Member
Age 45 years old
Domicile Jakarta
Education Faculty of Law, University of Indonesia in Jakarta (1994-1999).
Working Experience Associate Lawyer in Indrawan Heisky & Partner (1999), Associate Lawyer in Wiriadinata &
Widyawan (2000-2003), Legal Division of BPMIGAS / SKK MIGAS (2003-2012), and Divi-
sion Head of Legal Consideration and Formality of SKK Migas (2013-2015).
Controlling Shareholders
Name Poerwo Tjahjono
Position Member
Age 62 years old
Domicile Jakarta
Legal Basis of Appointment Decree of the Board of Commissioners No.023 / KPTS / K / DK / 2015
Education Faculty of Economics, majoring in Accounting, University of Padjadjaran - Bandung (1984)

and Undergraduate Program majoring in Management Sciences, University of Gadjah Mada
(1999).
Working Experience His career in Pertamina started as an employee in 1986 through the Accounting Under-
graduate Program in 1985, Finance Staff of Pertamina Kalimantan Area (1992), Head of
Regional Finance Operations EP Sangatta (1995), Manager of ERP Development (2005)
and formerly a member of the SAP Implementation Project. In 2006 he was the Head of the
Control Division, then as Vice President of Financial Downstream (2007), Vice President of
Strategic Planning (2008) and Senior Vice President Controller (2011). Staff for Retirement
Preparation (2012) and in June 2012 as Member of the Audit Committee of PT Pertamina
Upstream Energy through to mid 2015.
167
SECURING ENERGY

Name Averrouz Mostavan
Position Member
Age 37 years old
Domicile Jakarta
Education • Bachelor Degree in Geophysical Engineering from ITB – Bandung

• Postgraduate majoring in Applied Geophysics from TU Delft, The Netherlands
Working Experience • QC Geophysicist - PGS. Offshore New Zealand, North Sea (Norwegian and UK Sectors)
and West of Shetland (2009),
• Sales Supervisor - PGS, Jakarta and Singapore (2009-2010),
• Geophysicist - PGS, Singapore (2010-2012),
• Senior Geophysicist - PGS. Singapore (2012-2014),
• Senior Geophysicist - PGS, Houston, Texas, USA (2014-2018)
Committee Independence
All members of the Risk Management Monitoring Committee are committed to upholding the practices of Good
Corporate Governance by being professional, objective, and independent. The Risk Management Monitoring
Committee will not make decisions under pressure nor have interventions from any party and are committed to
avoiding any possible conflicts of interest. Therefore, all members of the Risk Management Monitoring Committee
do not have any affiliation, either through family or business with other members of the Board of Commissioners
and members of the Board of Directors.
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ANNUAL REPORT 2018
Duties and Responsibilities

The duties of the Risk Management Monitoring Committee are as follows:
1. Evaluating the planning of upstream-downstream activities (RJPP/CBP).
2. Monitoring the implementation of upstream-downstream activities of the Company under the Work Plan or
Budget (RJPP/CBP) and the analysis of results regarding the upstream downstream activities of the Company.
3. Evaluating the planning of upstream-downstream investment activities and that the risk levels are measurable
and aligned with strategy and economy.
4. Evaluating the implementation of investment activities in the upstream downstream activities and an analysis of
investment results.
5. Reviewing the effectiveness regarding the implementation of investment policy for the upstream-downstream
activities and the Company’s management from a Risk Management perspective.
6. Providing reference materials and information for the Board of Commissioners related to upstream-downstream
activities of the Company.
7. Providing input and recommendations on the Board of Directors' report regarding the Company's upstream-
downstream activities.
8. Preparing an Annual Work Plan for the Risk Management Monitoring Committee.
9. Performing other duties assigned by the Board of Commissioners related to the upstream-downstream activities
of the Company.
10. Reporting the results of Work Plan of the Committee to the Board of Commissioners.
11. Other tasks and responsibilities of the Risk Management Monitoring Committee are performing any other
assignments issued by the Board of Commissioners as well as assisting other committees.
Risk Management Monitoring Committee Meeting

In 2018, the Risk Management Monitoring Committee held an Internal Meeting and Joint Meeting with the
management of 5 (five) times.
Attendance
Internal Meeting
Directorate
Arcandra Tahar Committee Chairman 0 5
Committee Vice Chairman /

Sahala Lumban Gaol 0 2
Member
Committee Vice Chairman /

Alexander Lay 0 4
Member
Yusuf Didi Setiarto Member 0 4
Poerwo Tjahjono Member 0 5
Averrouz Mostavan Member 0 1
169
SECURING ENERGY
SECRETARY TO THE BOARD OF COMMISSIONERS

Profile of Secretary to the Board of Commissioners
Name Yuki Indrayadi
Position Secretary to the Board of Commissioners
Age 46 years old
Domicile Jakarta
Legal Basis of Appointment Decree No. 003 / KPTS / K / DK / 2016
Education • Faculty of Industrial Engineering ITB, Bandung (1996),

• Katholieke Universiteit Leuven, Belgium (M.Eng - 1998)
• Katholieke Universiteit Leuven, Belgium (Ph.D - 2002).
Working Experience • Independent Committee Member of PT Semen Indonesia Tbk (2013-2016),

• Secretary to the Board of Commissioners of PT Telkom Indonesia Tbk (2008-2013),
• Managing Director of PT Quant Capital Management - Jakarta (2008),
• SVP Research of PT Infinite Global Kapital, Jakarta (2007-2008)
• Field Engineer of Schlumberger Wireline & Testing (1996-1997).
Affiliation Has no affiliation with members of the Board of Commissioners, Board of Directors and Con-
trolling Shareholders
Duties and responsibilities 6. Performing other duties assigned by the Board of

The duties of the Secretary to the Board of Commissioners Commissioners.
are as follows: 7. Ensuring that the Board of Commissioners complies with
1. Preparing the Board of Commissioners meetings, all laws and regulations as well as complies with the
including meeting materials (briefing sheet). principles of GCG.
2. Recording the Minutes of the Board of Commissioners 8. Providing information required by the Board of
Meetings in accordance with the Articles of Association. Commissioners periodically and/or at any time as
3. Administering the Board of Commissioners documents, requested.
including incoming letters, outgoing letters, minutes of 9. Coordinating members of Committees, if necessary, in
meetings and other documents. order to expedite the Board of Commissioners duties.
4. Preparing drafts of Work Plan and Budget for the Board 10. As a liaison officer for the Board of Commissioners and
of Commissioners. other parties.
5. Preparing draft of reports for the Board of 11. Ensuring that the documents of organizational
Commissioners. activities in the Board of Commissioners circle are well
maintained in the Company.
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ANNUAL REPORT 2018
CORPORATE SECRETARY
PROFIL OF THE CORPORATE SECRETARY
Name Syahrial Mukhtar
Position Corporate Secretary
Age 52 years old
Domicile Jakarta
Legal Basis of Appointment Decision Letter No. Kpts.P-028 / C00000 / 2017-S8
Education • Bachelor Degree of Industrial Engineering, Bandung Institute of Technology (1985-

1990)
• Master of Management, International Department of Business, University of Gadjah
Mada (1998-2000)
• Doctor of Management Strategic, Postgraduated in Management Faculty of Economic,
University of Indonesia (2005-2011)
Working Experience • Technical Expert & Strategic Advisor Financial, PT Pertamina (Persero) (2015-2016)
• Vice President of Corporate Internal Audit, PT Pertamina (Persero) (2014-2015)
• Head of Internal Audit, Pertamina Drilling Service Indonesia (2013-2014)
• Business Strategic Planning Manager, PT Pertamina (Persero) (2012-2013)
• Management Business and Information Data Manager, PT Pertamina (Persero) (2010-
2011)

The Corporate Secretary has the following duties and responsibilities:
1. Determining and establishing corporate communication strategies both inside and outside, including but
not limited to the management of media communication activities, management of corporate brands, and
company internal communication to form and enhance Pertamina's image and reputation in the eyes of
stakeholders.
2. Directing, monitoring, and evaluating relations with the stakeholders of the Company, which consist of
shareholders, bondholders/financial investors, government, legislature, judiciary, NGOs, military, police,
embassies, international stakeholders; and ensuring equal precedence of the Board Management with relevant
stakeholders; building, maintaining, and enhancing the credibility and positive reputation of the corporation
as well as advancing the interests of Pertamina.
171
SECURING ENERGY
3. Directing and determining that Pertamina’s CSR & SMEPP strategies are effective and appropriate for the
community, especially in the areas surrounding the Company’s operations, and improving the ability of
small businesses in order to be strong and independent, thus providing added value to the Company in the
framework of implementing Law No. 40 of 2007 concerning Limited Liability Companies and Law No. 19 of
2003 concerning SOEs and realize a sustainable business.
4. Managing corporate activities related to reporting to Shareholders, including preparing Annual Reports,
Company Sustainability Reports and holding a General Meeting of Shareholders.
5. Determining and controlling activities related to support the activities of the Board of Directors and Board of
Commissioners, including handling the administration and secretarial matters of the President Director.
6. Managing the availability of Pertamina’s data and information for the benefit of external stakeholders
includes the collection of information materials and documentation, services and verification of public
information materials to be accessed by the general public and company stakeholders, in order to realize the
implementation of the GCG principles.
7. Managing the planning, use, and accountability of the Corporate Secretary’s budget in accordance with the
Company’s authority
8. Managing the planning, placement and training of the employees within the Corporate Secretary.
9. Periodically preparing and submitting reports regarding management of the Corporate Secretary to the
President Director.
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Profile of the Head of Internal Audit
Name Faisal Yusra
Position Chief Audit Executive
Age 54 years old
Domicile Bogor
Legal Basis of Appointment Decree of PT Pertamina (Persero) President Director No.Kpts.P-166 / C00000 / 2017-
S8 dated September 15, 2017
Education • Bachelor of Electrical Engineering from the University of North Sumatra (1987),
• Bachelor of Law from University of Tridharma, Balikpapan
• Postgraduate Degree in Economics from University of General Sudirman (2001).
Working Experience • Electrical Drawing Staff in the Kalimantan Regional Processing Unit,
• Superintendent of Project Evaluation Kapital Balikpapan,
• Superintendent of the Contract Office RU Balikpapan,
• Assistant Manager of Bang Sis. Ops. Fuel Refinery Directorate of Processing,
• Assistant Manager of Supervision of Processing Directorate,
• Assistant of the Contract Manager - Integrated Supply Chain,
• Quality Management Manager of PT Pertamina (Persero),
• VP of Quality, System, & Knowledge Management Pertamina (2014-2017)
Structure and Position

The Pertamina Internal Audit Unit has a direct position under the President Director to guarantee the independence
of all audited activities or work units. The Pertamina Internal Audit Unit is led by the Chief Audit Executive who
has adequate academic qualifications and competencies in order to carry out their duties and responsibilities.
The Chief Audit Executive is appointed and dismissed by the President Director with the approval of the Board of
Commissioners.
Positions at Pertamina Internal Audit are regulated in the Decree of Human Capital and General Affairs Director
No.Kpts-049 / K00000 / 2018-S0 dated October 18, 2018 concerning PT Pertamina (Persero) Internal Audit
Organization Structure.
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The following is the organization structure of Pertamina’s Internal Audit Unit.
President Director
& CEO
Chief Audit Executive

Faisal Yusra
Audit Planning & Quality

Assurance Manager
Teuku Umar Usman
VP Integrated Loss VP Upstream Gas & VP Investigation Audit

VP Strategic Project IA VP Corporate IA VP Downstream IA
Control IA NRE IA & WBS
Joni Nazarudin Muhammad Noviansyah Firdaus Bambang Saputra Syaiful Rochman Vacant Budhi Dermawan
Number of Employees
In 2018, there were 134 positions filled in Pertamina Internal Audit Unit from a total of 189 positions, of which
55 (fifty five) positions or 29% were still vacant, with details as follows:
No. Pertamina Internal Audit Function Formation Filled Vacant
1 Chief Audit Executive 2 2 0
2 Audit Planning & Quality Assurance (APQA) 13 10 3
3 Investigation Audit 19 14 5
4 Upstream & Gas IA 17 14 3
5 Downstream IA 83 63 20
6 Corporate IA 33 23 10
7 Strategic Project IA 13 6 7
8 Integrated Loss Control IA 9 2 7
Total 189 134 55
Percentage 100% 71% 29%

Duties and responsibilities of the Internal Audit Unit as set forth in its Charter are as follows:
1. Composing and proposing the Annual Work Programs regarding Supervision/Annual Audit Plan and the
Budget Plan to be approved by the President Director.
2. Conducting monitoring through assurance and consultation activities across all work units in the Company.
3. Coordinating monitoring with the Internal Audit of Subsidiaries and Company affiliates.
4. Testing and evaluating the effectiveness of controls and risk management.
5. Reviewing periodic reports.
6. Conducting compliance checks regarding relevant legislation.
7. Identifying options for improvement and increasing efficiency of the Company
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8. Coordinating with the Audit Committee

9. Reporting the results of monitoring to the President Director and other authorities competent to receive those
reports.
10. Monitoring the implementation of follow-up on the results of internal and external audit as well as other
monitoring institutions.
11. Coordinating monitoring activities with the external audit.
12. Conducting coordination with the Compliance Unit/Chief Compliance Officer as well as other relevant parties
in order to perform follow-ups concerning the complaints/disclosures through the Whistle Blowing System
(WBS) and complaints arising from the public or other parties in accordance with applicable regulations.
13. Conducting investigative audits of problems that could potentially result in losses for the Company.
14. Conducting evaluation and quality improvement concerning the activities of internal control.
15. Reporting the monitoring activities to the Board of Commissioners cq the Audit Committee.
16. Performing other duties as assigned by the Board of Directors and/or Board of Commissioners.
Education, Training Program, and Professional Certification

PT Pertamina (Persero) always engages employees of the Pertamina Internal Audit Unit in competence development
programs carried out through certification programs (national and international) and non-certification through
training / workshops either held inhouse or held by external parties. Meanwhile, professional certification held
by employees in the Internal Audit sector includes CIA, CFE, CISA, CRMA, CCSA, QIA, CPA, CRMP, and CFrA.
The certification holders are spread to the Parent Company and Subsidiaries, so that they may accommodate all
auditors at Pertamina. The following is the professional certification of Pertamina Internal Audit Unit employees and
the number of certificate holders at Pertamina in 2018:
Employee Certification Table

IA ∑
No. Type of Certificate IA AP Description
Persero Auditor
1 Certified Internal Audit (CIA) 8 1 9 International
2 Certified Fraud Examiner (CFE) 23 16 39 International
3 Certified Information System Auditor (CISA) 8 1 9 International
4 Certified Risk Management Assurance (CRMA) 0 1 1 International
5 Certified Control Self Assessment (CCSA) 2 1 3 International
6 Qualified Internal Audit (QIA) 110 64 174 National
7 Certified Public Accountant (CPA) Indonesia 0 1 1 National
8 Certified Risk Management Professional (CRMP) 6 4 10 National
9 Certified Forensic Auditor (CFrA) 15 13 28 National
2018 Duty Implementation

Based on the evaluation of Audit Management System (AMS), in 2018 Pertamina Internal Audit Unit published 33
reports consisting of 18 Reports on Audit Findings, 10 Reports on Investigation Audit Findings, and 5 Reports on
Consultation Results. Of the 590 findings that must be followed up in 2018, 573 findings have been followed up
by management (97.12%).
During 2018, the function of Pertamina Internal Audit had escorted 7 BPK RI Audit assignments, escorted 29 BPKP
assignments and as a counterpart of the Public Accounting Firm in the audit of PT Pertamina's Financial Statements
for 2018 fiscal year.
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PUBLIC ACCOUNTANT

In performing the audit of financial statements, the Company appoints a Public Accounting Firm (KAP), which was
decided in the GMS based on the recommendation of the Board of Commissioners. Information concerning the list
of names of Public Accounting Firms and opinions provided for Pertamina’s financial statements over the previous 5
years is as follows:
Fiscal Year Public Accounting Firm Accountant Opinion
Opinion without modification

with a paragraph emphasizing
2018 KAP Purwantono, Sungkoro & Surja (EY) Drs Hari Purwantoro
one thing and a paragraph of
other things

with paragraphs of other things
2016 KAP Purwantono, Sungkoro & Surja (EY) Drs Hari Purwantoro Opinion without modification

with a paragraph emphasizing
one thing and a paragraph of
other things
2014 Tanudiredja ,Wibisana & Rekan (PWC) Drs Haryanto Sahari Opinion without modification
The audit cost for the Financial Statements of the 2018 Fiscal Year was Rp37.850.000.000 (excluding VAT),
including the cost of audits in the 23 subsidiaries, partners and Pertamina Pension Fund. There are no affiliations
between the auditors and the Board of Directors/Board of Commissioners/Shareholders of the Company.
In addition to carrying out general audits on the Consolidated Financial Statements, the Public Accounting Firm
Purwantono, Sungkoro & Surja also provided other services and they are included in the audit cost, which are as
follows:
1. Performed a General Audit of PT Pertamina (Persero) Consolidated Financial Statements for 2018
2. Performed an audit on compliance with prevailing legislation and internal control (PSA62) for the year ending
December 31, 2018.
3. Performed Agreed Upon Procedures regarding the Performance Evaluation Report of PT Pertamina (Persero) for
the year ending December 31, 2018.
4. Performed Agreed Upon Procedures regarding the Report on the Implementation of the Precautionary Principle
in the management of foreign debt of PT Pertamina (Persero) non-bank corporation in 2018
5. Issued a Management Letter regarding the Consolidated Financial Statements of PT Pertamina (Persero) and its
subsidiaries including the Management Letter to the Subsidiaries, Partners and Pertamina Pension Fund for the
year ending December 31, 2018, emphasizing the effectiveness of internal controls.
6. Performed Agreed Upon Procedures regarding the Management Contract Achievement Report for the year
ending December 31, 2018.
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RISK MANAGEMENT
Pertamina, like any other energy companies, continues to face business conditions that possess High Volatility,
Uncertainty, Complexity & Ambiguity (VUCA). These conditions have led to an increased risk exposure for
Pertamina. To that end, risk becomes an inherent aspect and must be taken into account in every line of business
in Pertamina. Enterprise Risk Management (ERM) was established with the objective of minimizing potential
losses and costs incurred in relation to the achievement of the Company’s Corporate Budget Plan and Long Term
Plan. Risk Management is also expected to maximize opportunities, maintain a conducive working environment,
build investor confidence, increase shareholder value, promote sound Corporate Governance, anticipate rapid
environmental change and integrate corporate strategy.
The basis of the implementation of Risk Management in Pertamina refers to the Regulation of the Minister of
State-Owned Enterprise No. PER-01/MBU/2011 regarding the Implementation of Good Corporate Governance
for State-Owned Enterprises, particularly Article 25 concerning the fulfilment of obligations to implement Risk
Management. In addition, Pertamina has a basis in the form of:
1. The Pertamina Risk Management Charter demonstrates the commitment of the Board of Directors concerning
the implementation of Risk Management and was renewed and signed on 1st November 2017.
2. Corporate Governance System Risk Management No.A002/H30000/2015-S9 Revision 1 on October 03,
2016, which contains the applicable Risk Management Guidelines at Pertamina.
3. Organizational Structure (TKO) & Work Procedures of Individuals (TKI), which contains technical guidance
regarding Risk Management.
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The Risk Management Platform at Pertamina has been prepared with the objective of realizing Enterprise Risk
Management (ERM) of the Pertamina Roadmap, i.e. risk awareness, framework, discipline, habit and culture.
Through ERM the Pertamina roadmap will play the role of being a point of reference in applying and evaluating
Risk Management in Pertamina.
ADVANCE
OPTIMIZATION
100%
2020
ERM Roadmap
MATU
MA TURE
TU RE WE
ARE
2018
GROW
GR OWTH
OW TH HERE
85%
2015
MATU
MATU
U RE
65%
2013
BASIC
3 0%
2010
LOW NON
EXISTENCE
0%
2008
FRAMEWORK ISO 31000: 2018 AS A RISK MANAGEMENT FRAMEWORK IN

PERTAMINA
Pertamina starts implementing ISO 31000: 2018 as a quality standard in the field of Risk Management which is a
development of the previous standard, namely ISO 31000: 2009. The standard includes principles, frameworks,
and guidelines concerning the management of risk.
In the environment of Pertamina, the implementation of ISO 31000: 2018 is the foundation of the Risk
Management Framework, it is performed integratedly in accordance with the Company’s environmental and
business processes. Therefore, Pertamina has made adjustments in the implementation of ISO 31000: 2018
in accordance with the character of the business, organization and culture of the Company so as to support
the achievement of ERM objectives in Pertamina. The three main foundations in ISO 31000: 2018 that are
implemented in risk management in Pertamina are Risk Management Principles, Risk Management Framework and
Risk Management Process.
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Risk Management Principles
Continual Integrated
improvement
Human and Structured

cultural and compre-
factors hensive
Value Creation
and Protection
Best available
information Customized
Dynamic Inclusive
Integration Risk Management Process

Scope, Context, Criteria
COMMUNICATION AND CONSULTATION
Risk Assessment
t
MONITORING AND REVIEW

en
Improvem
Des
Risk Identification
ign
Leadership
and Risk Analysis
Commitment
Risk Evaluation
Risk Treatment
n
io
al t
Ev
at
ua en
tio l em RECORDING AND REPORTING
n Imp
Risk Management Framework Risk Management Process
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IMPLEMENTATION OF ISO 31000:2018 IN PERTAMINA
ISO 31000: 2009 began its implementation in effectively identify top down and bottom up risks
Pertamina starting in 2011. The implementation of the so that the risk profile can be described more
framework was done in stages, starting from policy comprehensively. Pertamina’s risk profile is based
formulation to the Risk Management Process. In August on the aspirations of the Board of Directors, which
2018, there were several changes in the principles, means it is expected to cover both strategic and
framework and risk management process based on ISO operational risks.
31000: 2018. Broadly speaking, ISO 31000: 2018
emphasizes protecting and creating the value. That the Preparation of Pertamina’s Risk Profile refers to
responsibility of all lines of the Company to maintain the Risk Management Process in ISO 31000:
and create corporate value by implementing risk 2018 that includes the determination of context,
management in each process. The application of ISO identification, analysis, evaluation, handling and
31000: 2018 can be described as follows: risk monitoring. The establishment of a context in
the preparation of a Risk Profile is limited to the
1. Mandate and Commitment Ongoing Business and Business Development risks
The Mandate and commitment of the Board that could potentially occur during a budget period
of Directors of Pertamina is formulated as a of one year, which has financial and reputation,
commitment of the Board of Directors to take into strategic, legal and other business impacts.
account the risk aspects throughout the whole Risk Owner is the first line of defence and each
process of decision making. The Mandate and leading business unit for Risk Management is to
Commitment of the Board of Directors refers to identify inherent risk in every process and business
the Risk Management Principle at ISO 31000: unit along with Risk Agent, Key Risk Indicator
2018 and has been set forth in the Pertamina Risk (KRI), positive factor (control) and impact of risk.
Management Charter which was inaugurated and Furthermore, risk analysis is conducted through
signed by all Directors on November 01, 2017. Risk Owner, by either qualitatively or quantitatively
based on the historical data and expert judgment.
The Pertamina Risk Management Charter is then Commonly used risk analysis methods are Value at
used as the foundation for the implementation Risk (VaR) and the Delphi Method.
of Risk Management in Pertamina, which is
also supported by the Working System, the The following is a risk evaluation based on the
Organization Structure and the Work Procedures results of the previous analysis to determine the
of Individuals. The foundation is a reference for all decision of whether further risk management is
employees in applying Risk Management in their required and the type of risk handling measures
respective Directorates and Functions. taken to effectively and efficiently address the
Risk Agent. Each of the above stages is always
2. Preparation of the Pertamina Risk Profile accompanied by a process of communication
Preparation of the Pertamina Risk Profile is and consultation with the aim of ensuring the Risk
performed through the Fault Tree Analysis (FTA) Owner understands and applies Risk Management
method and Failure Mode Effect Analysis (FMEA). in accordance with the corporate policy. The above
Through the combination of both methods we can process is documented in the Risk Register.
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The Risk Register, which has been prepared by the RISKS FACED BY PERTAMINA AND
Risk Owner is consolidated by every Directorate, THEIR MANAGEMENT
Function and Subsidiary in Pertamina so as to be
selected as the Top Risk Directorate, Function and The rapid development of the energy business, raises
Subsidiary based on the threshold and challenge new risks that will be faced by Pertamina. This condition
session result with each of the highest ranked encourages Pertamina to rapidly identify new risks so
leaders. Furthermore, Corporate Risk Management that all lines of the Company are expected to remain
in this case is through the ERM Function of alert to the Company’s internal and external conditions.
consolidating the Top Risk Directorate, Function
and Subsidiary, which has been approved by Pertamina’s Risk Management process is the right
every top leader to be processed into the Top Risk process in order to identify the Company’s risks.
of Pertamina. Throughout 2018, there were 2399 identified risks with
1842 qualitative risks and 557 quantitative risks. From
Pertamina’s Top Risk Management is the the identification result, Pertamina’s Risk Profile was
responsibility of the Risk Management Committee obtained by the Board of Directors in accordance with
which consists of all Pertamina Directors. Through Pertamina’s Risk Intelligence Map (RIM), which includes
the implementation of Risk Management, both at the following:
the Corporate and Functional levels, it is expected
to increase the level of assurance for all Pertamina 1. Strategic Risk and Planning
stakeholders in achieving corporate targets. Strategic Risk and Planning are the risks associated
with strategic planning of Pertamina including
3. Monitoring & Review Corporate Responsibility & Sustainability, external
Risk Owner as the owner of the risk is obliged to factors, planning, project, and strategy. Pertamina’s
implement the mitigation plan and to ensure that strategic and planning risks include the risks of
the mitigation implemented has had the desired not achieving the target of oil and gas production
impact regarding a decrease of impact scale, risk and the risks regarding the scarcity of oil and
scale or both. These activities are then reported fuel products as well as the risk of unrealized
quarterly to Corporate Risk Management. In Investment Target.
each of these activities, the Risk Owner and Risk
Management Directorate/Function can consult with 2. Financial Risk
the Corporate Risk Management. Financial Risk is a risk associated with business
activities including accounting, credit, liquidity &
The implementation of Risk Management in Pertamina financial intelligence, financial market, planning
can perform well because it is supported by the & budgeting, and operational, which has resulted
organizational structure that is appointed to be in Pertamina’s financial loss. Risks that arise in
responsible in every Directorate, Function and relation to business activities including the risk
Subsidiary and is coordinated through Corporate of movement or fluctuation of market variables
Risk Management. In addition, Risk Management in including commodity prices, interest rates, and oil
Pertamina can also perform well due to the fact that prices and the risk of an event of default (Global
Risk Management has been designated as one of Bond) and cross default (Corporate Loan).
the Key Performance Indicator (KPI) items under the
name of Enterprise Risk Management for the Board of 3. Operational and Infrastructure Risk
Directors and the Risk Management Implementation Operational and Infrastructure Risks are the
level to encourage all lines to manage risk. risks related to Pertamina’s operational and
infrastructure activities including corporate
assets, human capital, information technology,
external events, legal, process management,
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product development, and sales, marketing and Production Targets and the Risk of Crude Oil and
communications. Operational and Infrastructure Fuel Products is to explore more new and organic/
Risks faced by Pertamina include Occupational inorganic reserves, diversify oil products and also
Safety and Health Risks of Employees and to seek out and develop other energy alternatives
Environmental Pollution and Risk of Pertamina’s (New and Renewable Energy)
Non-Optimal Assets.
2. Financial Risk
4. Risk of Governance Risk of Movement or Variable Market Fluctuation
The Risk of Governance is a risk caused by like Commodity Prices, Interest Rates and Crude
the lack of or non-compliance with the rules of Oil Prices can be mitigated through performing
Corporate Governance and Business Ethics in the Foreign Exchange Hedging transactions, seeking
management of Pertamina. The Risk of Decreasing out competitive loan interest rates and performing
Pertamina's Brand Equity and the Risk of Loss in the Market Risk Analysis. The mitigation effort for the
Implementation of the PSO Fuel Assignment are the risk of an event of default (Global Bond) and cross
main risks Pertamina needs to pay close attention default (Corporate Loan) is to periodically analyze
to. the covenant.
5. Compliance Risk 3. Operational and Infrastructure Risk

Compliance Risk is a risk associated with In Overcoming the Occupational Safety and Health
Pertamina’s business activities caused by the lack Risks and Environmental Pollution, Pertamina is
of or non-compliance with prevailing regulations. continuing to improve employees’ safety awareness
There are two major risks faced here, the Risk of a through training programs and enrolling safety
Decreasing GCG Assessment and Fraud Risk. aspects as KPIs for all employees. The risk of
Pertamina’s Non-Optimal Assets is solved by
6. Reporting Risk improving, maintaining, rejuvenating production
Reporting Risk is a risk associated with Pertamina’s assets with new technology.
obligation to submit reports to interested parties/
shareholders. The Risk of Financial Statements and 4. Risk of Governance
Management Reports being not timely submitted, Risk of Inappropriate CSR Programs. The objectives
the risk of Unreliable and Unfair Implementation are mitigated through the implementation of a
of GMS falling behind schedule are the two main top-down approach strategy in order to ensure
risks that need to be considered. implementation of the program at the operational
level as well as monitoring the implementation of
The mitigation plan prepared throughout the risk CSR. Downstream optimization and the proposed
identification process was undertaken with the aim alpha BBM PSO adjustments are meant to mitigate
of reducing the impact and the probability of the the Risk of Loss in the Implementation of the PSO
occurrence of risk. The mitigation actions performed on Fuel Assignment.
Pertamina’s risks are:
5. Compliance Risk
1. Strategic Risk and Planning The risk mitigation action preventing a Decreased
The mitigation efforts undertaken to address the GCG Assessment is through the socialization and
Risk in Outcomes of meeting the Oil and Gas implementation of GCG, monitoring compliance
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LHKPN and the execution of assessments by Through this implementation of mitigation, it is hoped
external parties. Fraud risk is handled through the that Pertamina’s Risk Profile, which was originally at a
implementation of the Whistle Blowing System, and High Risk will decrease to a Low Risk in accordance
conducting periodical audits as well as introducing with the Risk Management Committee.
the parameters in the preparation of ISO 37001
Anti-Bribery Management System certification. The 2019 Risk Management Strategy should be able
to cover and consider business conditions for 2019.
6. Reporting Risk The implementation of Risk Management must be able
The risk of Financial Reports and Management to provide early warning through a comprehensive
Reports being not submitted in a timely manner, business analysis while still implementing the risk
also being Unreliable and Infeasible are management that has been performed, and is also
mitigated through periodic data reconciliation, supplemented by more detailed mitigation monitoring,
Business Process Control (BPC) usage and which will be described in the Monitoring Report of
system improvements related to actual costing Pertamina’s 2019 Top Risk Pertamina.
configurations. Mitigation Measures of the Risk of
the Implementation of the GMS not being held well In particular, the Board of Directors has aspirations
and on schedule is through the preparation and regarding Pertamina’s Risk Management Strategy
conducting of Pre-GMS meetings, Circulars and through the design of effective Work Programs, ensuring
RUPS RJPP. efficient coordination among Directorates, conducting
evaluations related to strategic projects and enhancing
facilities and services to workers.
EVALUATION TO THE EFFECTIVENESS OF THE RISK MANAGEMENT SYSTEM
Risk Management in Pertamina has a Risk Management Control System known as the three lines of defence, which
are summarized in the following graphs:
Commissioner / Audit Committee
BOD & TOP Management
1st Line of Defense 2nd Line of Defense 3rd Line of Defense
Financial Control
HSSE
Internal Quality Assurance
Management
Control Internal Audit
Controls Inspection
Measures
Compliance
Risk Management
Risk Management &

Operational Management Internal Audit
Compliance Function
Source: The Institute of Innternal Auditors, IIA Position Paper – The Three Lines of Defense in Effective Risk Management and Controls,Jan 2013
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RISK MANAGEMENT

In 2018, the maturity assessment of Pertamina's Risk The three lines of defense model shows the role of each
Management has been carried out. The integrated risk stage in controlling Risk Management. The evaluation
management maturity assessment approach used in all of Risk Management in Pertamina is divided into 2
PT Pertamina (Persero), including the Subsidiaries of PT sections, which are Risk Management Audit and Risk-
Pertamina (Persero),is as follows: Based Audit (RBA). The Risk Management Audit is a
review and evaluation of risk management policies
1. An e-questionnaire survey conducted on workers at that are developed, whereas the RBA is an audit of risk
level of executors and basic management, as well management across all business lines. RBA comes from the
as; Risk Register. The Risk Register is one of the most important
2. Interviews conducted on Directors of PT Pertamina materials in the audit plan over the year. In principle,
(Persero)Subsidiaries the auditor will conduct a sampling evaluation of the
effectiveness of the implementation of risk management
Based on the assessment results, Pertamina's Risk on the identified potential risks listed in the audit plan.
Management maturity reached the Mature Growth stage The results of the inspection are submitted in the form of
with several opportunity for improvements that needed to recommendations or findings reported to the Corporate
be implemented to increase maturity across Pertamina. Risk Management and Risk Owner. The recommendations
One of the steps in opportunity for improvement is to or findings are expected to be a reference for updating
strengthen the three lines of defense. In 2018, Pertamina the Risk Register and/or making mitigation improvements
began to determine the related functions in managing or additions in order to be more effective.
the three lines of defense. This is the basis for the Risk .
Management work program in 2019.
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ACHIEVEMENT OF RISK MANAGEMENT IN PERTAMINA
The rapid development of the digital era has prompted named as Runner Up in the Risk Champion category.
Pertamina to digitize, including for risk management. The award was presented to organizations that were
Therefore, since 2014 Enterprise Risk Management able to demonstrate innovation in Pertamina’s Risk
has encouraged the formation of systems that can be Management. Then in 2018, Pertamina's achievements
accessed in real time. The ERM System was established increased, with 4 (four) nominations in the ASEAN Risk
so as to facilitate the Risk Owner to register risks and Award, namely nominations for Risk Technology, Public
serve as a Pertamina risk database. Data entry in the Initiative, Public Risk and ASEAN Risk Champion. Of
ERM System started in 2016 and continues to grow the four nominations, Pertamina won the Runner Up
until now. In addition to facilitating the Risk Owner in award for the Risk Technology category and won the
registering risk, the ERM System is also expected to highest nomination in the ASEAN Risk Award, ASEAN
function as a dashboard of risk management that can Risk Champion.
be monitored directly by the Board of Directors.
The appreciation of good risk management in
Pertamina’s business lines are divided into Ongoing Pertamina is also shown through the increasing
Business and Business Development, which means number of companies, both State-Owned Enterprises
that risk management in Pertamina needs to be and Private Companies that conduct comparative
differentiated across both lines of business, as well as studies of risk management to Pertamina. Through
the establishment of the ERM System. Broadly speaking, until 2018, Pertamina has been receiving comparative
the ERM System is divided into management for the study requests from dozens of companies comprising
Ongoing Business and Business Development. The flow of mining, aviation, finance, automotive, fertilizer,
or operating system is established in accordance with railway, electricity, arms, cement, insurance, property,
Pertamina’s operational standards. steel, toll road , air navigation, construction, airport
management, surveyors and universities.
As one of the acknowledgements and appreciations
regarding Risk Management, Pertamina has received
appreciation from the ASEAN Risk AWARDS organized
by the Enterprise Risk Management Academy (ERMA)
held in 2017 and 2018. In 2017, Pertamina first
participated in the ASEAN Risk Award and was
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INTERNAL CONTROL SYSTEM

Principles of the Internal Control The Suitability of Internal Control

System System with COSO Framework
The Company’s Internal Control System is in line Pertamina has adapted the implementation of the
with the internationally accepted Internal Control Internal Control System within the COSO framework
System according to the Committee of Sponsoring through implementing the 5 components and 17
Organizations of the Tradeway Commission (COSO). principles specified within the COSO framework.
Pertamina’s principles for its Internal Control System Related to risk management aspects in the Internal
consists of several components, which are the control Control System, Pertamina also refers to (ISO) 31000:
of the environment, risk assessment, control activities, 2009 Risk Management - Principles and Guidelines.
information and communication, and monitoring. The compliance of the Internal Control System with the
COSO framework is intended to enable Pertamina to
Control of Operational and Financial define its objectives in accordance with the Company’s
Activities vision and mission, ensuring the effectiveness and
In controlling operational activities, the Company efficiency of resource use, prioritizing reporting trust
imposes the preservation of integrity and ethical values, and complying with prevailing laws and regulations.
encourages workers to implement the Company’s
rules and policies, and encourages workers to show Evaluation of Internal Control Systems
exemplary attitudes and actions, enforces disciplinary Effectiveness
actions towards rule violations, determines discretionary Periodically, Pertamina evaluates the effectiveness
policy related to interventions against management of the on-going monitoring, followed by a separate
policies, minimizes the potential for conflicts of interest, evaluation conducted by the Internal Audit Unit, which
compiles the SOP and competency standards, creates then analyzes the results obtained. The evaluation
conducive leadership, and creates a safe and healthy results regarding the implementation of the Internal
working environment. Control System forms one of the foundations of the
management evaluation towards the effectiveness of
In controlling financial activities, Pertamina has the Internal Control System to determine any required
established a policy related to Internal Control over improvements of the system or policy which enables
Financial Reporting (ICoFR) and its evaluation. The the management to be more effective in running the
policy designs, implements, evaluates and reports on Company’s operational activities. The Internal Control
the effectiveness of Internal Controls both at the entity System within the Company is continuously evaluated so
and transactional levels, including internal control as to keep up with business growth and to support the
facilitated by Information Technology (IT General Company’s performance.
Control & IT Application Control). In the long run, the
implementation of ICoFR provides a greater level of
confidence for stakeholders regarding the effectiveness
of the Internal Controls of Financial Reporting and
enhances further confidence in the Company and its
Management.
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ANNUAL REPORT 2018
CODE OF CONDUCT
Principles Enactment of the Code of Conduct to

Pertamina’s ethical code or ethical guidance is reflected All Organizational Levels
in the new Code of Conduct passed in 2017. The Pertamina’s Code of Conduct is binding and applicable
Code of Conduct is an improvement on the previous to all members of the organization spanning every
Code of Conduct and consists of provisions related the level of position in Pertamina. This Code of Conduct
Vision, Mission, Values, Good Corporate Governance was signed by the President Director and the President
principles and Behavioural Models, which are as Commissioner of the Company and is enforced under
follows: the Decree of the President Director No.Kpts-42/
1. Operations that meet Health, Safety, Security and C00000/2017-S0 on June 22, 2017. These guidelines
Environment serve as guidelines for Pertamina’s employees to always
2. Human Capital includes integrity in working, act in accordance with the predetermined standards
professional work attitude, equal career of the Company based on the values and principles of
opportunities, and avoidance of discrimination. GCG.
3. Commitment to partners and customers includes
fair business competition; gifts, banquets and Socialization and Dissemination
entertainment; money laundering crime; as well as Socialization and dissemination of the Code of
commitment to customers. Conduct is performed thoroughly across all functions
4. Commitments to shareholders and stakeholders and directorates of Pertamina through the Compliance
include commitments to the Government as Online System portal, face to face socialization and the
shareholders; commitment to stakeholders; social formation of the GCG champion.
and environmental responsibility; political activities
and professional organizations; and public
information disclosure.
5. Protection to the Company’s assets, with the basic
provisions in order to protect the Company’s assets;
confidentiality of data and information; intellectual
property rights; and the whistleblowing system.
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SECURING ENERGY
ANTI GRATIFICATION POLICY

Pertamina realizes that through the regular implementation of business activities, relations and interactions of
various parties, both internally and externally, establishing cooperation, harmonious and sustainable relationships
can not be avoided. In this cooperation, the existence of gratification from one party to the other party is also an
inevitably.
Therefore, Pertamina always maintains the integrity of the Company through the commitment to apply the principles
of anti-gratification. The Anti-Gratification Initiation is socialized to all of Pertamina’s employees in order to uphold
the values and culture of the Company. Pertamina’s anti-gratification policy is contained in Gratification, Rejection,
Acceptance, Gifts and Entertainment No.A-002/N00010/2012-S0. Regularly, Pertamina also actively participates
in a series of activities organized by the Corruption Eradication Commission (KPK) in commemoration of the
International Anti-Corruption Day.
REPORT ON ASSETS OF STATE OFFICIALS (LHKPN)
The stipulation in regards to Report on Assets of State Officials (LHKPN) in Pertamina refers to Law No. 28/1999
regarding Clean State Organizations and Freedom from Corruption, Collusion and Nepotism. According to SK
No.70/C00000/2017-S0 dated November 30, 2017, the President Director of Pertamina has stipulated that the
stakeholders within PT Pertamina (Persero) and Subsidiaries are mandated to submit the LHKPN, including:
1. Board of Commissioners in both Pertamina and its subsidiaries
2. Board of Directors in both Pertamina and its subsidiaries
3. Senior Vice President/equivalent
4. Vice President/equivalent in both Pertamina and its subsidiaries
5. Manager/equivalent in both Pertamina and its subsidiaries
6. Area / Unit / Region Manager
7. Commissioners of Subsidiaries who are not as a Supporting Duty Official
In 2018, Compulsory Reporters within PT Pertamina (Persero) and Subsidiaries that have fulfilled the obligation of
LHKPN are 1,646 officials out of a total of 2,038 Compulsory Reporters (LHKPN compliance rate of 81%).
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ANNUAL REPORT 2018
POLICY REGARDING PARTICIPATION IN POLITICS
The Company respects the political and association rights of all of Pertamina’s
employees. The Company is neutral by not participating directly or indirectly
in political party activities and does not make donations or contributions in
any form. This commitment is a manifestation of Pertamina’s dedication in
performing Good Corporate Governance practices. Pertamina’s commitment
form is listed in the Pertamina Code of Conduct and Circular Letter of
the Human Capital Director No.E-14 / K00000 / 2018-S8 concerning
Reaffirmation of the Neutrality and Prohibition of the Use of SOE Resources in
Practical Political Activities in Executive and Legislative Election which establish
the following:
1. Pertamina’s employees are prohibited from engaging in political activities
within the Company and making donations and providing other assistance
in any form that takes the name of the Company, including the use of
facilities, facilities and funds of the Company for the benefit of Political
Parties.
2. Pertamina’s employees are prohibited from carrying, installing, displaying,
and wearing Political Party symbols, pictures and/or ornaments in other
workplace offices/facilities of the Company.
3. Pertamina’s employees are prohibited from carrying and / or using
company logos / symbols and using the title of office in the company in
any political activity / participation.
4. Pertamina’s employees must avoid, stop and / or replace activities
that have the potential to be misused by certain individuals / groups
for practical political activities in the form of executive and legislative
elections.
5. Pertamina’s employees are encouraged not to upload, respond (such as
likes, comments and its kind) or disseminate pictures / photos, mission
visions, and any information related to the prospective executive/
legislative candidates
6. Pertamina’s employees may become the administrators of Political
Parties and/or candidates/legislative members or candidates/Regional
or Government Leaders by filing a layoff request as an employee or
terminating his/her working relationship with the Company.
7. The Company supports Pertamina’s employees to participate actively in
the activities of professional organizations or other social organizations
that provide benefits for Pertamina.
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SECURING ENERGY
WHISTLE BLOWING SYSTEM

Whistle Blowing System (WBS) is a system that provides a means of recording complaints to the stakeholders
regarding alleged violations that occur in the Company. To avoid any potential conflicts of interests, management
of the WBS in Pertamina is conducted in cooperation with an Independent Consultant.
The WBS in Pertamina can be accessed by all stakeholders including the public through various complaint
channels, which are as follows:
Phone : (021) 381 5909/5910/5911
SMS and Whatsapp : 0811 861 5000
Facsimile : (021) 381 5912
Site : https://pertaminaclean.tipoffs.info
Email : [email protected]
Post : P.O.Box 2600 JKP 10026
Whistleblower Protection System

The Company provides protection to the whistleblower as stated in the Collective Labour Agreement governing
the guarantee of confidentiality of the whistleblowers identity and the matters reported; legal protection against
the consequences of reporting; protection against disturbance/physical threat to the whistleblower and assurance
of non-discrimination including potential barriers in career development, transfer or demotion. The Company also
threatens to lay off superiors who impose sanctions on the whistleblower.
WBS Manager
Pertamina’s WBS is managed by professional and internationally reputable consultants.
Mechanism of WBS Complaint Report.
Asking Questions to Reporting WBS contact through

01 Whistleblower multiple channels
Investigation Proven Sanctions
True
Identification Number
02 Reporting Award
Whistleblower
Not
Feedback proven
Written Disclosure
03 Reporting and
Recommendations
Not true
WBS External Compliance

Closed
Consultant Team
Disclosure Statements
04 included into eRoom
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ANNUAL REPORT 2018
WHISTLE BLOWING SYSTEM
Mechanism of WBS Complaint Report

The Mechanism of Handling and Following Up the WBS Report Management of the WBS is conducted with the
principle of confidentiality, anonymity and independence. Each incoming complaint is received by the independent
consultant, who will analyse and ask for more details from the whistleblower, which will then be conveyed to
Pertamina. The mechanism of handling the WBS report is conducted based on the Organization’s Working
Procedures related to the Whistle Blowing System No.B-001/M00000/2018-S0 Fifth Revision effective as of April
02, 2018.
Once the report is received from the independent consultant, the Compliance Function will conduct a preliminary
review to be sure whether the WBS report is right and proper for investigation. The process of investigation will
be performed by the Internal Audit Function. Following up concerning the handling of the WBS report will be
performed with synergy between the Legal Counsel & Compliance, Security, Bunker & Operation Compliance
(BOC) and Internal Audit.
NUMBER OF WBS REPORTS AND IMPOSED SANCTIONS

Throughout 2018, the number of WBS reports received and followed up was 95 comprising 25 reports followed
up have been completed and 70 reports were still in the follow-up process. Sanctions for violations committed were
imposed in accordance with applicable regulations.
Table of 2017 WBS Complaints Category

No Category Total
1. Corruption 11
2. Bribery 3
3. Conflict of interest 10
4. Theft 22
5. Fraud 12
6. Violations of Laws and Regulations 37
7. Others 0
Total in 2018 95
Table of Total Complaints

Year Total WBS Complaints Resolved
2018 95 25
2017 75 27
2016 69 34
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INFORMATION AND CLARIFICATION OF
BAD CORPORATE GOVERNANCE PRACTICES
Information and Clarification Table of Bad Corporate Governance Practices
Practices Explanations
Presence/absence of Corporate Governance

GCG Practices applied by the Company have followed and
practices that have not become the standard of
have complied with the applicable regulations.
Good Corporate Governance practices.
The presence of a report stating that the The Company did not receive a report from internal or
Company pollutes the environment. external parties related to environmental pollution
Important matters currently faced Important matters are conveyed in the Annual Report
Non-compliance in the fulfilment of tax The Company has fulfilled tax obligations and did not receive
obligations warnings or sanctions related to tax activities.
Non-compliance of the presentation of the

The Company has presented the financial statements
financial statements to the Financial Accounting
according to the applicable Financial Accounting Standards.
Standards
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ANNUAL REPORT 2018
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SECURING ENERGY
Corporate Social
Responsibility
As a good corporate citizen,
Pertamina carries out corporate
social responsibility programs as
an effort to realize the sustainable
development goals.
Two men dressed in traditional Betawi clothes are
fighting in a martial art competition. This so-called
Pencak Silat self-defense competition is culture of
martial art that is quite well-developed in Indonesia,
starting from Betawi, West Java, to West Sumatra.
The martial art has a high philosophy that every step
must be done with a peaceful calm state of mind and
vigilance.
Corporate Social Responsibility

Pertamina has existed for more than 60 years. Year Concretely, Pertamina's CSR mission includes the
by year Pertamina grows, develops, and makes following:
outstanding progress as a national energy company. • To implement corporate commitments on Social and
Pertamina realizes that these advances have not Eco Responsibility (TJSL) that will provide added
been realized by their own efforts, but through good value to all stakeholders to support the company's
synergy with various elements of society. Through its growth
business, Pertamina is not only committed to creating • To carry out corporate responsibility and social
added value for the company but also for the wider care for a sustainable community development
community. This added value is not only in natural
resource energy useful for many people but also other Pertamina's CSR principles refer to ISO 26000,
positive "energy", such as access to better education, namely:
economic self-reliance, and eco-preservation, which • To be consistent with sustainable development and
ultimately leads to a better life, according to the vision community welfare
of Pertamina's corporate social responsibility (CSR). • To consider the expectations of all stakeholders
• To be Law-abiding and consistent with
international norms
• To be integrated into the business
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ANNUAL REPORT 2018
In terms of integrating CSR programs into corporate In implementing CSR, Pertamina is based on the
business activities, Pertamina is committed to: following major strategies:
• Overcoming the negative impact of company 1. Mutually Beneficial
operations through compliance with regulations and 2. Sustainable
creating new and better values for the community 3. Giving priority to the surrounding and affected
and environment. communities
• Providing social, economic and eco benefits to 4. Development of green energy and alignment with
the community, especially around the company's PROPER-LH
operating area. 5. Effective dissemination and publication
• Improve company regulation, efficiency, business
growth, and implement business risk mitigation.
Pertamina Pertamina
Hijau Sehat
Planting Pertamina Sehati

Mangrove
– Biological
Diversity
4 CSR Pillars
PERTAMINA
Fostered
Village in the
Economic Zone
SME Fostered
Partners National Science
Olympiad
Pertamina Scholarship Pertamina
Berdikari Cerdas
With its extensive operating area and business CSR as risk management, and CSR as value creation.
spectrum with diverse characteristics and conditions of Pertamina groups CSR programs and the Partnership
stakeholders, Pertamina refers to 3 CSR concepts in its and Community Development Program (PKBL) into four
implementation, namely CSR as corporate philanthropy, pillars.
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SECURING ENERGY
“"Sharing Synergy”
Pertamina believes that synergy will produce a more In implementing CSR programs Pertamina also
positive work process. Synergy not only accelerates the synergizes with other parties, including among
achievement of goals but also produces greater and them with other SOEs. One of the CSR Program
wider positive impacts. In 2018, Pertamina strengthens manifestations in synergy between SOEs is the 100
synergies with various parties in implementing CSR Small Libraries Program. Synergizing with PT Balai
programs, both with external stakeholders and Pustaka and PT Pos Indonesia, the program has
subsidiaries as well as affiliates. been running since 2016. Another example of the
synergy between SOEs that has been implemented
Synergy with the community has always been a top is the construction of earthquake-friendly houses in
priority in the implementation of Pertamina's CSR Lombok which is the result of a synergy between PT
programs. As external stakeholders who receive PERTAMINA (Persero) and PT Adi Karya.
benefits directly from the CSR Program implemented,
the synergy between the community and Pertamina is As stated above, synergy will produce a greater and
the success key to the program. The synergy developed wider positive impact. This is evident from the results of
between Pertamina and the community are within the the synergy between PT PERTAMINA (Persero) and one
scope of community empowerment which will then of its subsidiaries, PT Pertamina Lubricants. From the
create community self-reliance. The Target Village results of synergy in the Enduro Student Program, the
Program and Community Economic Zone that are CSR program implemented can be further developed
currently being implemented and spread throughout the to become a Creating Shared Value (CSV) program.
Indonesian territory are a concrete manifestation of the Development in CSV programs is a higher level of CSR
synergy of empowerment and community self reliance programs implemented, where social aspects are one
results. of the factors emphasized in developing the company's
business strategy.
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ANNUAL REPORT 2018
Pertamina Cerdas Pertamina Sehat
It has become a common understanding that the In addition to education, physical health is one
progress of a nation and a state is very much of the important factors in building a community.
determined by the education of its people. For this Pertamina believes a healthy mother starts a cycle of
reason, education is fundamental to development intergenerational health. This belief is the foundation of
of society. Pertamina through the pillar Pertamina Pertamina Sehat flagship program, namely Pertamina
Cerdas seeks to contribute in improving the quality of Sehati. Pertamina Sehati targets pregnant mothers,
education for the younger generation. lactating mothers, babies and toddlers. Pertamina
Sehati program covers the revitalization of health
One of Pertamina Cerdas flagship programs is the service post (Posyandu), the implementation of
Sobat Bumi Scholarship. What distinguishes Pertamina Posyandu cadres capacity building, awareness and
Sobat Bumi Scholarship from other scholarship activation of mothers in particular and the community
programs is the scope of scholarship recipients who in general, as well as designing and implementing
have wide coverage, namely in addition to outstanding the basics of self reliance for Posyandu under the
students, there are also scholarship recipients of Pertamina Sehati program.
appreciation specifically for athletes, disabilities
and children whose parents experience workplace In line with one of Sustainable Development Goals,
accidents. Sobat Bumi Scholarship also targets namely healthy life, and also with the nawacita
recipients in Eastern Indonesia. In 2018 Pertamina program initiated by the Republic of Indonesia’s
manages Sobat Bumi Scholarship fund with 405 government, Pertamina Sehati has a target of 0.08%
recipients. Until 2018, the total number of Sobat Bumi in terms of maternal mortality ratio in 2020. Pertamina
Scholarship recipients reached 1,157 students. Sehati targets the surrounding units Pertamina's
operations and subsidiaries as well as in areas
including remote areas and areas of 3T (outermost,
leading and disadvantaged) so as to facilitate and
improve access to health that has been difficult to
obtain in these areas, by involving local communities
to participate in reducing mortality mother and
child health. In 2018, Pertamina Sehati program is
implemented in no less than 29 Posyandu from the
total Posyandu that has implemented the program until
2018.
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SECURING ENERGY
Pertamina Hijau
As a company engaged in extractive industries, Other program promoted is Biodiversity. In general,

Pertamina has a big concern to provide benefits to this program aims to preserve endemic native
nature. Pertamina realizes how nature contributes to Indonesian flora and fauna. Through its operating units
sustainable business. Through synergy with various spread throughout Indonesia, Pertamina realizes that
elements of society, Pertamina creates and implements every region of Indonesia has endemic native animals
eco conservation programs. or plants that are rare, very rare, or even on the verge
of extinction. Therefore, Pertamina implements the
The two major programs carried out by Pertamina in Biodiversity program as an effort to preserve or even
giving back to nature are the Mangrove Planting and increase the original natural wealth of Indonesia. No
Biodiversity program. Throughout 2018, Pertamina fewer than 25 flora and fauna have been targeted
planted 52,000 mangroves. A mangrove is a tropical by this program. In 2018, there are 25 Biodiversity
marine tree. Pertamina choose this type of tree to Programs carried out, which include the conservation
be developed, considering that most of Pertamina's of sea eagles in Thousand Islands, marine conservation
operating areas are also on coastal or wide rivers. in Aceh Tamiang, conservation of black yaki in Bitung.
Mangrove trees also provide many domino effects on
increasing biodiversity in the region, such as mangrove
crabs, various types of fish, insects, as well as animals
that consume mangrove seeds or fruit. Meanwhile, the
well-established mangrove planting area can be used
as a source of livelihood for local residents, not only
from the utilization of mangrove tree in culinary and
handicraft products, but also by making the area an
agrotourism area. Karangsong Mangrove Forest is one
example of the success of mangrove planting program.
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ANNUAL REPORT 2018
Pertamina Berdikari
Pertamina believes that a sustainable business is a RKB functions as data and information center and a
business where the profits generated by the company center for education, development and digitalization of
must contribute to creating a "domino effect" for the MSME.
economy of the surrounding community. Through CSR,
Pertamina has created many programs that support SOE Creative House will assist and encourage MSME
the realization of an independent local community actors in answering the main challenges of MSME
economy. Pertamina has nurtured more than 100 Target business development in terms of:
Villages and Community Economic Zones in 2018. This • Increasing competence
program is a community development program based • Improving Marketing Access
on local potential. • Increasing the ease of access to capital
Pertamina as a SOE supports the improvement of the Pertamina's support for MSME is also realized through
quality of MSMEs through the Rumah Kreatif BUMN soft loans as business capital for MSME from the
(RKB) or SOE Creative House program. Until 2018, Partnership Program funds. This program is in line with
Pertamina has nurtured as many as 15 SOE Creative SOE Minister Regulation PER-02-MBU / 7/2017 dated
Houses. July 20, 2017 concerning the Partnership Program of
State-Owned Enterprises with Small Businesses and
This program is a shared home to gather, learn and Community Development Programs.
foster MSME to enhance their capabilities, and serve as
a forum for SOEs to collaborate in establishing Digital Funds for the implementation of Partnership Program
Economy Ecosystem by encouraging MSME to enhance are determined to come from the provision of net
their capacity and capability. income after tax stipulated in the AGM ratification of
BUMN Pembina Annual Report, namely a maximum of
4% from profit after tax of the previous fiscal year.
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SECURING ENERGY
The Partnership Program is intended to improve Realization of Partnership Program Funds Distribution
the economic activities of small businesses and the Realization of
community’s social empowerment in order to be resilient Partnership
Number
Program
and independent. In implementing the Partnership of Small
Type of Business Funds
Business
Program Pertamina also cooperates with other SOEs Distribution
Partners
(% of total
and other relevant institutions. realization)
Industrial Sector 253 5.8

Pertamina provides revolving partnership loans to
Trade Sector 609 11.1
Target Partners namely individuals, either with a cluster
system or group form for capital of Micro, Small and Agriculture Sector 103 2.2
Medium Enterprises. Livestock Sector 164 4.3
Plantation Sector 5 58.9

Development of Target Partners is also provided through
Fisheries Sector 520 15.2
national and international exhibition activities, training,
Service Sector 120 2.4
export import workshops and other activities.
Other Sectors 4 0.1
Pertamina has implemented a partnership program Total 100.0

since 1993. To date, there are 60,388 MSMEs have Grant 4.4
become Pertamina's small business partners with
the total fund distributed for the Partnership Program Realization of Community Development Funds
amounting to Rp3,371,666,349,575, while the Distribution
realization in 2018 was Rp265,371,258,000 and the Realization
funds distribution effectiveness was 31.46%. of BL Funds
Type of Assistance Distribution
(% of total
realization)
Realization of CSR Funds Distribution Natural Disaster Assistance 4.0
Realization of CSR Funds Education & Training Assistance 24.4
Sector Distribution
(% of total realization) Public Health Assistance 10.9
Education 25.9 Public Infrastructure Assistance 34.9
Health 9.1 Worship Facilities Assistance 19.1
Environment 12.2 Nature Conservation Assistance 1.9
Empowerment 52.8 Poverty Alleviation Social Assistance 4.9
Total 100,0 Total 100.0
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ANNUAL REPORT 2018
Energy in Natural Disasters
The earthquake hitting Lombok on August 5, 2018 supplies from fuel terminal Makassar, fuel terminal
caused a huge impact on the surrounding community. Gorontalo and fuel terminal Luwuk.
As an emergency response, Pertamina formed a
number of Lombok Earthquake Emergency Response To support the operational activities of the Aviation fuel
Posts. The Main Post was at the center of earthquake terminal Mutiara, some aviation fuel terminal volunteer
location, Command Post I was at aviation fuel terminal workers from all over Indonesia were brought in to help
Lombok, and Command Post II was at Ampenan. the operation of Aviation fuel terminal Mutiara. Besides
that, Aviation fuel terminal Hasanuddin has the role as
Aviation fuel terminal Lombok acts as the first location a Aviation fuel terminal Buffer to supply logistical needs
for receiving and picking up logistical assistance from all (material for facilitation and QC, office supplies, food and
regions which is subsequently channeled to Command others) for the operation of Aviation fuel terminal Mutiara.
Post II. Pertamina has dedicated one refueller in
Selaparang to the Indonesian Air Force as a form of air In addition to fulfilling Avtur in emergency response,
support services and disaster site reconstruction programs. Pertamina through Industrial Fuel Marketing conducted
canvasing through retail tankers to fulfill fuel needs,
On September 28, 2018 earthquake, tsunami and especially for PLN, Basarnas and Government Agencies
liquefaction natural disasters took place in Central so that operations for public services may run properly.
Sulawesi (Palu, Donggala, and Sigi). The natural disaster
resulted in damage to the facilities at Aviation fuel terminal On December 22, 2018, the Sunda Strait tsunami
Mutiara and Fuel terminal Donggala and the disruption struck a coastal area of Cilegon, Banten and its
of Avtur supply activities from Fuel terminal Donggala to surroundings. Pertamina took the initiative to mobilize
Aviation fuel terminal Mutiara. As an emergency response, assistance by establishing the Pertamina Group Logistics
Pertamina formed Pertamina Peduli Post in fuel terminal Center Command Post at Tanjung Gerem Fuel Terminal.
Donggala and aviation fuel terminal Mutiara. All aid collected at the Tanjung Gerem Fuel Terminal
was distributed to five posts around the disaster
To ensure the reliability of Avtur supplies to customers, site, namely Carita post, Anyer post, Labuan post
especially aircraft in disaster relief and evacuation coordinated by the Ministry of BUMN, Lebak post, and
assistance, aviation fuel terminal Mutiara enforces RAE Pandeglang post.
203
SECURING ENERGY
Financial
Statements
A number of rowing teams wearing
traditional clothes are racing on a large
river. This boat race is a cultural activity
of the Riau people called Pacu Jalur. Pacu
Jalur has an in-depth philosophy of the
importance of unity in achieving success.
This page is intentionally left blank
206
Annual Report 2018
PT Pertamina (Persero) and its subsidiaries
Consolidated Financial Statements as of December 31, 2018

and for the year then ended with independent auditors’ report
207
SECURING ENERGY
The original consolidated financial statements included herein are in the Indonesian language
PT PERTAMINA (PERSERO) AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2018 AND
FOR THE YEAR THEN ENDED WITH
INDEPENDENT AUDITORS’ REPORT
Table of Contents
Pages
Board of Director’s Statement
Independent Auditors’ Report
Consolidated Statement of Financial Position ................................................................................ 1-3
Consolidated Statement of Profit or Loss and Other Comprehensive Income................................. 4-6
Consolidated Statement of Changes in Equity ............................................................................... 7-8
Consolidated Statement of Cash Flows ......................................................................................... 9-10
Notes to the Consolidated Financial Statements ............................................................................ 11-155
Supplementary Financial Statements ........................................................................................... 156-165
**************************
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Annual Report 2018
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SECURING ENERGY
210
Annual Report 2018
211
SECURING ENERGY
212
Annual Report 2018
These consolidated financial statements are originally issued in the Indonesian language

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December 31, 2018
(Expressed in thousands of United States Dollars, unless otherwise stated)
As Restated (Note 5)
January 1, 2017/
Notes December 31, 2018 December 31, 2017 December 31, 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2g,2h,6 9,112,312 6,409,827 6,721,568
Restricted cash 2g,2h,7 108,915 119,671 122,697
Short-term investments 2h 225,199 249,282 130,820
Trade receivables 2h,2I
Related parties 2f,41a 1,297,651 1,095,016 1,422,268
Third parties 8a 1,933,455 1,580,627 1,442,452
Due from the Government -
current portion 2h,9 1,834,261 1,492,625 1,792,457
Other receivables 2h,2i
Related parties 2f,41b 149,178 255,054 242,839
Third parties 8b 734,312 620,460 649,798
Inventories 2j,10 6,323,165 6,036,137 4,795,022
Prepaid taxes - current portion 2u,40a 820,598 794,255 567,621
Prepayments and advances 2k 534,987 476,326 503,382
Other investments 2h,11 80,171 27,328 43,190
Total Current Assets 23,154,204 19,156,608 18,434,114
NON-CURRENT ASSETS
Due from the Government - net of
current portion 2h,9 2,924,148 663,114 -
Deferred tax assets 2u,40e 1,441,866 1,371,080 751,463
Long-term investments 2h,2m,12 2,819,054 2,970,918 3,329,439
Fixed assets 2n,2o,13 12,859,274 12,439,511 12,156,785
Oil & gas and geothermal properties 2o,2p,14 18,614,286 18,031,374 16,397,662
Prepaid taxes -
net of current portion 2u,40a 820,287 829,300 1,469,767
Other non-current assets 2h,15 2,085,333 1,977,470 1,436,864
Total Non-Current Assets 41,564,248 38,282,767 35,541,980
TOTAL ASSETS 64,718,452 57,439,375 53,976,094
The accompanying notes to the consolidated financial statements form an integral part of these consolidated financial statements.
213
SECURING ENERGY

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
January 1, 2017/
LIABILITIES AND EQUITY
LIABILITIES
SHORT-TERM LIABILITIES
Short-term loans 2h,16 4,347,035 452,879 230,293
Trade payables 2h
Related parties 2f,41c 78,781 49,277 118,540
Third parties 17 3,597,777 3,900,121 3,290,665
Due to Government - current portion 2h,18 1,207,743 1,050,619 952,545
Taxes payable 2u,40b
Income taxes 467,605 308,803 475,576
Other taxes 258,405 250,533 251,553
Accrued expenses 2h,19 2,135,509 2,019,896 1,596,612
Long-term liabilities -
current portion 2h,2o,20 420,577 365,959 722,200
Other payables 2h
Related parties 2f,41d 54,011 56,625 50,947
Third parties 1,203,426 1,121,494 1,026,808
Deferred revenues - current portion 202,013 260,838 177,499
Total Short-Term Liabilities 13,972,882 9,837,044 8,893,238
LONG-TERM LIABILITIES
Due to Government - net of
current portion 2h,18 795,082 780,626 732,573
Deferred tax liabilities 2u,40e 3,307,406 2,848,152 2,528,517
net of current portion 2h,2o,20 1,805,300 2,109,767 2,716,909
Bonds payables 2h,21 11,094,096 10,385,873 9,772,656
Employee benefits liabilities 2s,22 1,850,383 2,208,220 2,058,732
Provision for decommissioning
and site restoration 2q,23 2,029,735 2,129,337 1,900,093
Deferred revenues -
net of current portion 74,623 42,716 65,715
Other non-current payables 2h 178,905 84,373 62,903
Total Long-Term Liabilities 21,135,530 20,589,064 19,838,098
TOTAL LIABILITIES 35,108,412 30,426,108 28,731,336
214
Annual Report 2018

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
January 1, 2017/
EQUITY
Equity attributable to
owners of the parent entity
Share Capital
Authorized – 600,000,000 (2018)
and 200,000,000 (2017 and 2016)
ordinary shares at par value of
Rp1,000,000 (full amount)
per share;
Issued and paid-up-capital
171,227,044 shares (2018),
133,090,697 shares
(2017 and 2016) 25a 16,191,204 13,417,047 13,417,047
Additional paid-in capital 2e,4a,25b (924,296) 2,736 2,736
Merging entity’s equity - 1,804,579 1,801,742
Government contributed assets
pending final clarification of status 26 401,120 1,361 1,361
Other equity components 607,564 487,699 664,617
Retained earnings 27
- Appropriated 8,796,357 6,871,101 4,631,441
- Unappropriated 2,526,772 2,540,195 3,147,043
Total equity attributable to owners
of the parent entity 27,598,721 25,124,718 23,665,987
Non-controlling interests 2c,24 2,011,319 1,888,549 1,578,771
TOTAL EQUITY 29,610,040 27,013,267 25,244,758
TOTAL LIABILITIES AND EQUITY 64,718,452 57,439,375 53,976,094
215
SECURING ENERGY
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the Year Ended December 31, 2018
For the years ended December 31
As Restated
(Note 5)
Notes 2018 2017
Sales and Other Operating Revenues 2r
Domestic sales of crude oil, natural gas,
geothermal energy and oil products 28 44,742,511 39,788,784
Subsidy reimbursements from the Government 29 5,632,468 3,572,084
Export of crude oil,
natural gas and oil products 30 3,636,953 1,874,281
Marketing fees 15,432 25,474
Revenues from other operating activities 31 3,906,207 740,100
TOTAL SALES AND OTHER
OPERATING REVENUES 57,933,571 46,000,723
Cost of sales and other direct costs 2r
Cost of goods sold 32 (42,787,916) (33,175,656)
Upstream production and lifting costs 33 (4,386,516) (3,421,207)
Exploration costs 34 (267,680) (165,356)
Expenses from other operating activities 35 (1,271,977) (862,962)
TOTAL COST OF SALES
AND OTHER DIRECT COSTS (48,714,089) (37,625,181)
GROSS PROFIT 9,219,482 8,375,542
Selling and marketing expenses 2r,36 (1,642,831) (1,590,202)

General and administrative expenses 2r,37 (1,329,911) (1,598,934)
Gain on foreign exchange, net 2r,2t 19,622 58,137
Finance income 2r,38 256,573 233,074
Finance costs 2r,38 (835,238) (817,711)
Share in net profit of associates and
joint ventures 2c,2r 122,724 37,904
Other expenses, net 2r,39 (80,825) (830,582)
(3,489,886) (4,508,314)
PROFIT BEFORE INCOME TAX 5,729,596 3,867,228
Income tax expense, net 2u,40c (3,013,202) (1,166,824)

PROFIT FOR THE YEAR AFTER
THE EFFECT OF MERGING ENTITY’S
INCOME ADJUSTMENT 2,716,394 2,700,404
216
Annual Report 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued)
As Restated
(Note 5)
Notes 2018 2017
PROFIT FOR THE YEAR AFTER
THE EFFECT OF MERGING ENTITY’S
INCOME ADJUSTMENT 2,716,394 2,700,404
OTHER COMPREHENSIVE
(LOSS)/INCOME
Item not to be reclassified to profit or loss
in subsequent periods (net of tax)
Remeasurement of net defined
benefit liability 2s 228,498 (129,059)
Items to be reclassified to profit or loss
in subsequent periods (net of tax)
Foreign exchange difference
from translation of financial
statements in foreign currency 2c,2t (79,561) 7,060
Share of other comprehensive
loss of associates 2c,2m (130,775) (25,134)
Other comprehensive
income (loss), net of tax 18,162 (147,133)
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR
AFTER THE EFFECTS OF MERGING
ENTITY’S COMPREHENSIVE INCOME
ADJUSTMENT 2,734,556 2,553,271
Adjustment merging entity’s income:

Owners of the parent entity (45,770) (81,537)
Non-controlling interests 2c (34,585) (66,248)
Total (80,355) (147,785)
TOTAL INCOME FOR THE YEAR

BEFORE THE EFFECT OF MERGING
ENTITY’S INCOME ADJUSTMENT
ATTRIBUTABLE TO:
Owners of the parent entity 2,526,772 2,540,195
Non-controlling interests 2c 109,267 12,424
Total 2,636,039 2,552,619
217
SECURING ENERGY

CONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued)
As Restated
(Note 5)
Notes 2018 2017
Adjustments of merging entity’s
comprehensive income:
Owners of the parent (42,546) (80,710)
Non-controlling interests 2c (32,682) (65,549)
Total (75,228) (146,259)
TOTAL COMPREHENSIVE INCOME

FOR THE YEAR BEFORE EFFECTS OF
MERGING ENTITY’S COMPREHENSIVE
INCOME ADJUSTMENT
ATTRIBUTABLE TO:
Owners of the parent entity 2,536,559 2,363,277
Non-controlling interests 2c 122,769 43,735
Total 2,659,328 2,407,012
218
Annual Report 2018

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent entity
Other equity components

Government
contributed Differences arising
Issued assets from translation of
and Additional pending final non US$ currency Other Retained earnings Non-
SECURING ENERGY
paid-up Merging entity‘s paid-in clarification financial comrehensive controlling
Notes capital equity capital of status statements income Appropriated Unappropriated Total interests Total equity
Balance as of
January 1, 2017/
December 31, 2016
(as restated) 13,417,047 1,801,742 2,736 1,361 (304,201 ) 968,818 4,631,441 3,147,043 23,665,987 1,578,771 25,244,758
Inpact of consolidated
beginning balance
of non-controlling interest
Etablissement Maurel Et Prom - - - - - - - - - 252,158 252,158
Merging entities income

adjustment of merging entity’s
comprehensive income - 80,710 - - - - - - 80,710 65,549 146,259
Adjustment of merging
entity‘s other equity transaction - (77,873) - - - - - - (77,873) (51,664) (129,537)
Differences arising
from translation of US Dollar
currency financial statements 2c,2t - - - - 1,225 - - - 1,225 3,271 4,496
Other comprehensive income from

associates - - - - - (55,421 ) - - (55,421 ) 28,050 (27,371)
Remeasurements of net defined

benefit liability 2s - - - - - (122,722 ) - - (122,722 ) (10 ) (122,732)
Dividends declared 2aa,27 - - - - - - - (907,383 ) (907,383 ) - (907,383)
Appropriation of other
reserves 27 - - - - - - 2,239,660 (2,239,660 ) - - -
Profit for the year - - - - - - - 2,540,195 2,540,195 12,424 2,552,619
Balance as of
December 31, 2017
(as restated) 13,417,047 1,804,579 2,736 1,361 (302,976 ) 790,675 6,871,101 2,540,195 25,124,718 1,888,549 27,013,267
219
7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Annual Report 2018

Attributable to owners of the parent entity
Government
contributed Differences arising
Issued assets from translation of
and Additional pending final non US$ currency Other Retained earnings Non-
paid-up Merging entity‘s paid-in clarification financial comrehensive controlling
Notes capital equity capital of status statements income Appropriated Unappropriated Total interests Total equity
Balance as of
January 1, 2018/
December 31, 2017
(as restated) 13,417,047 1,804,579 2,736 1,361 (302,976 ) 790,675 6,871,101 2,540,195 25,124,718 1,888,549 27,013,267
Adjustments of merging entity‘s comprehensive
Income for the year - 42,546 - - - - - - 42,546 32,682 75,228
Changes in ownership in
PT Asuransi Tugu Pratama
Indonesia Tbk and PT Pertamina
Internasional Eksplorasi
dan Produksi - - - - - 13,710 - - 13,710 68,814 82,524
Capitalization of advance for share issuance 2,774,157 (1,847,125 ) (927,032 ) - - - - - - - -
pending final clarification of status 26 - - - 399,759 - - - - 399,759 - 399,759
Differences arising
from translation of non-US Dollar
currency financial statements 2c,2t - - - - (59,338 ) - - - (59,338 ) (20,223 ) (79,561)
Other comprehensive
income from
associates - - - - - (69,138 ) - - (69,138 ) (61,637 ) (130,775)
Remeasurements of net defined
benefit liability 2s - - - - - 234,631 - - 234,631 (6,133 ) 228,498
Dividends declared 2aa,27 - - - - - - - (614,939 ) (614,939 ) - (614,939)
Appropriation of other
reserves 27 - - - - - - 1,925,256 (1,925,256 ) - - -
Profit for the year - - - - - - - 2,526,772 2,526,772 109,267 2,636,039
Balance as of
December 31, 2018
(as restated) 16,191,204 - (924,296 ) 401,120 (362,314 ) 969,878 8,796,357 2,526,772 27,598,721 2,011,319 29,610,040
220
8

CONSOLIDATED STATEMENT OF CASH FLOWS
As Restated
(Note 5)
Notes 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 48,878,496 40,220,288
Cash receipts from the Government 7,805,648 3,787,855
Cash receipts from tax restitutions 185,016 616,698
Payments to suppliers (38,227,640) (29,261,802)
Payments to the Government (11,279,557) (7,524,628)
Payments of corporate income taxes (2,688,175) (2,100,297)
Cash paid to employees and management (1,640,855) (1,540,805)
Receipts from (placement of) restricted cash 73,109 (156,047)
Receipts of interest 63,327 35,616
Net cash generated from operating activities 3,169,369 4,076,878
CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from disposal of short-term investments 198,439 99,870
Proceeds from disposal of long-term invesments - 15,801
Interest received from investments 13,784 18,240
Cash receipts from other investing activities 262,222 28,681
Proceeds from sale of fixed assets 176 102
Dividends received form associates 214,083 81,648
Purchases of fixed assets (1,287,975) (981,944)
Purchases of oil & gas and geothermal properties (1,482,518) (891,964)
Placements in long-term invesments (1,062,244) (659,992)
Placements in short-term investments (237,577) (226,322)
Payments for exploration and evaluation assets (99,538) (37,200)
Placement of restricted cash (22,614) (29,433)
Cash obtained due to change of control - 203,230
Net cash used in investing activities (3,503,762) (2,379,283)
221
SECURING ENERGY

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
As Restated
(Note 5)
Notes 2018 2017
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loans 46 9,489,219 4,039,533
Proceeds from bond issuance 46 734,407 -
Proceeds from long-term loans 46 255,931 1,288,204
Repayments of short-term loans 46 (5,583,278) (3,786,723)
Repayments of long-term loans 46 (465,351) (2,109,038)
Dividend payments 27,46 (585,755) (867,751)
Payments of finance costs (538,489) (523,147)
Repayments of bonds 46 (37,649) -
Placement of restricted cash (312) (13,249)
Net cash generated from financing activities 3,268,723 (1,972,171)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 2,934,330 (274,576)
Effects of exchange rate changes on cash

and cash equivalents (231,845) (37,165)
CASH AND CASH EQUIVALENTS

AT BEGINNING OF THE YEAR 6 6,409,827 6,721,568
AT END OF THE YEAR 6 9,112,312 6,409,827
10
222
Annual Report 2018

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2018 and for the Year Then Ended
1. GENERAL
a. PT Pertamina (Persero) (“the Company”)
i. Company profile
The Company was established by Notarial Deed No. 20 dated September 17, 2003 of Lenny
Janis Ishak, S.H. The Company’s deed of establishment was approved by the Minister of
Justice and Human Rights through Letter No. C-24025 HT.01.01.TH.2003 dated October 9,
2003 and published in State Gazette No. 93 Supplement No. 11620 dated November 21,
2003. The establishment of the Company was based on Law No. 1 Year 1995 dated March 7,
1995 regarding Limited Liability Companies, Government Regulation (“PP”) No. 12 Year 1998
dated January 17, 1998 regarding State Enterprises (Persero), PP No. 45 Year 2001 dated
June 5, 2001 regarding Amendment to PP No. 12 Year 1998, Law No. 22 Year 2001 dated
November 23, 2001 regarding Oil and Gas, Law No. 19 Year 2003 dated June 19, 2003
regarding State-Owned Enterprises, and PP No. 31 Year 2003 dated June 18, 2003 regarding
the change in the status of Perusahaan Pertambangan Minyak dan Gas Bumi Negara
(Pertamina, “the former Pertamina Entity”) to a State Enterprise (“Persero”).
The Company’s Articles of Association have been amended several times. The latest
amendment was made to increase the authorized capital of the Company, under Notarial
Deed No. 29 dated April 13, 2018 of Aulia Taufani, S.H., which was approved by the Minister
of Law and Human Rights through Decision Letter No. AHU-0008395.AH.01.02. Year 2018
dated April 13, 2018.
In accordance with PP No. 31 Year 2003, all rights and obligations arising from contracts and
agreements entered between the former Pertamina Entity and third parties, provided these are
not contrary to Law No. 22 Year 2001, were transferred to the Company. In accordance with
PP No. 31, the objective of the Company is to engage in the oil and gas business in domestic
and foreign markets and in other related business activities. In conducting its business, the
Company’s objective is to generate income and contribute to the improvement of the economy
for the benefit of the people of Indonesia.
At the date of establishment of the Company, all oil and gas and geothermal energy activities
of the former Pertamina Entity, including joint operations with other companies, were
transferred to the Company. These businesses have been transferred to the Company’s
subsidiaries. All employees of the former Pertamina Entity became employees of the
Company.
ii. Business activities and principal address
In accordance with its Articles of Association under Notarial Deed No. 29 dated April 13, 2018
of Aulia Taufani, S.H., which was approved by the Minister of Law and Human Rights through
its Letter No. AHU-0008395.AH.01.02. Year 2018 dated April 13, 2018, the Company shall
conduct the following main business:
a. Operate in exploration activities of oil and gas;
b. Operate in exploitation activities of oil and gas;
c. Carry out activities in electrical energy, including but not limited to the exploration and
exploitation of geothermal energy, geothermal electricity power plant (“PLTP”), gas power
plant (“PLTG”) and electricity energy produced by the Company;
d. Implement refining activities that produce fuel oil, special fuel, non-fuel, petrochemicals,
gas fuel, Liquified Natural Gas (“LNG”) and Gas to Liquid (“GTL”) result/other product
either and products or intermediate products;
e. Conduct activities of the procurement of raw materials, processing, transportation, storage
and trading of Biofuels;
11
223
SECURING ENERGY

1. GENERAL (continued)
a. PT Pertamina (Persero) (“the Company”) (continued)
ii. Business activities and principal address (continued)
f. Conduct operational activities of transportation which includes the transport of petroleum,

natural gas, fuel oil, fuel gas and/or result/other products for commercial purposes;
g. Carry out storage activities which includes the reception, the collection and spending of
petroleum reservoirs, fuel oil, fuel gas and/or result/other products for commercial
purposes;
h. Carry out commercial trade activities which includes the purchase, sale, export and import
of petroleum, Fuel Oil, Fuel Gas and/or result/other products; the distribution of natural gas
through pipelines including commercial electrical energy produced by the Company; and
i. Conduct developmental activities, exploration, production and trading of new and
renewable energy, among others, Coal Bed Methane (“CBM”), Liquified Coal, Gasified
Coal, Shale Gas, Shale Oil, Bio Fuel, Diesel Fuel, Wind Energy and Biomass.
In addition to the above main business activities, the Company may conduct business in order
to optimize the utilization of available resources as follows:
a. Trading house, real estate, warehousing, tourism, resort, sports and recreation, rest areas,
hospitals, education, research, infrastructure, telecommunications, rental services and
operation of facilities and infrastructure owned by the Company, the freeway (toll) and
shopping centre/mall;
b. Management of Special Economic Zones;
c. Industrial Complex management; and
d. Other business activities and associated to support its main businesses.
The Company has processing activities which include the processing of crude oil into oil
products and production of Liquified Petroleum Gas (“LPG”) and petrochemicals (paraxylene
and propylene). The Company owns six Refinery Units (“RU”) with installed processing
capacities as follows:
Installed processing capacity

RU of crude oil (barrels/day)
(unaudited)
RU II - Dumai and Sungai Pakning, Riau 170,000
RU III - Plaju and Sungai Gerong, South Sumatera 133,700
RU IV - Cilacap, Central Java 348,000
RU V - Balikpapan, East Kalimantan 260,000
RU VI - Balongan, West Java 125,000
RU VII - Kasim, West Papua 10,000
The Company, through its subsidiaries, also conduct certain business activities as disclosed in
Notes 1b and 43.
The Company’s head office is located at Jl. Medan Merdeka Timur No. 1A, Jakarta, Indonesia.
12
224
Annual Report 2018

iii. The Company’s Board’s of Commissioners and Directors and Audit Committee
As of December 31, 2018, and 2017, the composition of the Company’s Board of
Commissioners are as follows:
2018 2017
President Commissioner Tanri Abenga Tanri Abenga

Vice President Commissioner Arcandra Tahar Arcandra Tahar
Commissioner Sahala Lumban Gaol Sahala Lumban Gaol
Commissioner Suahasil Nazara Suahasil Nazara
Commissioner Ahmad Bambangc Edwin Hidayat Abdullah
Commissioner Alexander Laya,c Alexander Layb
Commissioner Ego Syahrialc -
a Independent Commisioner
b Effective per September 12, 2017 based on General Meeting Shareholder (“GMS”) No. SK-194/MBU/09/2017
c Effective per May 30, 2018 based on GMS No. SK-142/MBU/05/2018
As of December 31, 2018, and 2017, the composition of the Company’s Board of Directors are
as follows:
2018 2017
President Director Nicke Widyawatib Elia Massa Manik

Marketing Director - Muchamad Iskandar
Corporate Marketing Director Basuki Trikora Putraa -
Retail Marketing Director Mas’ud Khamida -
Upstream Director Dharmawan H. Samsub Syamsu Alam
Gas Director - Yenni Andayani
Finance Director Pahala N. Mansuryc Arief Budiman
Human Resources Director Koeshartantob Nicke Widyawati
Logistic, Supply Chain,
and Infrastructure Director Gandhi Sriwidodoa -
Refinery Director Budi Santoso Syarifa Toharso
Refinery Megaproject and
Petrochemical Director Ignatius Tallulembangc Ardhy N. Mokobombang
Investment Planning and
Risk Management Director Heru Setiawanc Gigih Prakoso
Asset Management Director M. Haryo Yuniantoa Dwi Wahyu Daryoto
a
Effective per April 20, 2018 based on resolution GMS No. SK-97/MBU/04/2018
b
Effective per August 29, 2018 based on resolution GMS No. SK-232/MBU/08/2018
c
Effective per September 13, 2018 based on resolution GMS No. SK-242/MBU/092018
13
225
SECURING ENERGY

iii. The Company’s Board’s of Commissioners and Directors and Audit Committee
(continued)
As of December 31, 2018 and 2017, the composition of the Company’s Audit Committee is as
follows:
2018 2017
Chairman Tanri Abenga Tanri Abenga

Vice Chairman Sahala Lumban Gaolc Sahala Lumban Gaol
Vice Chairman Ahmad Bambangc Edwin Hidayat Abdullah
Member - Dwi Martani
Member Agus Yuliantob Agus Yuliantob
Member Bonar Lumban Tobingb Bonar Lumban Tobingb
a
Effective per May 6, 2015 based on resolution No. SK-60/MBU/05/2015
b
Effective per January 1, 2016 based on resolution No. 023/KPTS/K/DK/2015
c
Effective per July 18, 2016 based on resolution No. 005/KPTS/K/DK/2018
iv. Number of employees
As of December 31, 2018 and 2017, the Group has 31,569 and 30,118 permanent employees
(unaudited), respectively.
b. Subsidiaries, associates and joint arrangements
i. Subsidiaries
As of December 31, 2018 and 2017, the Group has direct or indirect control of the following
subsidiaries:
Effective Total assets
percentage of ownership before elimination
Year of
Subsidiaries establishment 2018 2017 2018 2017
Oil and gas exploration

and production
1. PT Pertamina Hulu Energi 1990 100.00% 100.00% 4,531,667 4,780,787
2. PT Pertamina EP 2005 100.00% 100.00% 7,498,644 7,621,461
3. PT Pertamina EP Cepu 2005 100.00% 100.00% 2,992,894 2,608,022
4. Pertamina E&P Libya
Limited, British Virgin Island 2005 100.00% 100.00% 154 154
5. PT Pertamina East Natuna 2012 100.00% 100.00% 129 129
6. PT Pertamina EP Cepu ADK 2013 100.00% 100.00% 12,847 18,534
7. PT Pertamina Internasional
Eksplorasi dan Produksi 2013 100.00% 100.00% 5,841,041 5,776,299
8. ConocoPhillips Algeria Limited,
Cayman Island *) 2013 100.00% 100.00% 774,216 1,065,720
9. PT Pertamina Hulu Indonesia 2015 100.00% 100.00% 1,478,109 304,838
10. PT Pertamian Hulu Rokan**) 2018 100.00% - 785,000 -
Geothermal exploration and production

11. PT Pertamina Geothermal
Energy 2006 100.00% 100.00% 2,556,651 2,408,120
Oil and gas drilling services

12. PT Pertamina Drilling
Services Indonesia 2008 100.00% 100.00% 560,423 574,402
14
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Annual Report 2018

b. Subsidiaries, associates and joint arrangements (continued)
i. Subsidiaries (continued)
Total assets
Percentage of ownership before elimination
Year of
Processing and sale of oil

and gas products,
construction and oilfield
services, information
technology and
telecommunications
13. PT Elnusa Tbk 1969 41.10% 41.10% 390,995 358,319
Oil and gas trading, gas

transportation, processing,
distribution and storage
14. PT Pertamina Gas***) 2007 - 100.00% - 1,926,760
15. PT Perusahaan Gas
Negara Tbk***) 2018 56.96% - 8,764,437 6,293,129
Electricity
16. PT Pertamina Power Indonesia 2016 100.00% 100.00% 114,721 99,726
Trading services and

industrial activities
17. PT Pertamina Patra Niaga 1997 100.00% 100.00% 908,986 960,394
18. Pertamina International Timor S.A 2015 95.00% 95.00% 36,643 28,677
Public fuel filling stations

business
19. PT Pertamina Retail 1997 100.00% 100.00% 203,312 150,643
Lubricant processing and

marketing
20. PT Pertamina Lubricants 2013 100.00% 100.00% 413,332 500,637
Shipping
21. PT Pertamina Trans Kontinental 1969 100.00% 100.00% 307,519 287,014
22. PT Pertamina International
Shipping 2016 100.00% 100.00% 296,335 217,466
Air transportation services

23. PT Pelita Air Service 1970 100,00% 100,00% 60,380 65,300
Investment management
24. PT Pertamina Pedeve Indonesia
(previously PT Pertamina
Dana Ventura) 2002 100.00% 100.00% 62,098 71,327
Human resources development

services
25. PT Pertamina Training
& Consulting 1999 100.00% 100.00% 39,799 40,768
Offices, house rental and hotel

operations
26. PT Patra Jasa 1975 100.00% 100.00% 236,119 229,394
Health services and hospital

operations
27. PT Pertamina Bina Medika 1997 100.00% 100.00% 105,743 111,006
Insurance services
28. PT Asuransi Tugu Pratama
Indonesia Tbk (“ATPI”)
(previously PT Tugu Pratama
Indonesia) ****) 1981 58.50% 65.00% 923,376 836,387
Refineries
29. PT Kilang Pertamina
Internasional 2017 100.00% 100.00% 1,836 738
15
227
SECURING ENERGY

i. Subsidiaries (continued)
Effective Total assets
percentage of ownership before elimination
Year of
Liquified Natural Gas (“LNG”)

regasification
30. PT Nusantara Regas *****) 2010 82.78% 60.00% 240,817 277,438
*) Effective liquidation on February 28, 2019

**) Note 4g
***) Note 4a
****) Note 4j
*****) Note 4b
ii. Associates
The directly owned associates as of December 31, 2018, are as follows:
Percentage
Associates of ownership Nature of business
1. PPT Energy Trading Co., Ltd. 50.00% Marketing services

2. PT Trans Pacific Petrochemical Processing and sale of oil and gas
Indotama 48.59% products and services
The indirectly owned associates as of December 31, 2018, are as follows:
Percentage
Associates of ownership Nature of business
1. PT Donggi Senoro LNG 29.00% LNG Processing

2. PT Asuransi Samsung Tugu 19.50% Insurance
3. Seplat Petroleum Development
Company Plc, (“Seplat”) Nigeria 21.37% Oil and gas exploration and production
4. PT Gas Energi Jambi 22.78% Transport and distribution of natural gas
iii. Joint arrangements
The indirectly owned joint ventures as of December 31, 2018, are as follows:
Percentage
Joint Ventures of ownership Nature of business
1. PT Patra SK 35.00% Lube Base Oil (LBO) processing

2. PT Perta-Samtan Gas 66.00% LNG processing
3. PT Perta Daya Gas 65.00% LNG regasification
4. PT Indo Thai Trading 51.00% Petrochemical trading
5. PT Pertamina Rosneft Development of petroleum and
Pengolahan dan Petrokimia 55.00% petrochemical refineries
6. PT Transportasi Gas Transport of natural gas via
Indonesia (“Transgasindo”) 59.87% transmission pipes
Exploration and production
7. Unimar LLC 50.00% of oil and gas
8. PT Permata Karya Jasa Workshop services, guidance, and
(“Perkasa”) 60.00% distribution of labour services
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iii. Joint arrangements (continued)
PT Pertamina Rosneft Pengolahan dan Petrokimia (“PRPP”) was established by Notarial Deed
No. 13 dated November 28, 2017 of Mina NG, SH., M.KN., PRPP’s deed of establishment was
approved by the Minister of Justice and Human Rights through letter No. AHU-
0053838.AH.01.01.Year 2017 dated November 28, 2017.
As of January 24, 2018, based on amendment of the Articles of Association of Perkasa, the
Group no longer possesed control over Perkasa. As of December 31, 2018, the Group
recognized investment in Perkasa as an investment in joint venture.
On April 11, 2018, the Company has control over PT Nusantara Regas. Previously, the
Company recognized investment in PT Nusantara Regas as an investment in joint venture
(Note 4b).
The indirectly owned joint operation is as follows:

Percentage
Joint ventures of ownership Nature of business
1. Natuna 2 B.V., Belanda 50.00% Exploration and production
The Group considered the existence of substantive participating rights held by the non-
controlling shareholders of PT Perta-Samtan Gas, PT Perta Daya Gas, PT Indo Thai Trading
and PT Pertamina Rosneft Pengolahan dan Petrokimia which provide such shareholders with
joint control over significant financial and operating policies. With respect to non-controlling
rights, the Group does not have control over the significant financial and operating policies of
PT Perta-Samtan Gas, PT Perta Daya Gas, PT Indo Thai Trading and PT Pertamina Rosneft
Pengolahan dan Petrokimia even though the Group has more than 50% of share ownership.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of preparation of the consolidated financial statements
The accounting and financial reporting policies adopted by the Group conform to the Indonesian
financial accounting standards, which are based on Indonesian Statements of Financial
Accounting Standards (“SFAS”). The accounting policies were applied consistently in the
preparation of the consolidated financial statements for the periods ended December 31, 2018 and
2017 by the Group.
The consolidated financial statements, except consolidated statement of cash flows have been
prepared on the accrual basis and the measurement basis used is historical cost, except for
certain accounts which requires different measurement as disclosed on each account’s accounting
policies.
The consolidated statements of cash flows have been prepared based on the direct method by
classifying the cash flows into operating, investing and financing activities.
The consolidated financial statements are presented in thousands of US Dollars (US$), which is
also the Group’s functional currency, unless otherwise stated.
b. Changes in accounting policies and disclosure
i. The adoption of these new/revised standards and interpretations did not result in
substantial changes to the Group’s accounting policies and had no material effect on
the amounts reported in the consolidated financial statements
The following new standards, amendments to existing standards and interpretations have
been published and are mandatory for the first time adoption for the Group’s financial year
beginning January 1, 2018 or later periods. The Group has adopted them, but they have no
significant impact to the Group’s current business:
- Amendment to SFAS 2: Statement of Cash Flows on Disclosures Initiative
- Amendment to SFAS 13: Investment Property: Transfer of Investment Property
- Amendment to SFAS 46: Income Tax on Recognition of Deferred Tax Assets
- SFAS 15 (2017 Improvement): Investments in Associates and Joint Ventures
- SFAS 67 (2017 Improvement): Disclosure of Interest In Other Entities
ii. New standards, amendments and interpretations issued but not yet effective
The following are several accounting standards issued by the Indonesian Financial Accounting
Standards Board (“DSAK”) that are considered relevant to the financial reporting of the Group
but not yet effective for consolidated financial statements as of December 31, 2018 and for the
year then ended:
Effective January 1, 2019
- ISAK 33: Foreign currency transaction and advance consideration, which clarifies the use
of the transaction date to determine the exchange rate used in the initial recognition of the
related asset, expense, or income at the time the entity has received or paid advance
considertion in the foreign currency.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b. Changes in accounting policies and disclosure (continued)
(continued)
Effective January 1, 2019 (continued)
- ISAK 34: Uncertainty in the Treatment of Income Tax which is an interpretation of

SFAS 46: Income Tax which aims to clarify and provide guidance in addressing
uncertainty in income tax treatment in financial statements.
- Amendments to SFAS 24: Employee Benefits which provide clearer guidance for entities
in recognizing past service costs, settlement gains and losses, current service costs and
net interest after amendments, curtailments, or completion of programs because they use
the latest actuarial assumptions (previously using acturial assumptions at the beginning of
the annual reporting period) and clarifies how the accounting requirements for
amendments, curtailments, or program completion can affect the asset limit requirements
as seen from the reduction in surplus which causes the impact of the asset limit to change.
- SFAS 22 (2018 Improvement): Business Combination which clarifies that when one party
in a joint arrangement obtains control of business which is a joint operation (as defined in
SFAS 66), and has rights to assets and liabilities to the liabilities related to operations
together, just before the acquisition date, the transaction is a business combination that is
carried out in stages.
- SFAS 26 (2018 Improvement): Borrowing Costs which clarifies that capitalized borrowing
costs are the weighted average borrowing costs for all loan balances during the period but
the entity excludes from the calculation the borrowing costs on loans specifically obtained
to obtain the qualifying assets up to the point that substantially all activities needed to
prepare assets to be used in accordance with their intentions or sold have been
completed.
- SFAS 46 (2018 Improvement): Income tax which confirms the consequences of income
tax on dividends (as defined in SFAS 71: Financial Instruments) arises when an entity
recognizes a liability to pay dividends. The consequences of income tax are more directly
related to past transactions or events that generate profits that can be distributed rather
than with distribution to owners. Therefore, the entity recognizes the income tax
consequences in profit or loss, other comprehensive income or equity in accordance with
the entity's initial recognition of past transactions or events.
- SFAS 66 (2018 Improvement): Joint Arrangement which clarifies that the parties
participating in, but do not have joint control over, a joint operation can obtain joint control
over joint operations in the event that joint operations activities are a business (as defined
in SFAS 22 : Business Combination). In such cases, previously held interests in joint
operations are not remeasured.
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b. Change in accounting policies and disclosure (continued)
(continued)
Effective January 1, 2020
- Amendments to SFAS 15: Investment in Associates and Joint Ventures, this amendments
stipulate that the entity also applies SFAS 71 to financial instruments in associates or joint
ventures where the equity method is not applied. This includes long-term interests which
substantially form part of the entity's net investment in associates or joint ventures.
- Amendments to SFAS 62: Insurance Contracts, which allow those who meet certain
criteria to apply a temporary exemption from SFAS 71 (deferral approach) or choose to
apply a layered approach (overlay approach) to a defined financial asset.
- SFAS 71: Financial Instruments, which regulates the classification and measurement of
financial instruments based on the characteristics of the contractual cash flows and the
entity's business model; the expectation credit loss method for impairment that produces
information that is more timely, relevant and understood by users of financial statements;
accounting for hedges that reflects entity risk management is better by introducing more
general requirements based on management considerations.
- SFAS 72: Revenue from Contracts with Customers which sets out a comprehensive
framework to determine how, when and how much revenue can be recognized.
- SFAS 73: Leases, with early adoption, permitted specifically for entities that have
implemented SFAS 72 which establishes the principle of recognition, measurement,
presentation and disclosure of leases by introducing a single accounting model specifically
for lessee. This SFAS establishes the principle of recognizing, measuring, presenting, and
disclosing leases by introducing a single accounting model by requiring right-of-use assets
and lease liabilities. There are 2 optional exceptions in the recognition of lease assets and
liabilities, namely for: (i) short-term leases and (ii) leases for low value underlying assets.
- Amendment of SFAS 71: Financial Instruments regarding prepayment features with

negative compensation which regulates that financial assets with prepayment features that
can result to negative compensation meets qualification as contractual cashflows that are
solely payments of principal and interest.
The Group is currently evaluating and has not yet determined the effects of these accounting
standards on its consolidated financial statements.
c. Principles of consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as described in Note 1b.
Subsidiaries are entities over which the Group has control. The Group controls an entity when the
Group is exposed or has rights to variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the Subsidiary and ceases when the Group
loses control of the Subsidiary.
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c. Principles of consolidation (continued)
A change in the ownership interest of a Subsidiary, without a loss of control, is accounted for as an
equity transaction.
If the Group losses control over a Subsidiary, it derecognizes the related assets (including
goodwill), liabilities, non-controlling interest (”NCI”) and other components of equity while any
resulting gain or loss is recognized in profit or loss. Any investment retained is recognized at fair
value.
The consolidated financial statements have been prepared using the same accounting policies for
transactions and other events in similar circumstances. If a member of the Group uses accounting
policies other than those adopted for transactions and events in similar circumstances, appropriate
adjustments are made to its financial statements in preparing the consolidated financial
statements.
All intercompany accounts and transactions between the Company and its Subsidiaries have been
eliminated to reflect the financial position and the results of operations of the Group as one
business entity.
NCI represents the portion of the profit or loss and net assets of the Subsidiaries attributable to
equity interests that are not owned directly or indirectly by the Company, which are presented in
the consolidated statement of profit or loss and other comprehensive income and under the equity
section of the consolidated statement of financial position, respectively, separately from the
corresponding portion attributable to the equity holders of the parent company.
Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the
equity holders of the parent of the Group and to the NCI, even if this results in the NCI having a
deficit balance.
For consolidation purpose of subsidiaries using currency other than US Dollar as functional
currency, assets and liabilities are translated using the Bank of Indonesia middle rate at the end of
reporting period. On the other hand, revenue and expenses are translated using the average Bank
of Indonesia middle rate during the profit or loss period.
The difference arising from the translation of those subsidiaries’ financial statements into the US
Dollar is presented as “Other comprehensive income - Differences arising from translation of
financial statements” account as part of other equity components in the equity section of the
consolidated statement of financial position.
d. Business combinations
Business combinations are accounted using the acquisition method as stipulated in SFAS 22
(Revised 2015). The cost of an acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value and the amount of any NCI in the acquiree. For
each business combination, the acquirer measures the NCI in the acquiree either at fair value or at
the proportionate share of the acquiree’s identifiable net assets. Transaction costs incurred are
directly expensed and included in “Selling, General and Administrative Expenses”.
When the Group acquires a business, it assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms,
economic circumstances, and pertinent conditions as at the acquisition date. This includes the
separation of embedded derivatives in host contracts by the acquiree.
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d. Business combinations (continued)
If the business combinations is achieved in stages, the acquisition date fair value of the acquirer’s
previously held equity interest in the acquire is remeasured to fair valie at the acquisition date and
any results gain or loss is recognized in profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at
the acquisition date. Subsequent changes to the fair value of the contingent consideration which is
deemed to be an asset or liability will be recognized in accordance with SFAS 55 (Revised 2014)
either in profit or loss or as other comprehensive income. If the contingent consideration is
classified as equity, it should not be remeasured until it is finally settled within equity.
At acquisition date, goodwill is initially measured at cost being the excess of the aggregate of the
consideration transferred and the amount recognized for NCI over the net identifiable assets
acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets
of the Subsidiary acquired, the difference is recognized in profit or loss. Afterwards, impairment
test on goodwill will be examined in every end of period.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For
the purpose of impairment testing, goodwill acquired in a business combination is allocated from
the acquisition date to each of the Group’s cash-generating units (“CGU”) that are expected to
benefit from the combination, irrespective of whether other assets or liabilities of the acquirer are
assigned to those CGUs.
Where goodwill forms part of a CGU and part of the operation within that CGU is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the
operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in
this circumstance is measured based on the relative values of the operation disposed of and the
portion of the CGU retained.
In accordance with the provision of SFAS 22 (Revised 2015), if the initial accounting for a business
combination is incomplete by the end of the reporting period in which the combination occurs, the
Group shall report in its consolidated financial statements provisional amounts for the items for
which the accounting is incomplete. During the measurement period, the Group shall
retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new
information obtained about facts and circumstances that existed as of the acquisition date and, if
known, would have affected the measurement of the amounts recognized as of that date.
The Company classified its investments in PT Arun Natural Gas Liquefaction (“Arun NGL”) and
PT Badak Natural Gas Liquefaction (“Badak NGL”) as available-for-sale financial asset at cost
because the Company, in substance, does not control those companies as its operations are
controlled by the natural gas producers. These investments are measured at cost since their fair
values are not reliably measurable.
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e. Business combination under common control
Business combination transaction under common control, in the form of transfer of business within
the framework of reorganization of entities under the same business group is not a change of
ownership in economic substance, therefore it would not result in a gain or loss for the group as a
whole or to the individual entity within the same group, therefore the transactions are recorded
using the pooling-of-interests method.
The entity that disposed and received the business records the difference between the
consideration received/transferred and the carrying amount of the disposed business/carrying
amount of any business combination transaction in equity and presents it in “Additional Paid-in
Capital” account.
In applying the pooling-of-interests method, the components of the financial statements for the
period during which the business combination occurred and for other periods presented for
comparison purposes are presented in such a manner as if the combination has already occurred
since the beginning of the period in which the entities were under common control.
f. Related party transactions
The Company enters into transactions with related parties as defined in SFAS 7 (Revised 2015):
Related Party Disclosures. All significant transactions and balances with related parties are
disclosed in the notes to these consolidated financial statements.
g. Cash and cash equivalents
Cash and cash equivalents are cash on hand, cash in banks, and time deposits with maturity
periods of three months or less at the time of placement and which are not used as collateral or
are not restricted.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents are
presented net of overdrafts.
Cash and cash equivalents which are restricted for repayment of currently maturing obligations are
presented as restricted cash under the current assets section, while cash and cash equivalents
which are restricted to repay obligations maturing after one year from the date of consolidated
statement of financial position are presented as part of other non-current assets.
h. Financial instruments
i. Financial assets
Initial recognition
Financial assets are classified as financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives
designated as hedging instruments in an effective hedge. The classification depends on the
nature and purpose for which the asset was acquired and is determined at the time of initial
recognition.
Financial assets are initially recognized at fair value, and in the case of financial assets not at
fair value through profit or loss, directly attributable transaction costs are added to the fair
value.
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h. Financial instruments (continued)

i. Financial assets (continued)
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
i. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading
and financial assets designated upon initial recognition at fair value through profit or loss.
ii. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market.
iii. Available-for-sale (“AFS”) financial assets

AFS financial assets are non-derivative financial assets that are designated as available-
for-sale or are not classified in any of the two preceding categories. After initial
measurement, AFS financial assets are measured at fair value with unrealized gains or
losses recognized in equity until the investment is derecognized. At that time, the
cumulative gain or loss previously recognized in equity is reclassified to the consolidated
statement of profit or loss and other comprehensive income as a reclassification
adjustment.
iv. Held-to-maturity invesments

Non-derivative financial assets with fixed payments, and fixed liabilities and maturity
liabilities are classified as held to maturity when the Group has positive intentions and
capabilities to maintain them until maturity. After initial measurement, held to maturity
investments are measured at amortized cost using the Effective Interest Rate ("EIR")
method. Amortization of EIR is recognized as financial income in profit or loss. Losses
arising from a decrease in value are recognized in profit or loss as a financial expense.
Impairment of financial assets
Assets carried at amortized cost
At the end of each reporting period, the Group assesses whether there is objective evidence
that a financial asset or group of financial assets is impaired.
The criteria that the Group uses to determine that there is objective evidence of an impairment
loss include:
i. default or delinquency in payments by the debtor;
ii. significant financial difficulty of the debtor;
iii. a breach of contract, such as a default or delinquency in interest or principal payments;
iv. the lenders, for economic or legal reasons relating to the borrower’s financial difficulty,
granting to the borrower a concession that the lenders would not otherwise consider;
v. the probability that the debtor will enter bankruptcy or other financial reorganisation;
vi. the disappearance of an active market for that financial asset because of financial
difficulties; or
vii. observable data indicating that there is a measurable decrease in the estimated future
cash flows from a portfolio of financial assets since the initial recognition of those assets,
although the decrease cannot yet be traced yet to the individual financial assets in the
portfolio, including:
1. adverse changes in the payment status of borrowers in the portfolio; and
2. national or local economic conditions that correlate with defaults on the assets in the
portfolio.
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i. Financial assets (continued)
Impairment of financial assets
If there is an objective evidence that an impairment loss has occurred, the amount of loss is
measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original EIR. The carrying amount of the asset is reduced
either directly or through the use of a provision account. The amount of the loss is recognized
in the profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognized (such as an
improvement in the debtor’s credit rating), the previously recognized impairment loss will be
reversed either directly or by adjusting the provision account. The reversal amount is
recognized in the profit or loss and the amount cannot exceed what the amortized cost would
have been had the impairment not been recognized at the date the impairment was reversed.
Assets classified as available-for-sale
When a decline in the fair value of an available-for-sale financial asset has been recognized
directly in equity and the decline is significant and prolonged or when there is objective
evidence that the assets were impaired, the cumulative loss that had been recognized in
equity will be reclassified from equity to the profit or loss even though the financial asset has
not been derecognized. The amount of the cumulative loss that is reclassified from equity to
the profit or loss is the difference between the acquisition cost and the current fair value, less
any impairment loss on that financial asset previously recognized in the profit or loss.
The impairment loss recognized in the profit or loss on equity instrument cannot be reversed
through the profit or loss. Increases in fair value subsequent to the impairment are recognized
in OCI.
Derecognition
A financial asset, or where applicable, a part of a financial asset or part of a group of similar
financial assets, is derecognized when:
(i) The contractual rights to receive cash flows from the asset have expired; or
(ii) The Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party
under a “pass-through” arrangement, and either (a) the Group has transferred
substantially all the risks and rewards of the financial asset, or (b) the Group has neither
transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
ii. Financial liabilities

Initial recognition
Financial liabilities are classified as financial liabilities at fair value through profit or loss and
other financial liabilities that are not held for trading or not designated at fair value through
profit or loss. The Group determines the classification of its financial liabilities at initial
recognition.
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SECURING ENERGY


ii. Financial liabilities (continued)
Initial recognition (continued)
Financial liabilities are initially recognized at fair value and, in the case of financial liabilities
recognized at amortized cost, include directly attributable transaction costs.
The Group’s financial liabilities which are classified as other financial liabilities include short-
term loans, trade payables, due to the Government, accrued expenses, long-term liabilities,
other payables, bonds payable, and other non-current payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
i. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition at fair value through profit
or loss.
Financial liabilities are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term. Derivative liabilities are also classified as held for
trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the consolidated statement
of profit or loss and other comprehensive income.
ii. Financial liabilities at amortized cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured
at cost using the EIR method. At the reporting date, the accrued interest is recorded
separately from the respective principal loans as part of current liabilities. Gains and
losses are recognized in the consolidated statement of profit or loss and other
comprehensive income when the liabilities are derecognized as well as through the
amortization process using the EIR method.
Derecognition
When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and the
recognition of a new liability, and the difference in the respective carrying amounts is
recognized in the consolidated statement of profit or loss and other comprehensive income.
A financial liability is derecognized when the obligation under the liability is discharged, or
cancelled or has expired.
Effective interest rate (“EIR”) method
The EIR method is a method of calculating the amortized cost of a financial asset and of
allocating interest income over the relevant period.
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iii. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the consolidated
statement of financial position, when there is a legally enforceable right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the asset
and settle the liability simultaneously.
iv. Derivative financial instruments and hedge accounting
The Group uses derivative foreign currency forward and option contracts to hedge its foreign
currency risks. Such derivative financial instruments are initially recognized at fair value on the
date on which a derivative contract is entered into and are subsequently remeasured at fair
value. Derivatives are carried as financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.
The Company entered into forward and currency option contracts that are used as a hedge for
the exposure to changes in cash flows relating to interest payments and bonds repayment due
to changes in foreign exchange rates. Such forward and option contracts do not meet the
criteria of hedge accounting.
i. Receivables
Trade and other receivables are initially recognized at fair value and are subsequently measured
at amortized cost using the effective interest method, less provision for any impairment. If
collection is expected in one year or less (or in the normal operating cycle of the business if
longer), these receivables are classified as current assets. Otherwise, these receivables are
classified as non-current assets.
j. Inventories
Crude oil and oil product inventories are recognized at the lower of cost or net realizable value.
Cost is determined based on the average method and comprises all costs of purchases, costs of
conversion and other costs incurred in bringing the inventory to its present location and current
condition.
The net realizable value of subsidized fuel products (“BBM”) are recognized at the lower price of
the next month the Government decreed price and formula price.
The net realizable value of 3 kg LPG cylinders is the Aramco LPG contract price plus distribution
costs and a margin (alpha), less the estimated costs of completion and the estimated costs
necessary to make the sale.
Materials such as spare parts, chemicals and others are stated at average cost. Materials exclude
obsolete, unusable and slow-moving materials which are recorded as part of other assets under
the non-current assets section.
A provision for obsolete, unuseable and slow-moving materials is provided based on

management’s analysis of the condition of such materials at the end of the year.
k. Prepayments and advances
Prepayments are amortized on a straight-line basis over the estimated beneficial periods of the
prepayments.
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l. Assets held for distribution to the Company
Assets held for distribution to the Company are recognized at the lower of carrying amount and fair
value less costs to sell.
m. Long-term investments
i. Investments in associates
Associates are all entities over which the Group has significant influence but not control,
generally accompanying a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method of accounting and are
initially recognized at cost. The Group’s investment in associates includes goodwill identified
on acquisition, net of any accumulated impairment loss.
The Group’s share of its associates’ post-acquisition profits or losses is recognized in the profit
or loss, and its share of post-acquisition movements in other comprehensive income is
recognized in OCI.
Dilution gains and losses arising from investments in associates are recognized in the profit or
loss.
ii. Investment property
Investment property consists of land and buildings held by the Group to earn rental income or
for capital appreciation, or both, rather than for use in the production or supply of goods or
services, administrative purposes or sale in the normal course of business.
An investment property is measured using the cost model that is stated at cost including
transaction costs less accumulated depreciation and impairment losses, if any, except for land
which is not depreciated. Such cost includes the cost of replacing part of the investment
property, if the recognition criteria are satisfied, and excludes operating expenses involving the
use of such property.
Building depreciation is computed using the straight-line method over the estimated useful
lives of buildings ranging from 10 (ten) to 25 (twenty-five) years.
An investment property is derecognized upon disposal or when such investment property is

permanently withdrawn from use and no future economic benefits are expected from its
disposal. Gains or losses arising from the derecognition or disposal of investment property are
recognized in the profit or loss in the year such derecognition or disposal occurs.
Transfers to investment property are made when there is a change in use, evidenced by the
end of owner-occupation or commencement of an operating lease to another party. Transfers
from investment property are made when there is a change in use, evidenced by the
commencement of owner-occupation.
For a transfer from investment property to owner-occupied property, the Group uses the cost
method at the date the change occurs. If an owner-occupied property becomes an investment
property, the Group records the investment property in accordance with the fixed asset
policies up to the date of change in use.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (continued)
n. Fixed assets
The Group applies accounting policy on fixed assets as stipulated in SFAS 16 (Revised 2015), as
follows:
Direct ownership
Land is recognized at cost and not depreciated. Fixed assets are initially recognized at cost and
subsequently, except for land, carried at cost less accumulated depreciation and any impairment
losses.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,
only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. The Group recognized significant repair
and maintenance costs as fixed assets. The carrying amount of the replaced part is derecognized.
All other repairs and maintenance are charged to the profit or loss during the financial period in
which they are incurred.
Initial legal costs incurred to obtain legal rights are recognized as part of the acquisition cost of the
land, and these costs are not depreciated. Costs related to renewal of land rights are recognized
as intangible assets and amortized during the period of the land rights.
Fixed assets, except land, are depreciated using the straight-line method over their estimated
useful lives as follows:
Years
Tanks, pipeline installations and other equipment 5-25

Refineries 10-20
Buildings 5-25
Ships and aircrafts 6-25
Moveable assets 5-20
Major repairs and maintenance 3
At each financial year-end, the residual values, useful lives and methods of depreciation of assets
are reviewed and adjusted prospectively, as appropriate.
When assets are retired or otherwise disposed of, their carrying values are eliminated from the
consolidated financial statements, and the resulting gains and losses on the disposal of fixed
assets are recognized in the profit or loss.
Assets under construction
Assets under construction represent costs for the construction and acquisition of fixed assets and
other costs. These costs are transferred to the relevant fixed asset account when the construction
is complete. Depreciation is charged from the date the assets are available for use.
o. Leases
The Group classifies leases based on the extent to which risks and rewards incidental to the
ownership of a leased asset are vested upon the lessor or the lessee, and the substance of the
transaction rather than the form of the contract, at the time of initial recognition.
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o. Leases (continued)
Group as Lessee
i. A lease is classified as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership of the leased assets. Such leases are capitalized at the inception of the
lease at the fair value of the leased property or, if lower, at the present value of minimum lease
payments. Lease payments are apportioned between the finance charges and reduction of the
lease liability so as to achieve a constant periodic rate of interest on the remaining balance of
the liability. Finance charges are charged directly to profit or loss.
ii. A lease is classified as an operating lease if it does not transfer substantially all the risks and
rewards incidental to ownership of the leased asset. Accordingly, the related lease payments
are recognized in profit or loss on a straight-line basis over the lease term.
Group as Lessor
Leases in which the group does not transfer substantially all the risks and rewards of ownership of
an asset are classified as operating leases initial direct costs in caused in negotiating and
arranging an operating leases are added to the carrying amount of the leased asset and
recognized over the lease term on the same basis of rental income. Contingent rents are
recognized as revenues on a straight-line basis over the lease term.
p. Oil & gas and geothermal properties
i. Exploration and evaluation assets
Oil and natural gas, as well as geothermal exploration and evaluation expenditures are
accounted for using the successful efforts method of accounting. Costs are accumulated on a
field by field basis.
Geological and geophysical costs are expensed as incurred.
Costs to acquire rights to explore for and produce oil and gas are recorded as unproved
property acquisition costs for properties where proved reserves have not yet been discovered,
or proved property acquisition costs if proved reserves have been discovered.
The costs of drilling exploratory wells and the costs of drilling exploratory-type stratigraphic
test wells are capitalized as part of assets under construction - exploratory and evaluation
wells, within oil and gas properties pending determination of whether the wells have found
proved reserves. If the well has not found proved reserves, the capitalized costs of drilling the
well are then charged to profit or loss as a dry hole expense.
Afterwards, exploration and evaluation assets are reclassified from exploration and evaluation
assets when evaluation procedures have been completed. Exploration and evaluation assets
for which commercially-viable reserves have been identified are reclassified to development
assets. Exploration and evaluation assets are tested for impairment immediately prior to
reclassification out of exploration and evaluation assets.
ii. Development assets
The costs of drilling development wells including the costs of drilling unsuccessful
development wells and development-type stratigraphic wells are capitalized as part of assets
under construction of development wells until drilling is completed. When the development well
is completed on a specific field, it is transferred to the production wells.
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p. Oil & gas and geothermal properties (continued)
iii. Production assets
Production assets are aggregated exploration and evaluation assets and development
expenditures associated with the producing wells. Production assets are depleted using a
unit-of-production method on the basis of proved developed reserves, from the date of
commercial production of the respective field.
iv. Other oil & gas and geothermal assets
Other oil & gas and geothermal properties are depreciated using the straight-line method over
the lesser of their estimated useful lives or the term of the relevant Production Sharing
Contract (“PSC”) are as follows:
Years
Installations 3-30
LPG plants 10-20
Buildings 5-30
Moveable assets 2-27
Geothermal wells 10-20
Land and land rights are stated at cost and are not amortized.
The useful lives and methods of depreciation of assets are reviewed, and adjusted
prospectively if appropriate, at least at each financial year-end. The effects of any revisions
are recognized in profit or loss, when the changes arise.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. The carrying
amount of the replaced part is derecognized. All other repairs and maintenance are charged to
the profit or loss during the financial period in which they are incurred.
The accumulated costs of the construction, installation or completion of buildings, plant and
infrastructure facilities such as platforms and pipelines are capitalized as assets under
construction. These costs are reclassified to the relevant fixed asset accounts when the
construction or installation is ready for use. Depreciation is charged from that date.
v. Ownership interest in unitization operation
A joint asset is an asset to which each party has rights and often has joint ownership. Each
party has exclusive rights to a share of the asset and the economic benefits generated from
that asset.
In a unitization, all the operating and non-operating participants combine their assets in a
producing field to form a single unit and in return receive an undivided interest in that unit. As
such, a unitization operation is a joint control asset arrangement. Under this arrangement, the
Group records its share of the joint asset, any liabilities it incurs, its share of any liabilities
incurred jointly with the other parties relating to the joint arrangement, any revenue from the
sale or use of its share of the output of the joint asset and any expenses it incurs in respect of
its interest in the joint arrangement. If the Group is the operator, the Group recognizes
receivables from the other parties (representing the other parties’ share of expenses and
capital expenditure borne by the operator) otherwise, the Group recognizes payables to the
operator.
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q. Provision for decommissioning and site restoration
The provision for decommissioning and site restoration provides for the legal obligations
associated with the retirement of oil and gas properties including the production facilities that result
from the acquisition, construction or development and/or normal operation of such assets. The
retirements of such assets, other than temporary suspension of use, are removed from service
including sale, abandonment, recycling or disposal in some other manner.
These obligations are recognized as liabilities when a constructive obligation with respect to the
retirement of an asset is incurred. An asset retirement cost equivalent to these liabilities is
capitalized as part of the related asset’s carrying value and is subsequently depreciated or
depleted over the asset’s useful life. These obligations are measured at the present value of the
expenditures expected to be required to settle the obligation using a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the obligation.
Provision for environmental issues that may not involve the retirement of an asset, where the
Group is a responsible party, is recognized when:
- the Group has a present legal or constructive obligation as a result of past events;
- it is probable that an outflow of resources will be required to settle the obligation; and
- the amount has been reliably estimated.
Asset retirement obligations for downstream facilities generally become firm at the time the
facilities are permanently shutdown and dismantled. However, these facilities have indeterminate
lives based on plans for continued operations, and as such, the fair value of the conditional legal
obligations cannot be measured, since it is impossible to estimate the future settlement dates of
such obligation. The Group performs periodic reviews of its downstream assets for any changes in
facts and circumstances that might require recognition of asset retirement obligations.
r. Revenue and expense recognition
i. Revenue
Revenue from the production of crude oil and natural gas are recognized on the basis of the
provisional entitlements method at the point of lifting. Differences between the actual liftings of
crude oil and natural gas result in a receivable when final entitlements exceed liftings of crude
oil and gas (underlifting position) and in a payable when lifting of crude oil and natural gas
exceed final entitlements (overlifting position). Underlifting and overlifting volumes are valued
based on the annual weighted average Indonesian Crude Price (“ICP”) (for crude oil) and price
as determined in the respective Sale and Purchase Contract (for natural gas).
The Company recognizes subsidy revenue as it sells the subsidy products and becomes
entitled to the subsidy.
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r. Revenue and expense recognition (continued)
i. Revenue (continued)
Revenue from sales of goods and services is recognized when the significant risks and
rewards of ownership of the goods are transferred to the buyer and when such services are
performed, respectively.
Penalty income from overdue receivables from BBM sales is recognized when the Company
and its customers agree on the amount of the penalties and there is evidence that the
customers have committed to pay the penalties.
Revenues from gas distribution and toll fees from gas transmission are recognized when the
gas is distributed or transmitted to the customers based on the gas meter readings.
Revenue arising from the operation of the asset and pipeline transmission is recognized after
the service is rendered and is measured based on the unit of gas which has been transported
during such period.
The cost and revenue involving sales of electricity among PGE, geothermal contractors and
PT Perusahaan Listrik Negara (Persero) (“PLN”) are recorded based on Energy Sales
Contracts under a Joint Operating Contracts (“JOC”). The contracts stipulate that the sale of
electricity from the JOC contractors to PLN is to be made through PGE in the same amount of
the purchase costs as the electricity from the JOCs.
Excess and/or shortfall of revenue from disparity of formula retail selling price and
Government’s stipulated retail selling price (“Disparity of Selling Price”) of certain type of fuel
(“JBT”) Diesel Fuel and special type fuel assignment ("JBKP") Premium are recognized in the
period when sale of JBT Diesel Fuel and JBKP Premium occurs and the settlement and/or
collectability of such Disparity of Selling Price is certain at the completion date of the
consolidated financial statements.
The Company records such excess and/or shortfall of revenue from the Disparity of Selling
Price in revenue from other operating activities account because it is part of the Company’s
operations.
ii. Expense
Expense is recognized when incurred on an accrual basis.
s. Pension plan and employee benefits
i. Pension obligations
Entities within the Group operate various pension schemes. The Group has both defined
benefit and defined contribution plans. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity. The Group has no legal or
constructive obligations to pay further contributions if the fund does not hold sufficient assets
to pay all employee the benefits relating to employee service in the current and prior years.
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s. Pension plan and employee benefits (continued)
i. Pension obligations (continued)
The Group is required to provide a minimum amount of pension benefit in accordance with
Labour Law No. 13/2003 or the Group’s Collective Labour Agreement (“the CLA”), whichever
is higher. Since the Labour Law or the CLA sets the formula for determining the minimum
amount of pension benefits, in substance, pension plans under the Labour Law or the CLA
represent defined benefit plans.
The liability recognized in the statement of financial position in respect of the defined benefit
pension plans is the present value of the defined benefit obligation at the end of the reporting
date less the fair value of plan assets.
The defined benefit obligation is calculated annually by independent actuaries using the
projected unit credit method.
Expense charged to profit or loss includes current service costs, interest expense/income, past
service cost and gains and losses on settlements. Gains or losses on the curtailment or
settlement of a defined benefit plan are recognized when the curtailment or settlement occurs.
Remeasurements arising from defined benefit retirement plans are recognized in OCI.
Termination benefits are payable when an employee’s employment is terminated by the Group
before the normal retirement date, or whenever an employee accepts voluntary redundancy in
exchange for these benefits.
The Group recognizes the termination benefits at the earlier of the following dates: (a) when
the Group can no longer withdraw the offer of those benefits; and (b) when the Group
recognizes restructuring costs involving the payment of termination benefits.
ii. Other post-employment obligations
Companies within the Group provide “post retirement” healthcare benefits to their retired
employees. This benefit is eligible for the employee that remains working up to retirement age
and approaching a minimum service period. The expected cost of this benefit is accrued over
the period of employment using the projected unit credit method. This obligation is valued
annually by independent qualified actuaries.
t. Transactions and balances in non-US Dollar denomination
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the functional
currency).
Non-US Dollar currency transactions are translated into US Dollar using the exchange rates
prevailing at the dates of the transactions. At each reporting date, monetary assets and liabilities
denominated in non-US Dollar currency are translated into US Dollar using the closing exchange
rate. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at period-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognized in the profit or loss, except when deferred in equity as qualifying
cash flows hedges and qualifying net investment hedges.
For domestic and foreign subsidiaries that are not integral to the Company’s operations and for
which the functional currency is not the US Dollar, the assets and liabilities are translated into US
Dollar at the exchange rates prevailing at the date of statement of financial position.
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t. Transactions and balances in non-US Dollar denomination (continued)
The exchange rates used as of December 31, 2018 and 2017 are as follows (round to two decimal
places):
December 31, 2018 December 31, 2017

1,000 Rupiah/US Dollar 0.07 0.07
Singapore Dollar/US Dollar 0.73 0.75
100 Japanese Yen/US Dollar 0.91 0.89
Hong Kong Dollar/US Dollar 0.13 0.13
Euro/US Dollar 1.14 1.19
Malaysian Ringgit/US Dollar 0.24 0.25
Algeria Dinar/US Dollar 0.01 0.01
u. Income tax
Current tax assets and liabilities are measured at the amount expected to be refunded from or paid
to the taxation authority. The tax rates and tax regulations used to calculate these amounts are
those that have been enacted or substantively enacted at the reporting date in the country where
the Group operates and produce taxable income.
Interest and penalties are presented as part of income or other operating expenses because they
are not considered as part of the income tax expense
The Group periodically evaluates positions reported in Annual Tax Returns ("SPT") in connection
with situations in which tax rules that apply require interpretation. Where appropriate, the Group
determines the allowance based on the amount expected to be paid to the tax authorities including
consideration of the decision of the tax court and the Supreme Court if the company filed an
appeal.
Corrections to taxation obligations are recorded when an assessment is received, or for

assessment amounts appealed against by the Group, when: (1) the result of the appeal is
determined, unless there is significant uncertainty as to the outcome of such an appeal, in which
event the impact of the amendment of tax obligations based on an assessment is recognized at
the time of making such appeal, or (2) at the time based on knowledge of developments in similar
cases involving matters appealed, in rulings by the Tax Court or the Supreme Court, where a
positive appeal outcome is adjudged to be significantly uncertain, in which event the impact of an
amendment of tax obligations is recognized based on the assessment amounts appealed.
In income tax calculation, the Company recognizes revenue from Disparity of Selling Price in the
amount of the value of the receivables before adjusting for fair value (Note 9a). Difference in value
of receivables with fair value is recognized as deferred tax assets. Recovery from adjusting the fair
value of receivables in subsequent years will be recorded as interest income. The interest income
is not recognized as an object of income tax but as a reversal of previously deferred tax assets.
Deferred Tax
Deferred tax is recognized using the liability method for temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
i. deferred tax liabilities that occur from the initial recognition of goodwill or from assets or
liabilities from transactions that are not business combination transactions, and at the time of
the transaction do not affect accounting profit and taxable / taxable income;
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SECURING ENERGY


u. Income tax
Deferred Tax (continued)
ii. from taxable temporary differences in investments in subsidiaries, associated companies and
interests in joint arrangements, which when reversed can be controlled and it is probable that
the temporary differences will not be reversed in the near future.
Deferred tax assets are recognized for all deductible temporary differences, unused tax credit
balances and accumulated unused tax losses. Deferred tax assets are recognized to the extent
that it is probable that the amount of taxable income will be sufficient to be compensated with
deductible temporary differences, and the application of unused tax credits and taxable
accumulated losses that can be used, except:
i. if deferred tax assets arise from the initial recognition of an asset or liability in a transaction
that is not a business combination transaction and does not affect the accounting profit or
taxable income/tax loss; or
ii. from temporary differences that can be deducted from investments in subsidiaries, associated
companies and interests in joint arrangements, deferred tax assets are only recognized if it is
probable that the temporary differences will not be reversed in the near future and taxable
profits can be compensated by the temporary difference.
The carrying amount of deferred tax assets is reviewed at each reporting date and is reduced if the
taxable income may not be sufficient to compensate for part or all of the benefits of the deferred
tax asset. Deferred tax assets that are not recognized are reviewed at each reporting date and will
be recognized if it is probable that future taxable profits will be available for recovery.
Deferred tax assets and liabilities are measured using the tax rate that is expected to apply to the
year when the asset is recovered or the liability is settled based on the tax rates and applicable tax
regulations or substantively enacted at the reporting date.
Deferred tax assets and liabilities related to PSC activities are calculated using the tax rate that
applies to the effective date of the PSC or renewal date or date of change in the PSC.
Deferred tax on goods recognized outside of profit or loss is recognized outside of profit or loss.
Estimated deferred tax is recognized to correlate with underlying transactions in both the OCI and
directly in equity.
Value Added Tax ("VAT")
Revenues, expenses and assets are recognized net of the amount of VAT except:
i. VAT that arises from the purchase of an asset or service that cannot be credited by the tax
office, in which case the VAT is recognized as part of the acquisition cost of the asset or as
part of the items applied for expenses; and
ii. Receivables and payables presented include the amount of VAT.

VAT on subsidies and/or price disparity will be recorded by the Company when submitting
payments for subsidies and/or price disparity to the Directorate General of Budget.
Final Tax
In accordance with taxation regulations in Indonesia, final tax is imposed on the gross value of the
transaction, and is still imposed even if losses are incurred by the party carrying out the
transaction.
Final tax is not included in the scope regulated by SFAS 46: Income Tax.
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v. Segment information
An operating segment is a component of an enterprise:
a. that engages in business activities from which it may earn revenues and incur expenses
(including revenue and expenses related to the transactions with different components within
the same entity);
b. whose operating results are regularly reviewed by the enterprise’s chief operating decision
maker to make decisions about resources to be allocated to the segment and to assess its
performance; and
c. for which discrete financial information is available.
w. Impairment of non-financial assets

Assets that have an indefinite useful life - for example, goodwill or intangible assets not ready for
use - are not subject to amortization and are tested annually for impairment.
Assets that are subject to amortization or depreciation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognized in the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use. For purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (Cash-Generating Units or CGUs).
Non-financial assets other than goodwill that suffer an impairment are reviewed for possible
reversal of the impairment at each reporting date.
x. Bond issue costs
Bond issue costs are presented as a deduction from bonds payable as part of non-current
liabilities in the consolidated statement of financial position.
The difference between net proceeds and nominal value represents a discount which is amortized
using the EIR method over the term of the bond.
y. Joint arrangements
The Group is a party to a joint arrangement when there is a contractual arrangement that confers
joint control over the relevant activities of the arrangement to the Group and at least one other
party. Joint control is assessed under the same principles as control over subsidiaries.
The Group classifies its interests in joint arrangements as either:
a. Joint ventures: where the Group has rights to only the net assets of the joint arrangement
b. Joint operations: where the Group has both the rights to assets and obligations for the
liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group considers:
a. the structure of the joint arrangement;
b. the legal form of joint arrangements structured through a separate vehicle;
c. the contractual terms of the joint arrangement agreement;
d. any other facts and circumstances (including any other contractual arrangements).
The Group recognizes its interest in joint venture using equity method.
Any premium paid for an investment in a joint venture above the fair value of the Group's share of
the identifiable assets, liabilities and contingent liabilities acquired is capitalized and included in the
carrying amount of the investment in joint venture. Where there is objective evidence that the
investment in a joint venture has been impaired, the carrying amount of the investment is tested for
impairment in the same way as non-financial assets.
The Group accounts for its interests in joint operations by recognising its share of assets, liabilities,
revenues and expenses in accordance with its contractually conferred rights and obligations.
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z. Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
aa. Dividends
Dividend distribution to the shareholders is recognized as a liability and deducted from equity in
the Group consolidated financial statements in the period in which the dividends are declared.
ab. Borrowing costs

Borrowing costs are interest and exchange differences on foreign currency denominated
borrowings and other costs (amortization of discounts/premiums on borrowings, etc) incurred in
connection with the borrowing of funds.
Borrowing costs which are directly attributable to the acquisition, construction, or production of
qualifying assets are capitalized as part of the acquisition cost of the qualifying assets. Other
borrowing costs are recognized as expense in the period in which they are incurred.
The Group ceases capitalizing borrowing costs when substantially all the activities necessary to
prepare the qualifying asset for its intended use or sale are complete.
ac. Fair value measurement
The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:
- in the principal market for the asset or liability or;
- in the absence of a principal market, in the most advantageous market for the asset or liability.
A fair value measurement of a non-financial asset takes into account a market participant’s ability
to generate economic benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best use.
All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized within the fair value hierarchy as follows:
- Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities;
- Level 2 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable; and
- Level 3 - valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
ad. Completion of consolidated financial statements
The Group's consolidated financial statements have been completed and authorized to be issued
by the Company's Directors on May 28, 2019.
3. MANAGEMENT’S USE OF ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

In the application of the Group’s accounting policies, which are described in Note 2 to the consolidated
financial statements, management is required to make estimates, judgements and assumptions about
the carrying amounts of assets and liabilities that are not readily apparent from other sources.
These estimates and assumptions are based on historical experience and other factors that are
considered to be relevant.
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3. MANAGEMENT’S USE OF ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (continued)

a. Judgements
The following judgements are made by management in the process of applying the Group’s
accounting policies:
i. Exploration and evaluation expenditures
The Group’s accounting policies for exploration and evaluation expenditures result in certain
items of expenditure being capitalized for an area of interest where it is considered likely to be
recoverable by future exploitation or sale or where the activities have not reached a stage
which permits a reasonable assessment of the existence of reserves. This policy requires
management to make certain estimates and assumptions as to future events and
circumstances, in particular whether an economically viable extraction operation can be
established.
ii. Development expenditures
Development activities commence after a project is sanctioned by the appropriate level of

management. Judgement is applied by management in determining when a project is
economically viable.
iii. Uncertain tax exposure
Based on the tax regulations currently enacted, the management assessed if the amounts
recorded under claim for tax refund are recoverable and refundable from the Tax Office.
Further, the management also assessed possible liability that might arise from the tax
assessment under objection.
Significant judgment is involved in determining the provision for corporate income tax and
other taxes on certain transactions. Uncertainties exist with respect to the interpretation of
complex tax regulations and the amount and timing of future taxable income. The Group
makes an analysis of all tax positions related to income taxes to determine if a tax liability for
unrecognized tax benefit should be recognized.
iv. Recognition of Disparity of Selling Price of JBT Diesel Fuel and JBKP Premium
Based on Presidential Regulation No. 43 Year 2018 dated May 25, 2018 covering Amendment
to Presidential Regulation No. 191 Year 2014, Provision, Distribution and HJE Fuel Oil, it is
stated that in the event, based on the Audit Board of the Republic of Indonesia (BPK)’s audit
results in 1 (one) fiscal year, that there are the excess and/or shortfall of revenue from the
assigned business entity as a result of Government’s stipulated retail sellling price of fuel oil,
the Minister of Finance (“MoF”), after coordinating with the Minister of Energy and Mineral
Resources (“MoEMR”) and the Minister of State-Owned Enterprises (“MoSOE”), will establish
the policy for excess and/or shortfall of revenue of the business entity.
Management's confidence to record excess and/or shortfall of revenue from Disparity of
Selling Price in the period when sale of JBT Diesel Fuel and JBKP Premium occurs, if the
settlement and/or collectability of such Disparity of Selling Price is certain, which is mainly
supported by the transfer of all risks and rewards to consumers across Indonesia areas and
the Company retains neither continuing managerial involvement and effective control over JBT
Diesel Fuel and JBKP Premium when the sale occurred and BPK’s audit results on Disparity
of Selling Price is received by the Group. In respect of the shortfall of revenue from Disparity of
Selling Price, the collectabilty of revenue from Disparity of Selling Price is certain when the
Decision Letter from MoF ("Decision Letter") has been received by the Company prior to the
completion of the consolidated financial statements. The Group records such excess and/or
shortfall of revenue from Disparity of Selling Price in revenue from other operating activities
account because it is part of the Company’s operations.
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b. Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial period are disclosed below. The Group based its
assumptions and estimates on parameters available when the consolidated financial statements
were prepared.
i. Impairment of non-financial assets
In accordance with the Group’s accounting policy, each asset or CGU is evaluated every
reporting period to determine whether there are any indications of impairment.
The determination of fair value and value in use requires management to make estimates and
assumptions about expected production and sales volumes, commodity prices (considering
current and historical prices, price trends and related factors), reserves, operating costs,
decommissioning and site restoration cost, and future capital expenditure. These estimates
and assumptions are subject to risk and uncertainty; hence there is a possibility that changes
in circumstances will alter these projections, which may have an impact on the recoverable
amount of the assets.
ii. Reserves estimates
Proved oil and gas reserves are the estimated quantities of crude oil and natural gas which
geological and engineering data demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs under existing economic and operating conditions. Proved
reserves include:
(i) proved developed reserves: amounts of hydrocarbons that are expected to be retrieved
through existing wells, facilities and operating methods; and
(ii) proved undeveloped reserves: amounts of hydrocarbons that are expected to be retrieved
following new drilling, facilities and operating methods.
The accuracy of proved reserve estimates depends on a number of factors, assumptions and
variables such as: the quality of available geological, technical and economic data, results of
drilling, testing and production after the date of the estimates, the production performance of
the reservoirs, production techniques, projecting future rates of production, the anticipated cost
and timing of development expenditures, the availability for commercial market, anticipated
commodity prices and exchange rates.
As the economic assumptions used to estimate reserves change from year to year, and
additional geological data are generated during the course of operations, estimates of
reserves may change from year to year. Changes in reported reserves may affect the Group’s
financial results and financial position in a number of ways, including:
i. Depreciation and amortization which are determined on a unit of production basis, or

where the useful economic lives of assets change.
ii. Decommissioning, site restoration and environmental provision may change where
changes in estimated reserves affect expectations about the timing or cost of these
activities.
iii. The carrying value of deferred tax assets/liabilities may change due to changes in
estimates of the likely recovery of the tax benefits.
The Group has established proven reserves based on the principle of Petroleum Resources
Management System ("PRMS") 2007. The characteristics of the estimation uncertainty of
natural reservoirs of oil and gas reserve may lead to changes in the estimated reserves due to
the additional data obtained by the Group.
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b. Estimates and assumptions (continued)
iii. Oil and gas properties
The Group applies the successful efforts method for its oil and natural gas exploration and
evaluation activities.
For exploration and exploratory-type stratigraphic test wells, costs directly associated with the
drilling of those wells are initially capitalized as assets under construction within oil and gas
properties, pending determination of whether potentially economically viable oil and gas
reserves have been discovered by the drilling effort.
Such estimates and assumptions may change as new information becomes available. If the
well does not discover potentially economically viable oil and gas quantities, the well costs are
expensed as a dry hole and are reported in exploration expense.
iv. Provision for the impairment of loans and receivables
Provision for the impairment of receivables is maintained at a level considered adequate to

provide for potentially uncollectible receivables. The Group assesses specifically at each
balance sheet date whether there is objective evidence that a financial asset is impaired
(uncollectible).
The level of provision is based on past collection experience and other factors that may affect
collectability.
Loans and receivables write-offs are based on management’s decision that the financial
assets are uncollectible or cannot be realized regardless of the actions taken.
v. Due from the Government
The Group recognizes amounts due from the Government for cost subsidies for BBM products
and 3 kg LPG cylinders and marketing fees in relation to the Government’s share of crude oil,
natural gas and LNG. The Group makes an estimation of the amount due from the
Government based on the actual delivery volume parameter and rates based on Government
regulations. The amount of subsidies is subject to audit and approval by the Audit Board of the
Republic of Indonesia (“BPK”). The actual results may be different from the amounts
recognized.
vi. Depreciation, estimate of residual values and useful lives of fixed assets
The useful lives of the Group’s investment properties and fixed assets are estimated based on
the period over which the asset is expected to be available for use. Such estimation is based
on a collective assessment of similar businesses, internal technical evaluations and
experience with similar assets.
vii. Deferred tax assets
Deferred tax assets are recognized only where it is considered more likely than not that they
will be recovered, which is dependent on the generation of sufficient future taxable profits.
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b. Estimates and assumptions (continued)
viii. Provision for decommissioning and site restoration
The Group is obliged to carry out future decommissioning of oil and gas production facilities
and pipelines at the end of their economic lives. The largest decommissioning obligations
facing the Group relate to the plugging and abandonment of wells and the removal and
disposal of oil and gas platforms and pipelines in its contract area.
Most of these decommissioning events are many years in the future and the precise
requirements that will have to be met when the removal event actually occurs are uncertain.
Decommissioning technologies and costs are constantly changing, as well as political,
environmental, safety and public expectations. Consequently, the timing and amounts of future
cash flows are subject to significant uncertainty. Changes in the expected future costs are
reflected in both the provision and the related asset and could have a material impact on the
Group’s consolidated financial statements.
4. ACQUISITION, ADDITION OF PARTICIPATING INTEREST AND CHANGES IN PERCENTAGE

OF OWNERSHIP
The Group has acquired and added participating interest through acquisition transactions or
acquisitions of terminated blocks. The acquisition transactions were made in accordance with the
Group’s strategy to develop its upstream business i.e. to increase oil, gas and geothermal production
and reserves, and to expand the business overseas. The summary of the Group’s transactions during
2017 until 2018 is as follows:
Working Percentage of
Acquisition of shares area Area participation Production Owned by
Share acquisition Etablissements France Canada, Colombia, Nigeria, 72.65% Oil and Pertamina Internasional
Maurel et Prom SA (M&P) Gabon, France, Italy, Tanzania, gas Eksplorasi dan Produksi
Namibia and Myanmar
Effective
Working date of Expiry date Percentage of Contract
Acquisition of working area area Area contract of contract Participation Production period Owned by
Acquisition of Working Area Offshore North North West 19/01/2017 18/01/2037* 90% Oil and 20 years PT Pertamina
Offshore North West Java West Java Block Java gas Hulu Energi
Acquisition of Working Area Gunung Lawu Central Java 30/01/2017 29/01/2054 100% Geothermal 37 years PT Pertamina
Geothermal Gunung Lawu and East Java Geothermal
Energy
Acquisition Interest Right Unit EP Block and Central Java- 3/11/2017 16/09/2035 91.93% Oil and Until the end PT Pertamina EP
In Unitization Field Cepu Block East Java gas of PEPC’s PSC Cepu
Jambaran Tiung Biru
Acquisition of Working Area Attaka East Kalimantan 01/01/2018 24/10/2018 100% Oil and 10 months PT Pertamina
Attaka (unitization) gas Hulu Indonesia
Acquisition of Participating Interest Mahakam East Kalimantan 01/01/2018 31/12/2037 100% Oil and 20 years PT Pertamina
In Working Area Mahakam gas Hulu Indonesia
Acquisition of Working Area Seulawah Agam Aceh 09/04/2018 08/04/2055 75% Geothermal 37 years PT Pertamina
Geothermal Seulawah Agam Geothermal
Energy
Acquisition of Working Area Tuban Block East Java 20/05/2018* 19/05/2038 100% Oil and 20 years PT Pertamina
Tuban Block gas Hulu Energi
Acquisition of Working Area Ogan Komering South Sumatera 20/05/2018* 19/05/2038 100% Oil and 20 years PT Pertamina
Ogan Komering Block Block gas Hulu Energi
Acquisition Interest Right Unit Sukowati Tuban 25/06/2018 24/06/2028 100% - 20 years PT Pertamina EP
In Unitization Field Sukowati
Acquisition of Working Area Sanga Sanga East Kalimantan 08/08/2018* 07/08/2038 100% Oil and 20 years PT Pertamina
Blok Sanga Sanga Block gas Hulu Indonesia
Acquisition of Working Area OSES Block South East 06/09/2018* 05/09/2038 100% Oil and 20 years PT Pertamina
Offshore Southeast Sumatera gas Hulu Energi
Sumatera (“OSES”) Block
Acquisition of Working Area NSO Block North Sumatera 17/10/2018* 16/10/2038 100% Oil and 20 years PT Pertamina
North Sumatera gas Hulu Energi
Offshore (“NSO”) Block
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OF OWNERSHIP (continued)
Effective
Working date of Expiry date Percentage of Contract
Acquisition of working area area Area contract of contract Participation Production period Owned by
Acquisition of Working Area East East Kalimantan 25/10/2018* 24/10/2038 100% Oil and 20 years PT Pertamina
East Kalimantanand Attaka Block Kalimantan gas Hulu Indonesia
and Attaka Block
Acquisition of Working Area Jambi Merang South Sumatera 10/02/2019* 09/02/2039 100% Oil and 20 years PT Pertamina
Jambi Merang Block gas Hulu Energi
Acquisition of Working Area Raja/Pendopo South Sumatera 06/07/2019* 05/07/2039 100% Oil and 20 years PT Pertamina
Raja/Pendopo Block Block gas PT Energi
Acquisition of Working Area Salawati Papua 23/04/2020* 22/04/2040* 30% Oil and 20 years PT Pertamina
Salawati Block Block gas Hulu Energi
Acquisition of Working Area Kepala Burung Papua 15/10/2020* 14/10/2040* 30% Oil and 20 years PT Pertamina
Kepala Burung Block Block gas Hulu Energi
* (Note 4d)
a. Establishment of state-owned oil and gas Holding enterprise

On December 30, 2016, the Government of Indonesia (“GOI”) issued Government Regulation
(“PP”) No. 72/2016 as a revision to PP No. 44/2005 regarding Procedures and Administration of
State Capital Investment in State-Owned Enterprises and Limited Company. This regulation is the
legal basis for the establishment of state-owned holding enterprises that is being deliberated by
the GOI.
On February 28, 2018, the GOI issued PP No. 6/2018 regarding Additional State Capital
Investment in the Company. This regulation is to increase the GOI paid-up capital in the Company
by transfering 13,809,038,755 (full amount) B series of PT Perusahaan Gas Negara Tbk (“PGN”)’s
shares owned by the GOI, which represents 56.96% of total PGN shares, to the Company.
On March 28, 2018, the Ministry of Finance issued Decree No. 286 / KMK.06 / 2018 concerning
the determination of the value of additional state capital participation in the Company's share
capital. The decree stipulates that the value of additional state capital participation in the
Company's share capital is Rp38,136,346,046,696 (full amount).
On April 11, 2018, the Minister of State-Owned Enterprises (“MoSOE”) issued Letter
No. S-216/MBU/2018 to approve the transfer of 56.96% B series of PGN shares and additional
state capital investment in the Company amounting to Rp38,136,346,046,696 (full amount). On the
same date, the MoSOE issued Letter No. S-217/MBU/04/2018 to increase the Company’s
authorized share capital from Rp200,000,000 million to Rp600,000,000 million with nominal
amount of Rp1,000,000 (full amount) per share. This letter also approved additional issued and
paid-up capital of the Company by 38,136,347 shares or amounting to Rp38,136,346,046,696 (full
amount) or equivalent to US$2,774,157.
Further, on April 11, 2018, the MoSOE and the Company entered into an agreement regarding the
transfer of Government rights at PGN to the Company, to increase the state capital participation in
the Company.
On April 13, 2018, the Minister of Law and Human Rights issued Letter
No. AHU-0008395.AH.01.02. 2018 regarding Approval of Changes in PT Pertamina (Persero)
Articles of Association. It is stipulated that changes to Pertamina’s Article of Association has been
approved which is related to the total issued and paid-up shares of Rp171,227,044,000,000 (full
amount) or equivalent to US$16,191,204.
On May 9, 2018, the MoSOE, as the holder of PGN’s A Series Dwiwarna share, issued a Power of
attorney letter in relation to transfer of rights and authority of A series PGN share to the Company
as the majority holder of B series PGN shares. This letter is to provide PT Pertamina (Persero)
control over PGN.
The above transaction is recorded in accordance with SFAS 38 (Revised 2012) "Business
Combinations of Entities Under Common Control".
43
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SECURING ENERGY


a. Establishment of state-owned oil and gas Holding enterprise (continued)
The following is a summary of PGN’s financial information at the acquisition date:
Book value
ASSETS
Current assets 2,021,879
Non-current assets 4,442,988
Total assets 6,464,867
LIABILITIES
Current liabilities 553,560
Non-current liabilities 2,649,167
Total liabilities 3,202,727
EQUITY
Share capital 344,019
Other paid-in capital 284,339
Retained earnings
Appropriated 2,427,854
Unappropriated 223,501
Other components of equity (36,868)
Total equity attributable to owners of the parent entity 3,242,845
B series shares transfer representing 56.96% ownership of interest (1,847,125)

Consideration amount 2,774,157
Additional paid-in capital 927,032
Based on the amendment and restatement of the share purchase agreement between the
Company and PGN dated December 28, 2018, PGN officially acquired the shares of PT Pertamina
Gas ("Pertagas") owned by the Company as much as 51% (or 2,591,099 shares) worth Rp20.18
trillion, equivalent to US$1,351,955. With the acquisition of these shares, PGN effectively owned
51% of Pertagas shares including 5 subsidiaries, namely PT Pertagas Niaga, PT Perta Arun Gas,
PT Perta Daya Gas, PT Perta-Samtan Gas, and PT Perta Kalimantan Gas. In connection with this
restructuring, the Company's effective ownership of Pertagas fell from 100% to 78.05%.
b. Control over PT Nusantara Regas
The Company and PGN own 60% and 40% ownership of interest in Regas, respectively. As a
result of the establishment of state-owned oil and gas enterprise, the Company indirectly owns
82.78% ownership of interest. The management conclude that the Company has majority vote
over Regas to direct relevant activities. Therefore, the Company has control over Regas and
starting April 11, 2018, the Company consolidates Regas financial statements.
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Annual Report 2018


b. Control over PT Nusantara Regas
The following is a summary of Regas’ financial information at the date when the Company obtains
control.
Book value
ASSETS
Current assets 233,935
Non-current assets 56,116
Total Assets 290,051

LIABILITIES
Current liabilities 20,769
Non-current liabilities 12,707
Total Liabilities 33,476
EQUITY
Share capital 145,589
Retained earnings
Appropriated 43,129
Unappropriated 68,026
Other components of equity (169)
Total Equity 256,575
c. Acquisition of Etablissements Maurel et Prom SA (“M&P”) shares
M&P is a listed Company in Paris Stock Exchange which has the following production assets:
Ezanga Block in Gabon (as the operator with Working Interest (“WI”) of 80%); Mnazi Bay Field in
Tanzania (as the operator with WI 48.06%); and owns 20.46% shares in Seplat (a Company listed
in Lagos Stock Exchange, Nigeria and London Stock Exchange, England) which has several
production assets in Nigeria. M&P also has exploration assets and undeveloped discovery areas
located in Italy, France, Myanmar, Canada, Tanzania, Gabon, Colombia, and Namibia.
On August 25, 2016, the Group through PT Pertamina Internasional Eksplorasi dan Produksi
(“PIEP”), a wholly owned subsidiary of the Company, purchased all of the shares held by Pacifico
in M&P representing 47,916,026 shares corresponding to 24.53% shares ownership in M&P. PIEP
had increased its shares ownership through a tender offer process with the same terms and
conditions to all M&P’s shares.
The process of step-up acquisition through Voluntary Tender Offer is conducted in two stages. The
first phase was completed on January 25, 2017 and the payment was made on February 1, 2017,
in which PIEP owns 64.46% of M&P shares and 63.35% of voting rights, resulting in a "change of
control" of M&P. The second phase of voluntary tender over was completed on February 15, 2017
and the payment was executed on February 22, 2017, therefore, from that date PIEP becomes the
holder of:
1. 141,911,939 M&P shares, representing 72.65% of share capital and 71.39% of the voting
rights in M&P;
2. 14,641,233 pieces of ORNANE 2019 bonds, which represent 99.88% of the outstanding
bonds;
3. 10,435,331 bonds of ORNANE 2021, which represent 99.99% of the outstanding bonds.
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SECURING ENERGY


c. Acquisition of Etablissements Maurel et Prom SA (“M&P”) shares (continued)
On December 20, 2017, M&P redeemed all ORNANE 2019 and ORNANE 2021 bonds owned by
PIEP and paid in cash a nominal amount of the bonds and interest thereon, so that PIEP no longer
holds ORNANE 2019 and ORNANE 2021 bonds.
Following the completion of the shares acquisition, PIEP became the majority shareholder and has
full control over M&P.
Calculation of the fair value of identified assets and liabilities taken over by PIEP was completed
on December 31, 2017.
Fair value adjustments mainly come from the valuation of reserves and sources of oil acquired, for
exploration and / or production assets, namely Gabon, Nigeria and Tanzania.
The fair value of identified assets and liabilities arising from the acquisition of M&P are as follows:
Amount
ASSETS
Financial assets 353,653
Inventories 9,678
Prepaid taxes 70,844
Deferred tax assets 35,096
Long-term investments 94,697
Oil and gas properties 1,723,322
Other non-current assets 85,318
Total assets 2,372,608
LIABILITIES
Financial liabilities 913,431
Tax payables 39,801
Deferred tax liabilities 371,004
Employee benefit liabilities 1,143
Provision for decommissioning and site restoration 41,110
Total liabilities 1,366,489
Net assets at the acquisition date

(include deferred tax assets and liabilities) 1,006,119
Excess of book value over fair value 9,600
Fair value of net assets 1,015,719
Interest acquired 72.65%
Fair value of net assets acquired 737,920
Foreign currency translation 28,337
Bargain purchase (54,130)
Purchase consideration through cash 712,127
Below is the cash flow analysis from the acquisition of M&P:

Transaction value of the acquisition 712,127
Less: Cash from M&P (203,230)
Net cash flow to acquire control 508,897
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Annual Report 2018


c. Acquisition of Etablissements Maurel et Prom SA (“M&P”) shares (continued)
The bargain purchase amount also include gain on remeasurement of the previously held equity
interest amounting to US$42,658.
On November 5, 2018, M&P entered into an agreement with Rockover Energy Limited
("Rockover") to acquire the deferred payments owned by Rockover for a consideration of
US$10.75 million (full amount) to be paid in cash and issuance of 5,373,209 new M&P shares.
On December 12, 2018, the extraordinary general meeting of M&P shareholders approved the
delegation of authority relating to the capital increase for the purpose of transaction with Rockover
to the Board of Directors. On December 14, 2018, the Board of Directors of M&P implemented this
delegation of authority and decided to carry out the capital increase for a total nominal amount of
€4,137,371 (full amount) through issuance of 5,373,209 new shares with a par value of €0.77 (full
amount) each and a unit subscription price of €5.182 (full amount) each. Pursuant to the
completion of the capital increase, Rockover holds 2.68% of M&P's share capital and resulted to
the dilution of the Company’s percentage of ownership in M&P from 72.65% to 70.75%.
d. Gross split contract (“Gross Split”)
On January 13, 2017, the regulation of the Minister of Energy and Mineral Resources (“MoEMR”)
No. 08/2017 regarding principles of the Production Sharing Contract without Cost Recovery
Mechanism, also known as Gross Split PSC, was issued.
Following the expiration of Offshore North West Java (“ONWJ”) PSC on January 18, 2017,
PT Pertamina Hulu Energi ONWJ (“PHE ONWJ”and Special Unit for Upstream Oil and Gas
Business Activities ("SKK Migas") signed the ONWJ block Gross Split PSC which become
effective from January 19, 2017 with a 20 years contract period. The gross split scheme between
the Government of Indonesia and the Contractor is disclosed in Note 43d.
On April 20, 2018, PHE Tuban East Java, PHE Ogan Komering and SKK Migas signed the Tuban
Gross Split Block and Ogan Komering Block PSC which were effective from May 20, 2018 with a
contract period of 20 years. PHE OSES, PHE NSO and SKK Migas also signed the OSES Gross
Split Block which was effective from September 6, 2018 and October 17, 2018 with a contract
period of 20 years.
On May 31, 2018, PHE Raja Tempirai, PHE Jambi Merang and SKK Migas signed Gross Split
Raja/Pendopo and Jambi Merang Block PSC which become effective from July 6, 2019 and
February 10, 2019, respectively, with contract period of 20 years.
On July 11, 2018, Pertamina Hulu Salawati, Pertamina Hulu Salawati Basin, and SKK Migas
signed the Gross Split contract for the Salawati Block and the Kepala Burung Block which became
effective from April 23, 2020 and October 15, 2020, respectively.
On August 8, 2018, Pertamina Hulu Sanga and SKK Migas signed the Gross Split contract for the
Sanga Sanga block which became effective from August 8, 2018 for 20 years.
On October 25, 2018, Pertamina Hulu Attaka and SKK Migas signed a Gross Split contract for the
East Kalimantan and Attaka Block which became effective from October 25, 2018 for 20 years.
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SECURING ENERGY


e. Mahakam production sharing contract
In accordance with MoEMR Letter No. 2793/13/ME.M/2015 regarding Pengelolaan Wilayah Kerja
(“WK”) Mahakam Pasca 2017, the Company is appointed as the operator of the Mahakam
Working Area from the previous contractors Total E&P Indonesie and INPEX Corporation. To
manage such working area, the Company, through PT Pertamina Hulu Indonesia (“PHI”),
established a new entity called PT Pertamina Hulu Mahakam (“PHM”).
Mahakam PSC was signed on December 29, 2015 by Satuan Kerja Khusus Pelaksana Kegiatan
Usaha Hulu Minyak dan Gas (“SKK Migas”) and PHM with effective date on January 1, 2018. The
PSC Contract still uses the concept of production sharing, but has introduced a new sliding scale
approach to calculate the contractor entitlement based on Revenue Over Costs (“R/C”) ratio.
On October 25, 2016, the Amendment of Mahakam PSC was adopted, adding some important
points, including the certainty of the costs incurred by PHM after the date of signing the contract
but before the effective date of the contract. These costs will be included in cost recovery as
operating cost after the effective date of contract.
The PSC term is referred to PP No. 79 Year 2010, where the assume and discharge mechanism
for taxes which became incentives for KKKS are treated as part of the cost to be recovered
through the cost recovery mechanism.
The provisions are as follows:
- Crude oil and natural gas production sharing
The production share of oil between PHM and the Government amounted to 23.5294% and
76.4706%, respectively, while for production share of gas amounted to 47.0588% and
52.9412%, respectively for the first year of contract. The R/C factor in effect in the first year is
1.3 as stipulated in the PSC. For subsequent years, the Company will use the figure form the
percentage of sharing according to the table depicted below by using R/C factor at the end of
the year of the previous year.
The R/C factor itself is the contractor's cumulative revenue from the date of signing the
contract divided by the contractor's cumulative cost since the signing of the contract.
Gross Contractor Share Net Contractor Share

R/C Tax Rate
Oil Gas Oil Gas
0–1 36.25% 31.3726% 54.9020% 20% 35%
0 – 1.2 36.25% 27.4510% 50.9804% 18% 33%
1.2 – 1.4 36.25% 23.5294% 47.0588% 15% 30%
1.4 – 1.6 36.25% 19.6078% 43.1373% 12% 28%
> 1.6 36.25% 15.6863% 39.2157% 10% 25%
- First Tranche Petroleum (“FTP”)
The Government and PHM are entitled to receive an amount equal to 20% of the total
production of oil and gas each year before any deduction for recovery of operating costs and
investment credit. FTP is shared between the Government and PHM in accordance with the
entitlements to oil and gas production.
Total capital and operational expense in relation with the transfer of Mahakam block as of
December 31, 2017 amounted to US$99,780 and US$63,666, respectively recorded as oil and
gas properties and deferred expense which can be proposed for cost recovery from January 1,
2018.
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Annual Report 2018


e. Mahakam production sharing contract
- First Tranche Petroleum (“FTP”) (continued)
As at the authorization date of these consolidated financial statements, the scheme for
utilization of assets previously utilized by the predecessor Mahakam PSC contractors has not
yet been determined by the Government’s, in this case the Directorate General of State Assets
and MoEMR.
On April 20, 2018, the second amendment of Mahakam PSC was signed, adding some
important points, including the addition of Tengah working area into Mahakam working area.
This amendment was effective on October 5, 2018.
f. Addition 41.37% participating interest in Jambaran-Tiung Biru (“JTB”) unitization field
Effective November 3, 2017, PEPC acquired an additional 41.37% participating interest in the JTB
unitization field previously held by ExxonMobil Cepu Limited and Ampolex (Cepu) Pte. Ltd.,
increasing the Company’s participating interest in JTB unitization field to 82.74%. The other
contractors in JTB field on December 31, 2017 are PT Pertamina EP with 8.06% and Badan
Usaha Milik Daerah (“BUMD”) with 9.19%.
Through Letter No. 001/KETUA-BKS/XI/2017 dated November 17, 2017 and Letter
No. 004/KETUA-BKS/XII/2017 dated December 19, 2017, Cooperating Body Participating Interest
Block (“PI BKS”) Cepu conveyed the resignation of 4 Members of the PI BKS Cepu Block namely
PT Asri Dharma Sejahtera (“ADS”), PT Sarana Patra Hulu Cepu (‘SPHC’), PT Blora Patragas Hulu
(“BPH”), PT Petrogas Jatim Utama Cendana (“PJUC”), which the four members stated they would
not participate in the development of the Jambaran-Tiung Biru Field Gas project (JTB) starting
January 1, 2018.
Effective January 1, 2018, the Company added a 9.19% participating interest in the JTB unitization
field previously owned by the BKS (ADS, SPHC, BPH, PJUC) so that the Company's participating
interest in the JTB unitization field becomes 91.93%. Payment for this acquisition is valued at
US$16,764. The acquisition of this participating interest is recorded as an oil and gas asset.
g. Establishment of PT Pertamina Hulu Rokan (“PHR”)
Based on the Decree of MoEMR No. 1923K/10/MEM/2018 dated August 6, 2018 concerning
Agreement on Management of Establishment of Principal Forms and Conditions (Terms and
Conditions) of Cooperation Contracts in Rokan Work Areas, one of the requirements that must be
fulfilled by Pertamina includes preparing a new subsidiary, signature bonus and payment of work
commitments.
On December 20, 2018, PT Pertamina Hulu Rokan was established based on Notarial Deed No.13
dated December 20, 2018 from Lenny Janis Ishak, S.H. Deed of establishment of PHR was
approved by the Minister of Law and Human Rights through Letter No. AHU-
0061348.AH.01.01.2018 dated December 21, 2018. PHR will manage the Rokan Block from 2021
to 2041. Total authorized capital of PHR is US$3,140,000 with paid-in capital of US$785,000. The
paid-up capital is used to pay the signing bonus to the Government of Indonesia in the amount of
US$783,980 on December 21, 2018, and is used as working capital during the first year of
managing its working area.
h. Addition of 20% of PT Pertamina EP's participating interest in Sukowati unitization field
Based on SKK Migas letter No. SRT-0493/SKKMA0000/2018/S1 dated June 25, 2018 regarding
the determination of the new unitization operator of Sukowati Field, CPA Mudi production facilities
and Cintanatomas FSO, PT Pertamina EP was appointed as the new operator of the Sukowati
Field.
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SECURING ENERGY


h. Addition of 20% of PT Pertamina EP's participating interest in Sukowati unitization field

(continued)
Based on a joint agreement regarding the management of Sukowati Field unitization, the operation
of the CPA Mudi production facility and Cintanatomas FSO dated May 16, 2018 between PT
Pertamina EP and PT Pertamina Hulu Energi Tuban East Java, it was agreed that PT Pertamina
EP had an interest participation unit of 100% (Note 43c).
i. Temporary cooperation contract of Attaka working area

The temporary cooperation contract for the Attaka work area was created and signed on
November 2, 2017, by SKK Migas and Pertamina Hulu Attaka. Based on the Letter of the Minister
of Energy and Mineral Resources ("MoEMR") the Attaka work area after October 24, 2018, was no
longer assigned to Pertamina.
j. Decrease in the percentage of ownership of the Company at PT Asuransi Tugu Pratama

Indonesia ("TPI") Tbk
On May 28, 2018, TPI became a public company by issuing 177,777,800 shares of new shares.
As a result, the percentage of the Company's ownership in TPI fell from 65.0% to 58.5%. This
reduction in the percentage of ownership does not result in a loss of Company’s control in TPI.
Thus, the impact of this transaction amounting to US$20,551 is calculated as an equity transaction
and recorded in the difference account of transactions with non-controlling interests.
5. RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS

In 2018, the Company restated the consolidated financial statements on December 31, 2017 and
January 1, 2017/December 31, 2016 and for the year ended December 31, 2017 due to the
retrospective application of SFAS 38 (Revised 2012) Business Combination of Entities Under Common
Control (Note 2e) in relation to business combination transactions of entities under common control
between the Company and PGN (Note 4a) and Control of Regas (Note 4b).
The impact of the restatement mentioned above on the Group's consolidated financial statements as of
December 31, 2017 and January 1, 2017/December 31, 2016 and for the year ended December 31,
2017 are as follows:
Consolidated statement of financial position of the group as of December 31, 2017:
As previously Proforma
reported adjustment As restated
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5,226,332 1,183,495 6,409,827
Restricted cash 89,919 29,752 119,671
Short-term investments 247,119 2,163 249,282
Trade Receivables
Related Parties 946,027 148,989 1,095,016
Third Parties 1,385,519 195,108 1,580,627
Due from the Government - current portion 1,492,625 - 1,492,625
Other receivables
Related parties 286,233 (31,179) 255,054
Third parties 430,766 189,694 620,460
Inventories 5,967,627 68,510 6,036,137
Prepaid taxes - current portion 794,236 19 794,255
Prepayments and advances 393,075 83,251 476,326
Other investments 27,328 - 27,328
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Annual Report 2018

5. RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Consolidated statement of financial position of the Group as of December 31, 2017 (continued):
NON-CURRENT ASSETS
Due from Government - net of current
portion 663,114 - 663,114
Deferred tax assets 1,304,196 66,884 1,371,080
Long-term investments 2,821,999 148,919 2,970,918
Fixed assets 10,728,017 1,711,494 12,439,511
Oil and gas, and geothermal properties 16,359,682 1,671,692 18,031,374
Prepaid taxes -
net of current portion 593,898 235,402 829,300
Other non-current assets 1,455,858 521,612 1,977,470
TOTAL ASSETS 51,213,570 6,225,805 57,439,375

LIABILITIES
Short-term loans 452,879 - 452,879
Trade payables
Related parties 56,013 (6,736) 49,277
Third parties 3,828,858 71,263 3,900,121
Due to the Government - current portion 1,027,762 22,857 1,050,619
Taxes payables
Income taxes 283,985 24,818 308,803
Other taxes 241,874 8,659 250,533
Accrued expenses 1,987,659 32,237 2,019,896
Long-term liabilities - current portion 365,959 - 365,959
Other payables
Related parties 74,228 (17,603) 56,625
Third parties 836,934 284,560 1,121,494
Deferred revenues - current portion 260,838 - 260,838
Total Short-term Liabilities 9,416,989 420,055 9,837,044
Due to the Government - net of current portion 391,577 389,049 780,626
Deferred tax liabilities 2,724,624 123,528 2,848,152
net of current portion 2,085,084 24,683 2,109,767
Bonds payables 8,498,447 1,887,426 10,385,873
Employee benefits liabilities 2,099,487 108,733 2,208,220
Provision for decommissioning and site
restoration 2,040,097 89,240 2,129,337
Deferred revenues -
net of current portion 51,621 (8,905) 42,716
Other non-current payables 79,290 5,083 84,373
Total Long-term Liabilities 17,970,227 2,618,837 20,589,064
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Consolidated statement of financial position of the Group as of December 31, 2017 (continued):
EQUITY
Share capital
Authorized - 200,000,000
Ordinary Shares at Par value
Rp1,000,000 (full amount) per share;
133,090,697 shares 13,417,047 - 13,417,047
Additional paid-in capital 2,736 - 2,736
Merging entitiy’s equity - 1,804,579 1,804,579
pending final clarification of status 1,361 - 1,361
Other equity components 487,699 - 487,699
Retained earnings
- Appropriated 6,871,101 - 6,871,101
- Unappropriated 2,540,195 - 2,540,195
23,320,139 1,804,579 25,124,718
Non-controlling interest 506,215 1,382,334 1,888,549
TOTAL EQUITY 23,826,354 3,186,913 27,013,267

Consolidated statement of financial position of the Group as of January 1, 2017/December 31, 2016:
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5,258,526 1,463,042 6,721,568
Restricted cash 122,697 - 122,697
Short-term investments 116,987 13,833 130,820
Trade Receivables
Related Parties 1,301,759 120,509 1,422,268
Third Parties 1,231,289 211,163 1,442,452
Due from the Government - current portion 1,792,457 - 1,792,457
Other receivables
Related parties 235,225 7,614 242,839
Third parties 415,704 234,094 649,798
Inventories 4,727,594 67,428 4,795,022
Prepaid taxes - current portion 567,339 282 567,621
Prepayments and advances 428,220 75,162 503,382
Other investments 43,190 - 43,190
52
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Annual Report 2018

Consolidated statement of financial position of the Group as of January 1, 2017/December 31, 2016
(continued):
NON-CURRENT ASSETS
Deferred tax assets 671,230 80,233 751,463
Long-term investments 3,156,761 172,678 3,329,439
Fixed assets 10,322,976 1,833,809 12,156,785
Oil & gas and geothermal properties 14,636,401 1,761,261 16,397,662
Prepaid taxes -
Other non-current assets 921,934 514,930 1,436,864
TOTAL ASSETS 47,233,206 6,742,888 53,976,094

LIABILITIES
Short-term loans 130,293 100,000 230,293
Trade payables
Related parties 128,760 (10,220) 118,540
Third parties 3,201,391 89,274 3,290,665
Due to the Government - current portion 930,308 22,237 952,545
Taxes payable
Income taxes 445,052 30,524 475,576
Other taxes 237,999 13,554 251,553
Accrued expenses 1,543,358 53,254 1,596,612
Long-term liabilities - current portion 573,450 148,750 722,200
Other payables
Related parties 49,270 1,677 50,947
Third parties 689,776 337,032 1,026,808
Deferred revenues - current portion 177,499 - 177,499
Total Short-term Liabilities 8,107,156 786,082 8,893,238
Due to the Government - net of current portion 332,189 400,384 732,573
Deferred tax liabilities 2,443,871 84,646 2,528,517
Bonds payables 8,492,312 1,280,344 9,772,656
Employee benefits liabilities 1,963,749 94,983 2,058,732
Provision for decommissioning and
site restoration 1,824,155 75,938 1,900,093
Deferred revenues -
net of current portion 120,155 (54,440) 65,715
Other non-current payables 54,075 8,828 62,903
Total Long-term Liabilities 17,051,483 2,786,615 19,838,098
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SECURING ENERGY

Consolidated statement of financial position of the Group as of January 1, 2017/December 31, 2016:
EQUITY
owners of the parent
Share capital
Authorized - 200.000.000
Ordinary Shares at Par value
Rp1,000,000 (full amount) per share;
2016: 133,090,697 shares
2017: 171,227,044 shares 13,417,047 - 13,417,047
Additional paid-in capital 2,736 - 2,736
Merging entity’s equity - 1,801,742 1,801,742
pending final clarification of status 1,361 - 1,361
Other equity components 664,617 - 664,617
Retained earnings
- Appropriated 4,631,441 - 4,631,441
- Unappropriated 3,147,043 - 3,147,043
21,864,245 1,801,742 23,665,987
Non-controlling interest 210,322 1,368,449 1,578,771
TOTAL EQUITY 22,074,567 3,170,191 25,244,758

Consolidated statement of profit or loss and other comprehensive income of the Group for the year
ended December 31, 2017:
Sales And Other Operating
Revenue
Domestic sales of crude oil, natural gas
geothermal energy and oil products 36,782,295 3,006,489 39,788,784
Subsidy reimbursements from the Government 3,572,084 - 3,572,084
natural gas and oil products 1,874,281 - 1,874,281
Marketing fees 25,474 - 25,474
Revenues from other operating activities 705,191 34,909 740,100
OPERATING REVENUE 42,959,325 3,041,398 46,000,723
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Annual Report 2018

Consolidated statement of profit or loss and other comprehensive income of the Group for the period
ended December 31, 2017 (continued):
Cost of goods sold and other
operating expenses
Cost of goods sold (31,117,915) (2,057,741) (33,175,656 )
Upstream production and lifting costs (3,321,895) (99,312) (3,421,207 )
Exploration costs (165,356) - (165,356 )
Expenses from other operating activities (839,864) (23,098) (862,962 )
TOTAL COST OF GOODS SOLD AND
OTHER OPERATING EXPENSES (35,445,030) (2,180,151) (37,625,181 )
GROSS PROFIT 7,514,295 861,247 8,375,542
Selling and marketing expenses (1,353,052) (237,150) (1,590,202 )

General and administrative expenses (1,395,004) (203,930) (1,598,934 )
Gain on foreign exchange - net 68,399 (10,262) 58,137
Finance income 212,779 20,295 233,074
Finance costs (670,110) (147,601) (817,711 )
joint ventures 48,379 (10,475) 37,904
Other expenses - net (850,076) 19,494 (830,582 )
(3,938,685) (569,629) (4,508,314 )
PROFIT BEFORE INCOME TAX 3,575,610 291,618 3,867,228
Income tax expense, net (1,022,991) (143,833) (1,166,824 )
PROFIT FOR THE YEAR AFTER THE
EFFECT OF MERGING ENTITIES
ADJUSTMENT 2,552,619 147,785 2,700,404
OTHER COMPREHENSIVE
INCOME/(LOSS)
Item not to be reclassified
to profit or loss in subsequent
periods (net of tax)
Remeasurement of net
employee benefits liabilities (122,732) (6,327) (129,059 )
Items to be reclassfieid
to profit or loss in subsequent
periods (net of tax)
Foreign exchange differences
statements in foreign currency 4,599 2,461 7,060
of associates (27,474) 2,340 (25,134 )
Other comprehensive income, net

of tax (145,607) (1,526) (147,133 )
TOTAL COMPREHENSIVE INCOME

FOR THE YEAR AFTER THE
EFFECTS OF MERGING ENTITIES
ADJUSTMENT 2,407,012 146,259 2,553,271
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SECURING ENERGY

Group consolidated statement of cash flows of the Group for the year ended December 31, 2017:
Cash flows from operating activities 3,577,810 499,068 4,076,878
Cash flows from investing activities (2,130,189) (249,094) (2,379,283 )
Cash flows from financing activities (1,461,032) (511,139) (1,972,171 )
Net decrease in
cash and cash equivalents (13,411) (261,165) (274,576 )
Effects of exchange rate changes on
cash and cash equivalents (18,783) (18,382) (37,165 )
Cash and cash equivalents
at beginning of the year 5,258,526 1,463,042 6,721,568
at end of the year 5,226,332 1,183,495 6,409,827
6. CASH AND CASH EQUIVALENTS
Cash on hand 4,119 8,174

Cash in banks 5,045,496 2,770,229
Time deposits 4,062,697 3,631,424
Total 9,112,312 6,409,827
The details of cash and cash equivalents based on currency and by individual bank are as follows:
Cash on hand
Rupiah 3,128 7,515
US Dollar 891 567
Others 100 92
Total cash on hand 4,119 8,174
Cash in banks
US Dollar:
Government-related entities
- PT Bank Rakyat Indonesia
(Persero) Tbk. (“BRI”) 891,329 514,299
- PT Bank Negara Indonesia
(Persero) Tbk. (“BNI”) 844,933 636,281
- PT Bank Mandiri
(Persero) Tbk. (“Bank Mandiri”) 581,752 562,533
- Other banks (each below US$10,000) 1,526 852
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Annual Report 2018

6. CASH AND CASH EQUIVALENTS (continued)

Cash in banks
US Dollar:
Third parties
- Crédit Agricole Corporate and
Investment Bank (“Crédit Agricole CIB”,
previously Calyon) 214,982 83,209
- Sumitomo Mitsui Banking Corporation 94,194 -
- Citibank. N.A. 49,440 35,603
- J.P. Morgan Chase & Co. 16,130 -
- PT Bank Sumitimo Mitsui Indonesia
(“SMBC Indonesia”) 2,515 32,293
- Other banks (each below US$10,000) 13,532 18,814
Total US Dollar accounts 2,710,333 1,883,884
Rupiah:
- Bank Mandiri 651,073 270,785
- BRI 598,851 132,696
- BNI 547,355 185,568
- PT Bank Tabungan Negara
(Persero) Tbk ("BTN") 265,065 198,404
- PT Bank BRIsyariah Tbk (“BRI Syariah”) 48,692 9
- PT BNI Syariah (“BNI Syariah”) 14,188 1.065
- Others banks (each below US$10,000) 9,745 2,664
Third parties
- PT Bank Central Asia Tbk. (“BCA”) 40,008 32,022
- Citibank. N.A. 24,875 20,965
Total Rupiah accounts 2,217,718 859,800
Euro:
Third parties
- Crédit Agricole CIB 64,889 -
- Bank Mandiri 220 123
- BNI 8 554
- BRI 1 1
Total Euro accounts 65,118 678
Malaysian Ringgit
Third parties
- RHB Bank Berhad 39,417 20,946
Cash in banks-other
Currency accounts - third parties 12,910 4,921
Total cash in banks 5,045,496 2,770,229
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6. CASH AND CASH EQUIVALENTS (continued)

Time deposits with original maturities
of three months or less
US Dollar accounts:
- BRI 508,397 1,003,976
- BNI 193,671 398,530
- BTN 127,500 17,500
- PT Bank Syariah Mandiri (“BSM”) 50,005 5
- Bank Mandiri 32,760 22,958
Third parties
- Industrial and Commercial Bank of China 20,000 -
- Citibank, N.A. 15,000 -
- PT Bank Muamalat Tbk 12,000 -
Total time deposits - US Dollar accounts 967,233 1,446,884
Rupiah accounts:
- BRI 1,351,105 999,443
- Bank Mandiri 516,931 410,020
- BNI 505,346 471,616
- BTN 454,425 129,046
- BSM 137,711 48,435
- PT Bank Rakyat Indonesia Agroniaga Tbk
(“BRI Agroniaga”) 47,807 25,834
- BNI Syariah 18,591 29,340
Third parties
- PT Bank Bukopin Tbk 12,098 24,648
Total time deposits-rupiah accounts 3,089,123 2,184,540
Total time deposits-other currency third parties 6,341 -
Total time deposits 4,062,697 3,631,424
Total cash and cash equivalents 9,112,312 6,409,827
Annual interest rates on time deposits during 2018 and 2017 were as follows:
Rupiah 3.25% - 9.00% 3.00% - 8.75%
US Dollar 0.50% - 3.37% 0.40% - 2.36%
Singapore Dollar 0.50% -
The maximum expsoure to credit risk at the end of the reporting period is the carrying amount of each
class of cash and cash equivalents mentioned above.
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Annual Report 2018

7. RESTRICTED CASH
Restricted cash are moneys in escrow accounts in US Dollar and Indonesian Rupiah, and are as
follows:
US Dollar accounts:
- Bank Mandiri 58,140 2,165
- BRI 11,725 40,469
- BNI 10,401 38,526
Third parties
- PT Bank BNP Paribas Indonesia 18,000 18,000
- SMBC Indonesia 4,000 11,752
- Other banks (each below US$10,000) 685 231
Rupiah accounts:
- BNI 3,553 3,453
- BRI 1,421 3,408
- Bank Mandiri 990 875
Third parties
- Other banks (each below US$10,000) - 792
Total restricted cash 108,915 119,671
Annual interest rates on restricted cash in 2018 and 2017 are as follows:

Rupiah 5.00% - 7.80% 2.00% - 8.50%
US Dollar 0.24% - 0.80% 0.75% - 0.80%
US Dollar accounts
The escrow accounts were related to Letters of Credit (L/C) issued for the procurement of crude oil
and other petroleum products as well as bank guarantees.
Rupiah accounts
The escrow accounts represent time deposits used as collateral for bank guarantees and performance
bonds.
8. RECEIVABLES - THIRD PARTIES
a. Trade receivables

Trade receivables 2,161,456 1,792,133
Provision for impairment (228,001) (211,506)
Total 1,933,455 1,580,627
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8. RECEIVABLES - THIRD PARTIES (continued)
a. Trade receivables (continued)
The maximum exposure to credit risk at reporting date is the carrying value of the receivables
mentioned above.
The Group does not hold any collateral as security.
Certain subsidiaries’ trade receivables were pledged as collateral for those subsidiaries long-term
loans (Note 20a).
Management believes that there is no significant concentrations on credit risk involving trade
receivables from third parties.
Movements in the provision for impairment of trade receivables are as follows:
Beginning balance 211,506 204,340

Impairment 29,957 42,001
Reversal of impairment (7,652) (33,935)
Foreign exchange differences (5,810) (900)
Net 228,001 211,506
Based on management’s review of the collectability of each balance of trade receivables as of

December 31, 2018 and 2017, management believes that the provision for impairment is adequate
to cover the potential losses as a result of uncollected third party trade receivables.
Details of trade receivables by currencies are as follows:
US Dollar 1,323,528 1,037,216

Rupiah 837,130 754,907
Euro 98 10
Singapore Dollar 700 -
Total 2,161,456 1,792,133
b. Other receivables

Reinsurance assets 333,119 243,068
Receivables from subsidiary operations in
oil and gas related activities 132,545 256,883
Others 286,788 139,060
Sub-total 752,452 639,011
Total other receivables 734,312 620,460
60
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Annual Report 2018

8. RECEIVABLES - THIRD PARTIES (continued)
b. Other receivables (continued)

Reinsurance assets represent the amount of premium paid or part of PT Asuransi Tugu Pratama
premium for prospective reinsurance and retrocession transactions.
Beginning balance (18,551) (11,635)

Recovery/(Additions) of impairment 411 (6,916)
Ending balance (18,140) (18,551)
Based on a review of the balance of other receivables at the end of the year, management
believes that the allowance for impairment losses is adequate to cover possible losses that may
arise from uncollectible other receivables.
9. DUE FROM THE GOVERNMENT

The Company:
Receivables from recognition of Disparity of
Selling Price 2,924,148 -
Receivables from subsidy reimbursements for
3 kg LPG cylinders 1,147,538 1,404,911
Receivables from subsidy reimbursements for certain
fuel (BBM) products 175,556 473,928
Receivables for reimbursement of subsidized costs
for kerosene 16,828 -
Receivables from marketing fees 72,489 49,902
Kerosene converstion 10,626 -
Others - 102
Sub-total 4,347,185 1,928,843
Subsidiaries 411,224 337,832
Sub-total 4,758,409 2,266,675

Provision for impairment - (110,936)
Total (Note 41) 4,758,409 2,155,739

Current portion (1,834,261) (1,492,625)
Non-current portion 2,924,148 663,114
Movements in the provision for impairment of amounts due from the Government are as follows:
Beginning balance 110,936 -

Impairment - 363,830
Reversal of impairment (106,085) (252,894)
Foreign exchange differences (4,851) -
Ending balance - 110,936
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SECURING ENERGY

9. DUE FROM THE GOVERNMENT (continued)
The balance of allowance for government receivables in 2017 amounting to USD110,936 related to
subsidy receivables in 2016 are result of postponement of payments in accordance with the
Directorate General of Budget Letter No. S-2616/AG/2017 dated December 12, 2017.
a. Receivables from recognition of Disparity of Selling Price
Details of receivables from recognition of Disparity of Selling Price are as follows:
Receivables from recognition of Disparity

Selling Price:
2018 2,657,132 -
2017 1,248,347 -
Sub-total 3,905,479 -
Fair value adjustments of receivables:

2018 (773,562) -
2017 (207,769) -
Sub-total (981,331) -
Net receivables amount post fair value adjustments:

2018 1,883,570 -
2017 1,040,578 -
Total (Note 31) 2,924,148 -
On July 16, 2018, BPK issued its audit results ("LHP") No. 36/AUDITAMA VII/PDTT/07/2018 on
the calculation and distribution of subsidized JBT Diesel Fuel and 3 kg LPG cylinders. Based on
such LHP, the Company is recommended to request reimbursement from the Government for the
2017 Disparity of Selling Price of JBT Diesel Fuel amounting to Rp20.79 trillion or equivalent to
US$1,444,076 (including Value Added Tax - "VAT" and Motor Vehicle Fuel Tax - "PBBKB"
amounting to Rp2.71 trillion or equivalent to US$188,358) and JBKP Premium amounting to
Rp5.51.trillion or equivalent to $382,904 (including VAT and PBBKB amounting to Rp0.72 trillion or
equivalent to US$49,944).
In accordance with the MoF Letter No. 642/MK.02/2018 dated August 24, 2018, the MoF, after
coordinating with the MoEMR and the MoSOE, issued a policy that the Government would
reimburse the Company's revenue shortfall from the sale of JBT Diesel Fuel in accordance with
BPK’s LHP.
On May 20, 2019, the BPK issued its LHP with Specific Purposes on the Sales and Distribution of
Fuel Oil and 3kg LPG Cylinders, and Calculation of JBT Diesel Fuel & 3kg LPG Cylinders
Subsidized in 2018 to PT Pertamina (Persero), PT AKR Corporindo Tbk., and other related
agencies in North Sumatera, Riau, South Sumatera, Lampung, Banten, DKI Jakarta, West Java,
Central Java, Yogyakarta Special Region, East Java, West Nusa Tenggara, West Kalimantan,
East Kalimantan, North Sulawesi, South Sulawesi, North Maluku, and Papua No. 31/AUDITAMA
VII/PDTT/05/2019, which was received by the Company on May 23, 2019. Based on such LHP,
among others, the Company experienced:
62
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Annual Report 2018

a. Receivables from recognition of Disparity of Selling Price (continued)
• Shortfall of revenue from Disparity of Selling Price in the distribution of JBT Diesel Fuel in 2018
amounting to Rp29.31 trillion or equivalent to $2,024,203 (including VAT and PBBKB
amounting to Rp.4.18 trillion or equivalent to US$288,943);
• Shortfall of revenue from Disparity of Selling Price in the distribution of JBT Kerosene in 2018
amounting to Rp243.68 billion or equivalent to US$16,828 (excluding VAT) due to the
determination of Market Index Prices ("HIP") and Basic Prices of Kerosene JBT not in
accordance with the calculation of formula retail retail prices of fuel oil;
• Shortfall of revenue from Disparity of Selling Price in the distribution of JBKP Premium in 2018
amounting to Rp23.27 trillion or equivalent to $1,456,076 (including VAT and PBBKB), which
consists of shortfall of revenue in the distribution of JBKP Premium in Java, Madura, and Bali
(“Jamali”) and outside Java, Madura, and Bali (“Non Jamali”) areas amounting to Rp7.74
trillion or equivalent to US$534,205 (including VAT and PBBKB) and Rp15.53 trillion or
equivalent to US$921,871 (including VAT and PBBKB), respectively;
• Excess of revenue from the sale of JBKP Premium Jamali that exceeded the Government
stipulated HJE amounting to Rp234.82 billion or equivalent to US$16,216 due to the
determination of the Jamali area to be the assignment area;
Based on such LHP, the Company was recommended by BPK to coordinate with the MoF, the
MoEMR and the MoSOE in respect to the policy of regulating shortfall of revenue in the distribution
of JBT Diesel Fuel, JBT Kerosene and JBKP Premium in 2018, in accordance with applicable
procedures and regulations. Meanwhile, for the Company’s excess of revenue from sale of the
JBKP Premium Jamali, the Company was recommended by the BPK to deposit such excess of
revenue to the State Treasury.
In accordance with the MoF Letter No. S-430/MK.02/2019 dated May 28, 2019, the MoF, after
coordinating with the MoEMR and the MoSOE, issued a policy that the Government will reimburse
the Company's revenue shortfall from the sale of JBT Diesel Fuel and JBKP Premium Non Jamali
in accordance with BPK’s LHP No. 31/AUDITAMA VII/PDTT/05/2019. Meanwhile, the excess and
shortfall of the Company’s revenue from the sale of JBKP Premium Jamali become the excess and
shortfall of Company’s revenue.
Prior to receiving BPK’s LHP and the MoF letter discussed above, the Company received BPK
Letter No. 126/S/XX/05/2019 on Submission of Draft Audit Reports with Specific Purposes on the
Sales and Distribution of Fuel Oil and 3kg LPG Cylinders, and Calculation of JBT Diesel Oil & 3kg
LPG Cylinders Subsidized in 2018 to PT Pertamina (Persero), PT AKR Corporindo Tbk., and other
related agencies dated May 17, 2019 and MoSOE Letter No. SR-330/MBU/05/2019 dated May 17,
2019 concerning the bookkeeping of the disparity in retail selling price of JBT and JBKP Non
Jamali and the shortfall in of revenue from JBT Kerosene with the value in accordance with the
draft of the BPK audit report.
Based on the above matters, the Company recognized revenue and due from Government for the
2018 Disparity of Selling Price of JBT Diesel Fuel and JBKP Premium Non Jamali, prior to fair
value adjustment, amounting to Rp25.13 trillion or equivalent to US$1,735,260 (excluding VAT and
PBBKB amounting to Rp4.18 trillion or equivalent to US$813,389) and Rp13.35 trillion or
equivalent to US$921,881 (excluding VAT and PBBKB amounting to Rp 2.19 trillion or equivalent
to US$151,057), respectively and the 2017 Disparity of Selling Price of JBT Diesel Fuel, prior to
fair value adjustment, amounting to Rp18.08 trillion or equivalent to US$1,248,347 (excluding VAT
and PBBKB of Rp2.71 trillion or equivalent to US$187,252).
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SECURING ENERGY

a. Receivables from recognition of Disparity of Selling Price (continued)
Fair value adjustments on revenue recognition and due from Government from Disparity of Selling
Price in 2018 and 2017 was amounted to Rp11.20 trillion or equivalent to US$773,562 and Rp3.01
trillion or equivalent to US$207,769, respectively. The assumptions used for calculating the fair
value are as follows:
Discount interest
rate (Yield)
Government Rupiah
Payment Bonds Estimate Year
Year Installments As of December 31, 2018 of Receipt
2018 Installment 1 7.91% 2022
Installment 2 8.01% 2023
2017 Installment 1 7.38% 2020
Installment 2 7.72% 2021
b. Receivable from subsidy reimbursement for 3 kg LPG cylinders

These receivables represent subsidy reimbursements for 3 kg LPG cylinders which were
distributed to the public by the Company. This Government assignment is in the form of a Public
Service Obligations (“PSO”) and its pricing is based on a yearly contract with MoEMR.
The receivable balance for the 3 kg LPG cylinders subsidy will be settled through the APBN
mechanism in the next period.
Beginning balance 1,404,911 1,068,920

Subsidy reimbursements for 3 kg LPG cylinders
for current year (Note 29) 3,496,603 2,977,967
Correction from Government audit for subsidy
reimbursement for 3 kg LPG cylinders for the years:
- 2018 (Note 29) (1,252) -
- 2017 (Note 29) (5,661) -
- 2016 (Note 29) - (484)
Cash received (3,614,277) (2,624,110)
Foreign exchange loss (132,786) (17,382)
Ending balance 1,147,538 1,404,911
c. Receivables from reimbursement of the subsidy costs for certain fuel (BBM) products
The Company’s receivable of subsidy reimbursements for BBM products represents billings for the
BBM subsidy provided to the public.
The PSO mandate to the Company from the Government is based on annual contract with BPH
Migas. The retail sales price of the subsidised BBM products is based on MoEMR’s Decree.
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276
Annual Report 2018

c. Receivables from reimbursement of the subsidy costs for certain fuel (BBM) products
(continued)
The receivable balance of subsidy reimbursements for certain fuel (BBM) products will be settled
through the next State Budget and Expendituer (“APBN”) period.

Subsidy reimbursements for certain fuel (BBM) products
for current year (Note 29) 2,126,796 595,206
Taxes 266,693 69,617
Correction from Government audit for subsidy reimbursement
for certain fuel (BBM) products for the year:
- 2018 (Note 29) (699) -
- 2017 (Note 29) (147) -
- 2016 (Note 29) - (605)
Cash received (2,600,487) (600,992)
Foreign exchange loss (90,528) (11,696)
Ending balance 175,556 473,928
Correction of the calculation of the fuel subsidy cost reimbursement bill is based on the results of
the audit of the Supreme Audit Agency ("BPK") and recorded in the period in which the audit was
completed.
During 2017, the Company used the Government decreed price to recognize the sale of certain
types of BBM oil ("JBT") and premium Special Fuel Type Assignments ("JBKP") in accordance
with the revision of the 2017 Work Plan and Budget approved by the Board of Commissioners and
Holders Shares on January 17, 2018 and December 9, 2017.
On August 16, 2018, the MoEMR issued Regulation No. 40 of 2018 which replaces MoEMR
Regulation No. 39 of 2014 concerning the calculation of the retail selling price of fuel oil. In
accordance with the new regulation, the retail selling price of ADO per liter at the point of delivery
is calculated based on formula prices, including VAT, with a maximum subsidy of Rp2,000 (full
amount) per liter and applied retrospectively starting January 1, 2018.
d. Receivables for reimbursement of subsidized costs for kerosene
As discussed in Note 9a above, based on BPK’s LHP No. 31/AUDITAMA VII/PDTT/05/2019 dated
May 20, 2019, the Company experienced a shortfall of revenue in the distribution of JBT
Kerosene in 2018 amounting to Rp243.68 billion or equivalent to US$16,828 (excluding VAT
amounting to Rp24.38 billion or equivalent to US$1,683) due to the determination of Market Index
Prices ("HIP") and Basic Prices of JBT Kerosene were not in accordance with the calculation of
formula retail prices of fuel oil stipulated in MoEMR Decree No.62K/10/MEM/2019 concerning
Basic Formula Price for Specific Type of Fuel Oils and Special Types of Fuel Assignment. The
Company's management believes that such shortfall of revenue will be reimbursed by the
Government through a subsidy mechanism.
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SECURING ENERGY

e. Receivables from marketing fees

These receivables represent amounts due from the Government through SKK Migas to the
Company for fees from marketing activities in relation to the Government’s crude oil, natural gas
and LNG.
The details of marketing fees are as follows:

Marketing fees:
2018 22,587 -
2017 26,529 26,529
2016 23,373 23,373

f. Subsidiaries’ receivables
PEP
- Domestic Market Obligation (“DMO”) fees 106,398 90,930
- Underlifting 18,942 -
PHE
- DMO fees 15,414 25,859
- Underlifting 25,730 46,480
PEPC
PHI
- DMO fees 18,780 -
Total - subsidiaries 411,224 337,832
DMO fees represent amounts due from the Government in relation with the obligations of
subsidiaries in providing crude oil to meet domestic market needs for oil products in accordance
with their KKS.
The underlifting receivables represent receivables from subsidiaries from SKK Migas as a result of
SKK Migas, actual lifting of crude oil and gas being higher than its entitlement for the respective
year.
Based on management’s review of the collectability of each balance of the subsidiaries’

receivables, management believes that the provision for impairment is adequate to cover possible
losses as a result of uncollected subsidiaries receivables from the Government.
10. INVENTORIES
Gas 13,984 23,528
Crude oil:
Domestic production 1,026,225 1,029,639
Imported 579,765 754,663
Sub-total for crude oil 1,605,990 1,784,302
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10. INVENTORIES (continued)

Oil products:
Automotive Diesel Oil (“ADO”) 1,018,791 755,620
Premium gasoline 536,309 594,740
Pertamax, Pertamax Plus, Pertalite gasoline
and Pertadex (diesel oil) 491,005 451,999
Intermediary 337,246 272,786
Oil products in process of production 399,963 347,408
Avtur and Avigas 264,545 220,903
LPG 262,104 277,690
Petrochemicals 170,815 127,457
Industrial/Marine Fuel Oil (“IFO/MFO”) 148,621 118,515
Kerosene 94,299 75,503
Industrial Diesel Oil (“IDO”) 17,563 21,722
Others 476,999 514,176
Sub-total for oil products (Note 32) 4,218,260 3,778,519
Sub-total for gas, crude oil and oil products 5,838,234 5,586,349
Provision for decline in value of oil products
(Note 32) (167,270) (92,854)
5,670,964 5,493,495
Materials 754,228 645,825
Provision for decline in value of material (102,027) (103,183)
652,201 542,642
Total 6,323,165 6,036,137
Movements in the provision for decline in value of oil products are as follows:
Beginning balance (Note 32) (92,854) (76,542)
Addition during the year - net (74,416) (16,312)
Ending balance (Note 32) (167,270) (92,854)
Movements in the provision for decline in value of materials are as follows:

Addition (reversal) during the year - net 1,156 (72,960)
Ending balance (102,027) (103,183)
Management believes that the provision for decline in value of oil products and materials are adequate
to cover possible losses that may arise from a decline in the realizable value of inventories.
As of December 31, 2018 and 2017, inventories were insured against fire and other risks (Note 13).
Management believes that the insurance coverage amount is adequate to cover any possible losses
that may arise in relation to the insured inventories.
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11. OTHER INVESTMENTS
These investments represent net assets held for distribution to the Company in connection to the
liquidation of Pertamina Energy Trading Limited (“Petral”), Zambesi Investment Limited (“Zambesi”)
and Pertamina Energy Services Pte.Ltd. (“PES”) in accordance with the General Meeting of
Shareholder (“GMS”) decision of the Company on July 13, 2015.
On March 13, 2017, Petral has distributed its funds to the Company.
On June 16, 2017, Zambesi was liquidated.
On October 31, 2017, Petral was liquidated.
As of December 31, 2018, the balance of net assets held for distribution to the Company based on the
liquidator’s report for PES amounted to US$80,171 (2017: US$27,328) (Note 39).
Based on the Company’s GMS dated January 3, 2019, the Company’s shareholder agreed to extend
the liquidation period of PES until the completion of the dissolution/liquidation process, while at once,
do the corporate actions needed to complete the dissolution/liquidation.
12. LONG-TERM INVESTMENTS

Investment in oil and gas blocks - net 1,024,237 1,227,187
Investments in associates - net 725,846 583,694
Investment in bonds - net 391,307 391,307
Investments in joint ventures 369,922 457,405
Investment properties 280,668 284,354
Investments in shares of stock - net 6,292 6,292
Other financial assets 20,782 20,679
Total 2,819,054 2,970,918
a. Investment in oil and gas blocks
Investment in oil and gas blocks represents the Group’s investment in several oil and gas blocks
located in Malaysia which are operated by Murphy Sabah Oil Co. Ltd. and Murphy Sarawak Oil
Co. Ltd. The Group records the investment using the equity method because it has significant
influence in the undivided interest of those oil and gas blocks.
December 31, 2018
Beginning Impairment Ending
balance Addition Adjustment Transfer in value balance
Cost 1,614,965 - 96,295 - (154,773) 1,556,487
Accumulated
Amortization (387,778 ) (144,472) - - - (532,250 )
Net book value 1,227,187 (144,472) 96,295 - (154,773) 1,024,237
December 31, 2017
Beginning Impairment Ending

balance Addition Adjustment Transfer in value balance
Cost 1,698,348 - (113) - (83,270) 1,614,965
Accumulated
amortization (271,337 ) (116,441) - - - (387,778 )
Net book value 1,427,011 (116,441) (113) - (83,270) 1,227,187
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12. LONG-TERM INVESTMENTS (continued)
b. Investments in associates
The movement on investments in associates are as follows:
December 31, 2018
Percentage Share in
of effective Beginning Additions/ Other net Income/ Ending
ownership balance (deductions) changes (loss) Dividends balance
The Company
PPT Energy
Trading Co., Ltd. 50.00% 35,489 - - 12,549 - 48,038
PT Trans-Pacific
Petrochemical
Indotama
(“TPPI”) 48.59% 151,937 - - (69,932 ) - 82,005
187,426 - - (57,383 ) - 130,043
Indirect investments in
shares of associates
PT Donggi-Senoro LNG 29.00% 240,437 - 2 38,780 - 279,219
PT Asuransi Samsung Tugu 19.50% 8,741 - 19 434 (125 ) 9,069
Seplat Petroleum Development
Company Plc, Nigeria 20.46% 92,440 - 68,043 76,124 (12,059) 224,548
PT Gas Energi Jambi c) 40.00% - - - - - -
Others 19.67%-50.00% 54,650 27,458 2,298 (1,439) - 82,967
396,268 27,458 70,362 113,899 (12,184) 595,803
Total investments in
associates 583,694 27,458 70,362 56,516 (12,184 ) 725,846
December 31, 2017
Percentage Share in
of effective Beginning Additions/ Other net Income/ Ending
ownership balance (deductions) changes (loss) Dividends balance
The Company
PPT Energy
Trading Co., Ltd. 50.00% 32,499 - 1,516 2,616 (1,142 ) 35,489
PT Trans-Pacific
Petrochemical Indotama
(“TPPI”) 48.59% 204,907 - - (52,970 ) - 151,937
237,406 - 1,516 (50,354 ) (1,142 ) 187,426
shares of associates
PT Donggi-Senoro LNG 29.00% 195,083 - - 45,354 - 240,437
PT Tugu Reasuransi Indonesia a) 33.01% 29,849 - (29,849 ) - - -
PT Asuransi Samsung Tugu 19.50% 8,290 - (19 ) 648 (178 ) 8,741
Etablissements Maurel et
Prom SA b) (Note 4c) 72.65% 227,222 - (227,222 ) - - -
Seplat Petroleum Development
Company Plc, Nigeria 21.37% - 92,440 - - - 92,440
PT Gas Energi Jambi c) 40.00% - - - - - -
Others 19.67%-50.00% - 54,650 - - - 54,650
460,444 147,090 (257,090 ) 46,002 (178 ) 396,268
Total investments in associates 697,850 147,090 (255,574 ) (4,352 ) (1,320 ) 583,694
a) In 2017, the Group has control over PT Tugu Reasuransi Indonesia (“TRI”) and consolidate its financial statements
b) On February 15, 2017, PT Pertamina Internasional Eksplorasi & Produksi had a 72.65% ownership interest in Etablissements Maurel et
c) PGN has ownership interest in PT Gas Energi Jambi (“GEJ”) by 40,00% from 2015, GEJ suffered loss.
Management believes that the provision for decline in value of investments in associates is
adequate to cover possible losses that may arise from a decline in value.
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b. Investments in associates (continued)
The Group’s share of the results of its principal associates and their aggregated assets (including
goodwill) and liabilities, are as follows:
Country of Percentage of
incorporation Assets Liabilities Revenues Profit/(loss) ownership
December 31, 2018
- PPT Energy
Trading Co., Ltd. Japan 118,983 (30,486) 731,189 25,098 50.00%
- PT Trans-Pacific
(“TPPI”) Indonesia 866,155 (697,385) 65,136 (141,991) 48.59%
- PT Donggi-Senoro LNG Indonesia 2,646,556 (1,669,778) 1,174,024 133,726 29.00%
- PT Asuransi Samsung
Tugu Indonesia 61,997 (31,766) 9,046 1,446 19.50%
- Seplat Nigeria 2,526,565 (925,680) 746,140 146,576 20.46%
- PT Gas Energi Jambi Indonesia 41 (653) - - -
December 31, 2017

- PPT Energy
Trading Co., Ltd. Japan 153,471 (82,496) 692,966 5,232 50.00%
- PT Trans-Pacific
(“TPPI”) Indonesia 601,445 (1,045,454) 59,574 (50,519) 48.59%
- PT Donggi-Senoro LNG Indonesia 2,466,693 (1,627,338) 998,208 155,704 29.00%
- PT Asuransi Samsung
Tugu Indonesia 55,775 (36,791) 11,161 2,163 19.50%
- Seplat Nigeria 2,207,964 (975,232) 371,413 (3,307) 21.37%
- PT Gas Energi Jambi Indonesia 41 (653) - - -
c. Investment in bonds
As of December 31, 2018 and 2017, the balance of investment in bonds amounting to US$391,307
were investments in bonds issued by PT Trans-Pacific Petrochemical Indotama.
d. Investment in joint ventures
The movements on investments in joint ventures are as follows:

December 31, 2018
Percentage Additional Share Recovery/

of effective Beginning (deduction) Other in net (impairment) Ending
ownership balance investment changes Income Dividends in value balance
joint ventures
PT Transportasi
Gas Indonesia 59.87% 281,700 - (1,013) 27,814 (105,758 ) - 202,743
PT Perta Samtan Gas 66.00% 91,173 - 32 21,871 (23,100 ) - 89,976
PT Patra SK 35.00% 65,769 - 5,387 (8,750 ) - 62,406
PT Indo Thai Trading 51.00% 6,281 790 (791) 790 - - 7,070
PT Perta Daya Gas 65.00% 1,683 - 28 2,023 - - 3,734
Unimar LLC 50.00% 10,392 (7,176 ) (1,657 ) 6,941 (8,500 ) - -
PT Pertamina Rosneft
Pengolahan and Petrokimia 55.00% 407 - - - - - 407
PT Permata Karya Jasa 60.00% - 2,416 - 1,382 (212 ) - 3,586
Joint Venture 457,405 (3,970 ) (3,401) 66,208 (146,320 ) - 369,922
December 31, 2017
Share
Percentage in net Recovery/
of effective Beginning Additional Other income/ (impairment) Ending
ownership balance investment changes (loss) Dividends in value balance
joint ventures
PT Perta Samtan Gas 66.00% 79,383 - 7,355 17,635 (13,200 ) - 91,173
PT Patra SK 35.00% 68,919 - (26) 3,876 (7,000 ) - 65,769
PT Indo Thai Trading 51.00% 4,815 - (2 ) 1,468 - - 6,281
PT Perta Daya Gas 65.00% 1,403 - (111) 391 - - 1,683
PT Pertamina Rosneft
Pengolahan dan Petrokimia 55.00% - 407 - - - - 407
PT Elnusa CGGVeritas Seismic* 20.96% - - - - - - -
PT Transportasi Gas Indonesia 59.87% 281,167 - - 26,072 (25,539 ) - 281,700
Unimar LLC 50.00% 45,069 - - (7,177 ) (27,500 ) - 10,392
joint ventures 480,756 407 7,216 42,265 (73,239 ) - 457,405
* Note 1b.iii
**Liquidated on May 24, 2017
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d. Investment in joint ventures (continued)
The Group’s share of the results of its principal joint ventures and their aggregated assets (including goodwill)
and liabilities are as follows:
Country of Percentage of
incorporation Assets Liabilities Revenues Profit/(loss) ownership
December 31, 2018
- PT Patra SK Indonesia 232,842 (54,539) 341,114 15,391 35.00%
- PT Perta Samtan Gas Indonesia 166,010 (29,683) 121,802 33,187 66.00%
- PT Perta Daya Gas Indonesia 48,618 (42,873) 12,497 3,113 65.00%
- PT Indo Thai Trading Indonesia 35,332 (21,470) 184,779 1,549 51.00%
- PT Elnusa CGGVeritas
Seismic Indonesia 511 - - 3 20.96%
- PT Transportasi Gas Indonesia Indonesia 735,029 (96,391) 153,413 46,458 59.87%
- Unimar LLC USA 33,740 (19,387) 43,918 13,881 50.00%
- PT Permata Karya Jasa* Indonesia 6,308 (2,040) 16,301 1,383 60.00%
December 31, 2017

- PT Patra SK Indonesia 244,717 (59,696) 259,596 11,072 35.00%
- PT Perta Samtan Gas Indonesia 180,172 (42,032) 106,950 26,720 66.00%
- PT Perta Daya Gas Indonesia 53,219 (50,630) 12,469 602 65.00%
- PT Indo Thai Trading Indonesia 31,994 (19,369) 156,716 2,869 51.00%
- PT Pertamina Rosneft
Pengolahan dan Petrokimia Indonesia 739 - - - 55.00%
- PT Elnusa CGGVeritas
Seismic Indonesia 515 - - - 20.96%
- PT Transportasi Gas Indonesia Indonesia 557,875 (87,357) 151,625 43,548 59.87%
- Unimar LLC USA 49,370 (31,899) 62,993 (9,991) 50.00%
* Note 1b.iii
e. Investment properties
December 31, 2018
Beginning Transfers/ Ending
balance Additions Deductions Reclassifications balance
Historical cost:
Land and land rights 269,226 1,074 (17,368) 13,979 266,911
Buildings 43,287 1,217 - (2,402) 42,102
Total historical cost 312,513 2,291 (17,368) 11,577 309,013

Accumulated depreciation:
Buildings (28,159) (2,058) - 1,872 (28,345)
Net book value 284,354 280,668
December 31, 2017

Historical cost:
Land and land rights 288,314 - - (19,088) 269,226
Buildings 43,042 - - 245 43,287
Total historical cost 331,356 - - (18,843) 312,513
Accumulated depreciation:
Buildings (26,983) (2,301) - 1,125 (28,159)
Net book value 304,373 284,354
Depreciation expense for the periods ended December 31, 2018 and 2017 for investment
properties amounted to US$2,058 and US$2,301, respectively (Note 37).
As of December 31, 2018 all of the Group’s investment properties, except land and land rights,
were insured against fire and other possible risks (Note 13).
As of December 31, 2018 and 2017, management has estimated fair value of the investment
properties which amounted to US$1,803,218 and US$1,503,088, respectively.
Rental income from investment properties recognized for the periods ended December 31, 2018
and 2017 amounted to US$26,588 and US$11,792, respectively.
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e. Investment properties (continued)
Management believe that, there were no events or changes in circumstances which indicated
impairment in the value of investment properties as of December 31, 2018 and 2017.
f. Investments in shares of stock

Percentage Percentage
Balance of ownership Balance of ownership
The Company
- PT Seamless Pipe Indonesia
Jaya 25,026 4.97% 25,026 4.97%
- PT Arun NGL a) 170 100.00% 170 100.00%
- PT Badak NGL b) 149 55.00% 149 55.00%
Sub-total 25,345 25,345
Subsidiaries
- PT Staco Jasapratama
Indonesia 751 4.46% 751 4.46%
- PT Marga Raya Jawa Tol 2,690 6.86% 2,690 6.86%
- PT Trans Javagas Pipeline 739 10.00% 739 10.00%
- PT Asuransi Maipark
Indonesia 604 7.31% 604 7.31%
- PT Bhakti Patra
Nusantara 77 4.11% 77 4.11%
- PT Banten Gas Sinergy 3 0.14% 3 0.14%
Sub-total 4,864 4,864
Total 30,209 30,209
Net 6,292 6,292
a) in liquidation process
b) refer to note 2c
The Group classified its investments in shares of stock as available-for-sale at cost because the
Company, in subtance, does not control those companies. These investments are measured at
cost since their fair values cannot be measured reliably.
g. Other financial assets
As of December 31, 2018, other financial assets generally represent investment in bonds owned
by PT Asuransi Tugu Pratama Indonesia Tbk.
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13. FIXED ASSETS

December 31, 2018

balance Additions Deductions Reclassifications Translations balance
Acquisition cost
Direct acquisition:
Land and land rights 1,702,277 3,034 - 5,618 (5,834) 1,705,095
Tanks, pipeline
installations and
other equipments 9,168,847 28,693 (569) 131,485 (6,438) 9,322,018
Refineries 4,022,746 145,518 - 97,740 (70) 4,265,934
Buildings 1,200,885 20,252 (367) 70,994 (10,313) 1,281,451
Ships and aircrafts 2,015,720 120,523 - (26,626 ) (13,282) 2,096,335
Moveable assets 1,624,785 36,722 (5,875) 7,713 (29,707) 1,633,638
Assets under
construction 1,446,340 1,083,618 - (397,603 ) (2,438) 2,129,917
Sub-total 21,181,600 1,438,360 (6,811) (110,679 ) (68,082) 22,434,388
Finance lease assets :

Land rights 157,605 - - (155,364 ) (2,241) -
Buildings 83,987 - - 121,750 - 205,737
Tanks, pipeline
installations and
other equipments 369,534 44,097 - 1,003 - 414,634
Moveable assets 156,432 10,707 - - (124) 167,015
Sub-total 767,558 54,804 - (32,611 ) (2,365) 787,386
Total acquisition cost 21,949,158 1,493,164 (6,811) (143,290 ) (70,447) 23,221,774
Accumulated
depreciation
Direct acquisition:
Land rights (876) - - - 664 (212)
Tanks, pipeline
installations and
other equipments (4,393,822) (504,253) 42 58,559 5,153 (4,834,321)
Refineries (2,349,134) (249,586) - (307 ) 101 (2,598,926)
Buildings (477,017) (52,430) 271 (1,435 ) 3,796 (526,815)
Ships and aircrafts (775,835) (105,264) - 65,138 2,870 (813,091)
Moveable assets (969,682) (103,113) 5,697 61,156 19,138 (986,804)
Sub-total (8,966,366) (1,014,646) 6,010 183,111 31,722 (9,760,169)
Finance lease assets:

Land rights (82,872) (6,070) - 88,942 - -
Buildings (58,902) (14,272) - (88,215 ) - (161,389)
Tanks, pipeline
installations and
other equipments (210,786) (38,302) - (727 ) - (249,815)
Moveable assets (133,666) (7,877) - 4,628 77 (136,838)
Sub-total (486,226) (66,521) - 4,628 77 (548,042)
Total accumulated
depreciation (9,452,592) (1,081,167) 6,010 187,739 31,799 (10,308,211)
Provision for impairment (57,055) - 2,719 - 47 (54,289)
Net book values 12,439,511 12,859,274
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13. FIXED ASSETS (continued)

December 31, 2017

balance Additions Deductions Reclassifications Translations balance
Acquisition cost
Direct acquisition:
Land and land rights 1,663,116 29,716 - 10,259 (814) 1,702,277
Tanks, pipeline
installations and
other equipments 8,226,598 156,997 (1,855) 787,473 (366) 9,168,847
Refineries 3,815,932 175,395 (349) 31,774 (6) 4,022,746
Buildings 1,003,055 16,298 (1,984) 193,110 (9,594) 1,200,885
Ships and aircrafts 1,894,266 52,838 - 70,460 (1,844) 2,015,720
Moveable assets 1,563,969 86,287 (7,203) (29,853) 11,585 1,624,785
Assets under
construction 1,792,241 999,558 (12,896) (1,332,310) (253) 1,446,340
Sub-total 19,959,177 1,517,089 (24,287) (269,087) (1,292) 21,181,600

Land rights 122,815 - - 35,216 (426) 157,605
Buildings 83,987 - - - - 83,987
Tanks, pipeline
installations and
other equipments 305,567 63,967 - - - 369,534
Moveable assets 152,167 6,498 - (1,740) (493) 156,432
Sub-total 664,536 70,465 - 33,476 (919) 767,558
Total acquisition cost 20,623,713 1,587,554 (24,287) (235,611) (2,211) 21,949,158
Accumulated
depreciation
Direct acquisition:
Land rights (697) - - (181) 2 (876)
Tanks, pipeline
installations and
other equipments (3,883,879) (544,907) 676 34,121 167 (4,393,822)
Refineries (2,139,241) (223,626) - 13,722 11 (2,349,134)
Buildings (426,461) (59,431) 492 8,136 247 (477,017)
Ships and aircrafts (675,211) (101,882) - 849 409 (775,835)
Moveable assets (883,826) (106,150) 4,229 21,281 (5,216) (969,682)
Sub-total (8,009,315) (1,035,996) 5,397 77,928 (4,380) (8,966,366)

Land rights (70,578) (12,294) - - - (82,872)
Buildings (50,506) (8,396) - - - (58,902)
Tanks, pipeline
installations and
other equipments (165,624) (34,098) - (11,064) - (210,786)
Moveable assets (121,208) (9,216) - (4,432) 1,190 (133,666)
Sub-total (407,916) (64,004) - (15,496) 1,190 (486,226)
Total accumulated
depreciation (8,417,231) (1,100,000) 5,397 62,432 (3,190) (9,452,592)
Provision for impairment (49,697) (7,364) - - 6 (57,055)
Net book values 12,156,785 12,439,511
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Annual Report 2018

13. FIXED ASSETS (continued)
The allocation of depreciation expenses are as follows:
Cost of goods sold (Note 32) 566,412 551,911

Expenses from other operating activities (Note 35) 88,405 84,636
Selling and marketing expenses (Note 36) 328,695 362,241
General and administrative expenses (Note 37) 97,655 101,212
Total 1,081,167 1,100,000
As of December 31, 2018, the Group owned parcels of land at various locations in Indonesia with
Building Rights Title (“HGB”) period ranging from 20-30 years. Some of the HGBs are near their
expiration dates. Management believes that those HGB certificates can be extended upon their
expiration.
As of December 31, 2018 and 2017, the Group’s inventories, investment properties, fixed assets, and
oil & gas and geothermal properties, except for land and land rights (Notes 10, 12, 13, and 14), were
insured against fire and other possible risks for a total insurance coverage of US$53,391,900 and
US$50,430,767, respectively. Management believes that the insurance coverage is adequate to cover
any possible losses that may arise in relation to the insured assets.
Certain subsidiaries fixed assets were pledged as collateral for those subsidiaries long term loans
(Note 20a).
Interest capitalized as part of fixed assets for the periods ended December 31, 2018 and 2017
amounted to US$31,500 and US$25,611, respectively (Note 46a).
Management believes that the provision for impairment in the value of fixed assets as of December 31,
2018 and 2017 is adequate to cover any possible losses from impairment of fixed assets.
Assets under construction as of December 31, 2018 and 2017 consists of refineries, buildings,
vessels, installations and moveable assets.
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SECURING ENERGY

14. OIL AND GAS, AND GEOTHERMAL PROPERTIES
December 31, 2018

Acquisition cost
Direct acquisition:
Land and land rights 18,243 - - 38 18,281
Oil and gas wells 13,915,574 1,116,330 (107,073) 537,014 15,461,845
Geothermal wells 671,595 4,671 - 83,085 759,351
Installations 7,213,878 109,761 (1,195) 353,064 7,675,508
LPG plants 1,538,366 - - - 1,538,366
Buildings 173,184 1,152 - 24,277 198,613
Moveable assets 346,955 39,034 - 32,522 418,511
Sub-total 23,877,795 1,270,948 (108,268) 1,030,000 26,070,475

Exploratory and evaluation wells 1,326,425 606,380 (120,381) (431,694) 1,380,730
Development wells 2,096,876 1,163,019 (4,519) (831,877) 2,423,499
Sub-total 3,423,301 1,769,399 (124,900) (1,263,571) 3,804,229

Installations 4,672 - - - 4,672
LPG plants 12,501 - - - 12,501
Buildings 19,939 - - - 19,939
Moveable assets 195,595 - - - 195,595
Sub-total 232,707 - - - 232,707
Total acquisition cost 27,533,803 3,040,347 (233,168) (233,571) 30,107,411
Accumulated depreciation,
depletion and amortization
Direct acquisition:
Oil and gas wells (6,096,976) (965,091) 38,038 (52,132) (7,076,161)
Geothermal wells (113,904) (38,223) - - (152,127)
Installations (2,121,664) (586,590) - (9,548) (2,717,802)
LPG plants (179,681) (113,920) - - (293,601)
Buildings (36,698) (11,743) - - (48,441)
Moveable assets (214,002) (30,358) - - (244,360)
Sub-total (8,762,925) (1,745,925) 38,038 (61,680) (10,532,492)

Installations (16,695) (2,028) - - (18,723)
LPG plants (5,469) (308) - - (5,777)
Buildings (18,198) (324) - - (18,522)
Moveable assets (181,118) (280) - - (181,398)
Sub-total (221,480) (2,940) - - (224,420)
Total accumulated depreciation,

depletion and amortization (8,984,405) (1,748,865) 38,038 (61,680) (10,756,912)
Provision for impairment (518,024) (218,189) - - (736,213)
Net book values 18,031,374 18,614,286
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Annual Report 2018

14. OIL AND GAS, AND GEOTHERMAL PROPERTIES (continued)

December 31, 2017

Acquisition cost
Direct acquisition:
Land and land rights 17,651 - - 592 18,243
Oil and gas wells 10,936,067 2,030,494 (172,042) 1,121,055 13,915,574
Geothermal wells 473,810 - - 197,785 671,595
Installations 6,345,909 138,748 (144) 729,365 7,213,878
LPG plants 1,435,050 - - 103,316 1,538,366
Buildings 139,738 2,054 - 31,392 173,184
Moveable assets 306,208 9,942 - 30,805 346,955
Sub-total 19,654,433 2,181,238 (172,186) 2,214,310 23,877,795

Exploratory and evaluation wells 1,851,229 463,671 (85,882) (902,593) 1,326,425
Development wells 1,769,156 1,190,713 - (862,993) 2,096,876
Sub-total 3,620,385 1,654,384 (85,882) (1,765,586) 3,423,301

Installations 21,260 - (16,588) - 4,672
LPG plants 28,163 - - (15,662) 12,501
Buildings 19,962 - - (23) 19,939
Moveable assets 195,572 - - 23 195,595
Sub-total 264,957 - (16,588) (15,662) 232,707
Total acquisition cost 23,539,775 3,835,622 (274,656) 433,062 27,533,803
Accumulated depreciation,
depletion and amortization
Direct acquisition:
Oil and gas wells (4,582,073) (914,618) 103,496 (703,781) (6,096,976)
Geothermal wells (81,462) (32,442) - - (113,904)
Installations (1,592,282) (529,382) - - (2,121,664)
LPG plants (105,817) (58,200) - (15,664) (179,681)
Buildings (26,761) (9,937) - - (36,698)
Moveable assets (176,852) (37,150) - - (214,002)
Sub-total (6,565,247) (1,581,729) 103,496 (719,445) (8,762,925)

Installations (31,060) (2,223) 16,588 - (16,695)
LPG plants (20,517) (617) - 15,665 (5,469)
Buildings (17,787) (411) - - (18,198)
Moveable assets (180,831) (287) - - (181,118)
Sub-total (250,195) (3,538) 16,588 15,665 (221,480)
Total accumulated depreciation,

depletion and amortization (6,815,442) (1,585,267) 120,084 (703,780) (8,984,405)
Provision for impairment (326,671) (234,614) 43,261 - (518,024)
Net book values 16,397,662 18,031,374
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SECURING ENERGY

The allocation of depreciation expense are as follows:
Upstream production and lifting costs (Note 33) 1,741,040 1,578,988

General and administrative expenses (Note 37) 7,825 6,279
Total 1,748,865 1,585,267
As of December 31, 2018, all of the PGE’s, PEP, and PGN geothermal properties, except land and
land rights, were insured against fire and other possible risks under joint insurance agreement with
fixed assets and investment properties (Note 13).
Management believes that the insurance coverage is adequate to cover any possible losses that may
arise in relation to the insured oil & gas and geothermal properties.
PGE’s interest capitalized as part of geothermal properties amounted to US$24,885, and US$32,338,
as of December 31, 2018 and 2017, respectively (Note 46a).
The increase in the value of oil and gas wells in 2018 and 2017 respectively, is a result of the payment
of the Block Rokan signature bonus (Note 4g) and the consolidation of Maurel et Prom's
Etablissements Maurel et Prom.
Impairment of oil and gas properties
Management performed impairment testing in 2018 and 2017 on oil and gas with properties with
impairment indicators due to external indication from the oil price trends as well as technical and
commercial factors.
Estimated recoverable amounts and book values of the oil and gas properties impaired as of
December 31, 2018, and December 31, 2017 are as follows:
December 31, 2018
Impairment loss
(recovery)
Estimated Estimated Impairment in oil and gas
recoverable impairment loss (recovery) and geothermal
amount Book value loss (recovery) on goodwill properties
PHE and its subsidiaries 173,488 366,793 193,305 - 193,305

Pertamina EP Cepu ADK 55,046 53,708 (1,338) - (1,338)
PGN and its subsidiaries 872,528 898,750 26,222 - 26,222
Net book value 1,101,062 1,319,251 218,189 - 218,189
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Annual Report 2018

Impairment of oil and gas properties (continued)

December 31, 2017
Impairment loss
(recovery)
Estimated Estimated Impairment in oil and gas
recoverable impairment loss (recovery) and geothermal
amount Book value loss (recovery) on goodwill properties
PHE and its subsidiaries 856,112 1,097,805 241,693 6,890 234,803

PIEP and its subsidiaries 740,580 708,003 (32,577) - (32,577)
Pertamina EP Cepu 58,888 - (58,888) - (58,888)
Pertamina EP Cepu ADK 8,817 63,864 55,047 - 55,047
PGN and its subsidiaries 842,735 835,703 (7,032) - (7,032)
Net book value 2,507,132 2,705,375 198,243 6,890 191,353
The assumption of oil and gas price and the discount rate used are disclosed in Note 15d.
15. OTHER NON-CURRENT ASSETS

Restricted funds 915,221 867,332

Government contributed assets pending
final clarification of status (Note 26) 401,120 1,361
Finance lease receivables 200,770 208,908
Advances to vendors 133,406 217,704
Other receivables - third parties 80,287 243,786
Prepaid expenses 65,319 31,601
Other receivables - related parties (Note 41b) 64,907 80,349
Goodwill 53,807 53,807
Long-term employee receivables 37,530 45,652
Assets held but not used for operation 23,454 24,819
Land rights costs 18,917 21,653
Deferred charges 17,256 92,834
Intangible assets 13,711 17,771
Post-employment benefits 11,589 9,181
Non-free and non-clear assets - net 1,837 1,837
Others 46,202 58,875
Total 2,085,333 1,977,470
a. Restricted funds
US Dollar accounts
- BRI 286,789 252,149
- Bank Mandiri 14,030 47,038
- BNI 50,016 -
Third parties
- JP Morgan 31,087 24,661
- Others 540 -
382,462 323,848
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15. OTHER NON-CURRENT ASSETS (continued)
a. Restricted funds (continued)
Rupiah accounts
- BRI 290,500 296,096
- Bank Mandiri 233,993 238,692
- BNI 840 899
Third parties
Others 7,426 7,797
532,759 543,484
Total 915,221 867,332
As of December 31, 2018, PT Pertamina EP has deposited funds amounted to US$275,660 (2017:
US$252,501) in BRI and Bank Mandiri for decommissioning funds, site restoration, and other
related activities into a joint bank account held by SKK Migas and PT Pertamina EP in accordance
with instructions from SKK Migas. As of December 31, 2018, PIEP for PT Pertamina Malaysia EP
(“PMEP”) deposited funds for decommissioning site restoration and other related activities in a
joint bank account amounting to US$31,087 (2017: US$24,661).
The Company has created reserves fund for past service liabilities to employees as of December
31, 2018 and 2017 amounting to Rp7,534,125 million (equivalent to US$520,277), and
Rp7,185,952 million (equivalent to US$530,407), respectively.
As of December 31, 2018 and 2017, restrained fund for Partnership Program amounted to
Rp12,174 million (equivalent to US$840) and Rp12,174 million (equivalent to US$899),
respectively.
Included in restricted cash are time deposits which are used as bank guarantees for operational
working contracts in PT Pertamina Bina Medika, and PT Pertamina Internasional Eksplorasi and
Produksi.
b. Finance lease receivables
This account represents the non-current portion of the finance lease receivables exist from lease
arrangement between PT Kalimantan Jawa Gas ("KJG"), PGN's subsidiaries, and PT Perusahaan
Listrik Negara ("PLN") (Persero) in relation to KJG’s subsea pipelines and onshore receiveing
facility acceptance facility on land (Gas Transport Agreement ("GTA") Kalija 1 which is classified
as a finance lease transaction.
c. Advances to vendors, net
Advances to vendors 166,110 250,408

Net 133,406 217,704
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Annual Report 2018

c. Advances to vendors - net (continued)
The Company has recognized a provision for impairment to reduce an advance to vendor for oil
tanker building contract with capacity of 30,000 LTDW between the Company and Zhejiang
Chenye Shipbuilding Co. Ltd. Management believes that the provision for impairment is adequate
to cover possible losses.
d. Goodwill
Beginning Ending
balance Addition Deduction balance
December 31, 2018

PT PHE ONWJ 53,337 - - 53,337
PHE Nunukan Company 415 - - 415
PGN and its subsidiaries 55 - - 55
Total 53,807 - - 53,807
December 31, 2017

PT PHE ONWJ 53,337 - - 53,337
PHE Tuban 4,538 - (4,538 ) -
PGN and its subsidiaries 55 - - 55
Others 2,767 - (2,352 ) 415
Total 60,697 - (6,890 ) 53,807
The goodwill is allocated to the Company’s Cash Generating Unit (“CGU”) identified according to
PSC blocks.
The Group calculated the recoverable amount based on fair value less cost to sell model which
provides a higher value than the value-in-use calculation. The fair value less cost to sell was
determined by using a post-tax discounted cash flows (“DCF”) calculation.
The cash flows projections are based on production and development forecast approved by
management covering the estimated period of contract including contract extension and future
investments to increase output. The period of projections ranges from 3-30 years.
ONWJ, PHE Tuban and Other

The Group acquired PT Medco E&P Tuban (subsequently changed its name to PT PHE Tuban) in
2008 and BP West Java Ltd., (subsequently changed its name to ONWJ Ltd.) in 2009, PT PHE Oil
and Gas (“PHE OG”) and other acquisition in 2013. The Group has recorded an impairment in the
value of goodwill in 2018 amounted to nill and 2017 amounting to US$4,538 and US$2,352 (Note
39), from the PHE Blok Tuban and Ambalat Block, respectively to the carrying value of PHE OG.
PGN and its subsidiaries

In 2013, PT PGAS Telekomunikasi Nusantara (“PGASKOM”), a subsidiary of PGN, acquired 100%
equity interest of PT Telemedia Dinamika Sarana (“TDS”) with consideration paid amounting to
Rp675 million (or equivalent to US$55). PGASKOM recognized goodwill from this acquisition
amounting to US$55.
The key assumption relates to oil and gas price, was projected based on expectation of market
development given used the volatility in oil prices. The discount rate used reflects risk relating to
the relevant oil and gas industry and considering the risks of individual country of operations.
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d. Goodwill (continued)
Key assumptions used for the basis of the impairment test on December 31, 2018 are as follows:
Assumptions 2018
2019 2020 2021 2022 2023
ICP Projection US$68.60 US$67.90 US$66.20 US$66.60 US$68.00

Brent Projection US$72.00 US$71.30 US$69.60 US$70.00 US$71.60
The projection of ICP value for the years 2024 to 2030 has increased between US$1.60 to
US$1.80, while for Brent the value is between US$1.60 to US$1.90.
Gas price Based on the gas sales agreement
Discount rate 6.71% - 10.20%
Management believes the goodwill impairment is sufficient based on the result of the impairment
testing.
e. Non-free and non-clear assets - net
Non-free and non-clear assets 112,237 112,237

Net 1,837 1,837
Non-free and non-clear assets represent land located in Teluk Semangka, Lampung and certain
assets located in other areas where, as of the date of the completion of these consolidated
financial statements, the documentation and rights of the Company were still subject to completion
of the legal and settlement processes to allow the Company to fully utilize such assets.
The Company has recognized a provision for impairment to reduce the value of such assets to
their recoverable amounts. Management believes that the provision for impairment is adequate.
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Annual Report 2018

16. SHORT-TERM LOANS
Government-related entities (Note 41)

- Bank Mandiri 1,705,709 166,151
- BRI 820,154 189,027
- BNI 638,751 340
- Others (each below US$10,000) 110 -
Sub-total 3,164,724 355,518
Third parties
- PT Bank Mizuho Indonesia 203,272 10,000
- PT Bank Sumitomo Mitsui Indonesia 145,368 -
- Citibank. N.A. 145,344 ,-
- PT ANZ Panin Bank Indonesia Tbk 139,491 -
- BCA 118,934 -
- Sumitomo Mitsui Banking Corporation 97,016 10,000
- Deutsche Bank AG 93,970 32,285
- PT Bank DBS Indonesia 86,842 -
- The Hongkong and Shanghai Banking Corp (“HSBC”) 67,075 -
- PT Bank Permata Tbk 59,804 -
- PT Bank ICBC Indonesia 23,974 27,292
- PT Bank UOB Indonesia - 10,000
- Others (each below US$10,000) 1,221 7,784
Sub-total 1,182,311 97,361
Total 4,347,035 452,879
Other information related to the Group’s short-term bank loan facilities as of December 31, 2018 are as
follows:
Lenders Expiration date
Bank Mandiri June 17, 2019

BNI June 14, 2019
BRI June 17, 2019
Citibank, N.A. May 8, 2019
BNI Syariah May 31, 2019
PT Bank Mizuho Indonesia May 22, 2019
PT Bank Sumitomo Mitsui Indonesia June 26, 2019
Sumitomo Mitsui Banking Corporation April 2, 2019
PT ANZ Panin Bank Indonesia Tbk June 17, 2019
BCA March 20, 2019
PT Bank Permata Tbk May 10, 2019
PT Bank DBS Indonesia July 5, 2019
Deutsche Bank AG June 19, 2019
HSBC August 14, 2019
PT Bank Danamon Indonesia Tbk May 31, 2019
PT Bank ICBC Indonesia October 31, 2019
Interest rates charged are based on market rates (e.g. Singapore Interbank Offered Rate (“SIBOR”) or
London Interbank Offered Rate (“LIBOR”) plus certain percentage depending on negotiation at
drawdown.
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16. SHORT-TERM LOANS (continued)
The interest rates on short-term loans for the period ended December 31, 2018 and 2017 are as
follows:
US Dollar 2.76% - 3.71% 1.42% - 2.52%

Rupiah 7.25% - 11.50% 6.40% - 12.50%
The funds received from short-term loans are to be used for working capital purposes.
17. TRADE PAYABLES - THIRD PARTIES
US Dollar 3,215,103 3,719,566

Rupiah 374,194 152,548
Others 8,480 28,007
Total 3,597,777 3,900,121
The Group’s trade payables are mainly related to purchases of crude oil, natural gas and petroleum
products.
18. DUE TO THE GOVERNMENT
The Company
Conversion account (amount due to the Government

for its share in the Indonesian crude oil production
supplied to the Company’s refineries) 961,481 749,956
Ulubelu and Lahendong geothermal project loan 253,310 252,123
Lumut Balai geothermal project loan 84,594 47,590
The Government’s share in the domestic natural gas sales
including its share of Indonesian gas production 36,889 30,674
Payable for purchase of the Government’s share in the
LPG production 11,358 8,826
Ngurah Rai Airport refuelling facility (“DPPU”) construction
project loan 4,505 5,152
Other liabilities - 174,907
Sub-total 1,352,137 1,269,228
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Annual Report 2018

18. DUE TO THE GOVERNMENT (continued)
Subsidiaries:
PT Pertamina EP
Government share of production 25,764 1,897
Finance lease liability - state-owned assets 81,815 88,536
Sub-total 107,579 90,433
PT Pertamina Hulu Energi
Overlifting payables 37,878 59,678
PT Pertamina Hulu Indonesia
Overlifting payables 109,126 -
PT Perusahaan Gas Negara Tbk
Loans for the construction of gas transmission
pipelines from South Sumatra to West Java
and distribution pipelines in West Java 352,971 360,034
Domestic Gas market development project loan 36,008 39,996
Gas transmission and distribution project
phase II project loan 7,126 11,876
Sub-total 650,688 562,017
Total (Note 41) 2,002,825 1,831,245
Current portion (1,207,743) (1,050,619)

Non-current portion 795,082 780,626
a. Conversion account (amount due to the Government for its sharing the Indonesian crude
oil production supplied to the Company and its subsdiaries)
The conversion account represents the Company’s liability to the Government in relation to the
shipment of the Government’s share of Indonesian crude oil production to the Company’s
refineries for processing to meet the domestic demand for fuel products. The Government's share
in the production of Indonesian crude oil is derived from the work area of the KKS Contractor.
The movement in the conversion account is as follows:
The Company
Government share in the
Indonesian crude oil production delivered
to the Company’s refineries during the year 10,289,631 6,819,294
Cash settlement (10,029,737) (6,641,271)
Gains on foreign exchange (48,369) (14,238)
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SECURING ENERGY

b. Ulubelu and Lahendong geothermal project loan
For the implementation of Ulubelu and Lahendong Geothermal Clean Energy Investment Project,
the Company has obtained loans from the International Bank for Reconstruction and Development
(“IBRD”) as part of the World Bank Loan.
On December 5, 2011, LA 8082-ID and TF10417-ID were signed by the Government of Indonesia
and IBRD, with the Company as Executing Agency and PGE as Implementing Agency, amounting
to US$300,000 consisting of LA 8082-ID amounting to US$175,000 and LA TF10417-ID
amounting to US$125,000. Interest rate from World Bank is at LIBOR + 0.45% + 0.5% (bank
charges) + variance spread annually, while interest rate from the Japan International Cooperation
Agency (“JICA”) is at 0.25% + 0.25%.
Repayment of the loan principal will be on a semi-annual basis, on April 10 and October 10, LA-
8082-ID, commencing on October 10, 2020 until October 10, 2035 and LA TF10417-ID,
commencing on October 10, 2021 until April 10, 2051.
The following are outstanding loan balance as of December 31, 2018 and December 31, 2017:
LA 8082-ID 129,044 131,055

LA TF10417-ID 124,266 121,068
Total 253,310 252,123
c. Lumut Balai geothermal project loan
On March 29, 2011, the Loan Agreement (“LA”) IP-557 was signed between the Government of
Indonesia, represented by the Director General of Debt Management, Ministry of Finance, and
Japan International Cooporation Agency (“JICA”), represented by the Chief Representative of
JICA, with the Company as Executing Agency and PGE as Implementing Agency. The amount of
the loan facility was ¥26,966,000,000 (full amount) with period of withdrawal for eight years from
the effective date with effective rates at 0.6% and 0.02%, respectively.
Repayment of the loan principal will be on a semi-annual basis, on March 20, and September 20,
commencing on March 20, 2021 to March 2051. The outstanding loan balance as of December 31,
2018 and 2017 amounted to ¥9,343,033,479 and ¥5,363,082,289 (full amount) or equal to
US$84,594 and US$47,590 respectively.
d. Ngurah Rai Airport refueling facility (“DPPU”) construction project loan
On May 7, 2007, the Government channelled a loan amounting to ¥1,172,872,837 (full amount)
from the Overseas Economic Cooperation Fund Japan to the Company in relation to the
construction of the DPPU Ngurah Rai Airport in accordance with the loan agreement dated
November 29, 1994.
The loan is repayable in 36 semi-annual installments commencing in May 2007 through November
2024, and is subject to interest at the rate of 3.1% per annum. The loan balance as of December
31, 2018 and 2017 amounted to ¥497,492,834 and ¥580,408,306 (full amount), equivalent to
US$4,505 and US$5,152, respectively.
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Annual Report 2018

e. Other liabilities
In 2017, the Company recorded disparity in price of JBKP Premium in 2016, which caused an
excess income amounting to Rp2.37 trillion (equivalent to US$174,907 as of December 31, 2017)
(value before VAT and PBBKB) in accordance with LHP BPK No. 39/AUDITAMA
VII/PDTT/11/2017 dated November 13, 2017.
On June 8, 2018, the Government through MoF issued a letter Number S-100/MK.2/2018
concerning Submission of Settlement of Follow-Up Recommendations of the BPK RI in LHP on
Central Government Financial Reports ("LKPP") and State General Treasurer Financial Reports ("
LKBUN ") in 2015-2017 and LHP for Examinations with Specific Purpose at the Ministry of Finance
in 2015-2016, stated that the excess revenue due to price disparity in 2016 JBKP Premium sales
was recognized as excess revenue for the Company. This resulted in an amount of Rp2.37 trillion
(equivalent to US$178,070) which was previously recorded as due to the Government that
corrected to other operating activities revenue in 2018 (Note 31).
f. Finance lease liability - state-owned assets in PT Pertamina EP

In accordance with the MoF Decree dated May 2, 2007, assets previously owned by the former
Pertamina Entity which have not been recognized in the opening balance sheet of the Company,
represent BMN, the control of which is exercised by the Directorate General of State Assets.
On September 20, 2016, the State Property Lease Agreements between the MoF and
PT Pertamina EP No. PRJ-3-MK.6/2016 and No. 1307/EP0000/2016-S0 have been signed. With
the signing of these agreements, management believes that the property lease payable for
unutilized BMN, will not be charged by the Government since it was not included as part of the
scope of the agreements. Therefore, in 2016, PT Pertamina EP made correction to the BMN lease
payable for BMN which are not used by PT Pertamina EP.
The following table represents the total of finance lease payables for BMN which include
installations, buildings and moveable equipment utilized in the PT Pertamina EP’s oil and gas
operations.
Lessor Type of asset December 31, 2018 December 31, 2017
The Ministry of Finance Installation assets,

buildings and
moveable assets 81,815 88,536
Current portion (1,180) (1,087)
Future minimum lease payments as of December 31, 2018, and 2017 are as follows:
Within one year 14,310 15,295

More than one year but not more than five years 71,550 76,475
More than five years 153,832 179,716
Total 239,692 271,486

Interest (157,877) (182,950)
Net 81,815 88,536

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SECURING ENERGY

g. Overlifting payables
The overlifting payables represent subsidiaries’ payable to SKK Migas as a result of subsidiaries’
actual lifting crude oil and gas being higher than their entitlement for the respective year.
h. Loans for the construction of gas transmission pipelines from South Sumatra to West Java
and distribution pipelines in West Java
On March 27, 2003, Japan Bank for International Cooperation ("JBIC") agreed to provide loans to
the Government with a total amount equivalent to ¥49,088,000,000 (full amount) to assist the
Government in financing the construction of a gas transmission pipeline network from South
Sumatra to Java West and distribution pipelines in West Java.
On May 28, 2003, PGN and the Government entered into a Loan Forwarding Agreement
No..SLA1156 / DP3 / 2003, where the Government continues this loan from JBIC with a total not
exceeding JPY49,088,000,000 (full amount) to PGN.
For the years ended December 31, 2018 and 2017, PGN has paid installments amounting to
¥1,591,118,000 (full amount) and ¥1,591,118,000 (full amount). Payment of loan principal is made
every six months on March 20 and September 15. Payments began from March 20, 2013 to March
20, 2043. The loan balance as of December 31, 2018 was ¥38,983,847,840 (full amount) or
equivalent to US$352,971.
i. Domestic gas market development project loan

Based on the loan agreement dated February 7, 2006, IBRD agreed to provide lending facility to
the Government an aggregate amount equivalent to US$80,000 to assist the Government in
financing the Domestic Gas Market Development Project.
On April 3, 2006, PGN and the Government entered into the related Subsidiary Loan Agreement,
which provides for the Government's relending of the IBRD loan proceeds of US$80,000 to PGN,
which shall undertake the Project.
In December 2011, the total loan facilities were changed to USD69,381,312 (full amount). On
November 14, 2013, PGN received Letter No.5786/PU/2013 from the Directorate General of Debt
Management, Ministry of Finance of the Republic of Indonesia, regarding the approval of the
remaining cancellation of loan facilities amounting to US$7,616 starting February 1, 2013.
For the year ended December 31, 2018 and 2017, PGN has paid installments in each period
amounting to US$3,988 and US$3,820.
j. Gas transmission and distribution project phase II project loan
On September 15, 2000, the Company and the Government entered into a Loan Agreement,
which provides for the Government's relending of the EIB loan proceeds not exceeding
€70,000,000 (full amount) not higher than US$54,633 to PGN as part of the financing of the Gas
Transmission and Distribution Project Phase II.
As of December 31, 2018 and 2017, the Group has complied with all the financial ratios required to
be maintained under the loan agreements.
For the year ended December 31, 2018 and 2017, PGN has paid installments in each period
amounting to US$4,752, respectively.
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Annual Report 2018

19. ACCRUED EXPENSES

Suppliers and contractors 1,069,409 1,040,540

Bonuses, incentives, and salaries 441,536 460,779
Estimated owned retention claim 286,508 190,458
Employee benefit liabilities
due within one year (Note 22b) 232,994 260,010
Interest on loans 105,062 68,109
Total 2,135,509 2,019,896
20. LONG-TERM LIABILITIES
Bank loans:
Government-related entities (Note 41) 179,361 174,638
Third parties 1,891,264 2,100,822
2,070,625 2,275,460
Issuance costs - net (4,775) (6,838)
Total bank loans - net 2,065,850 2,268,622

Finance leases 160,027 207,104
Total long-term liabilities (Note 48d) 2,225,877 2,475,726

Long-term liabilities - net of current portion 1,805,300 2,109,767
Annual interest rates on bank loans during 2018 and 2017 are as follows:
Rupiah 2.35%-13.00% 7.25%-13.00%

US Dollar 1.37%-5.60% 1.37%-3.51%
a. Bank loans
Details of the Group’s syndicated and bank loans as of December 31, 2018 and 2017 are as
follows:
December 31, 2018
Total Current Non-current
Bank Mandiri 19,753 10,043 9,710
BSM 9,330 - 9,330
BRI 181 181 -
BNI Syariah 97 70 27
Other financial institutions:
PT Sarana Multi Infrastruktur
(Persero) 150,000 - 150,000
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20. LONG-TERM LIABILITIES (continued)
a. Bank loans (continued)

Details of the Group’s syndicated and bank loans as of December 31, 2018 and 2017 are as
follows: (continued)
December 31, 2018
Third parties
The Bank of Tokyo-Mitsubishi (“BOTM”)
(syndicated loan) 1,609,539 333,569 1,275,970
Sumitomo Mitsui Banking Corporation
(syndicated loan) 199,318 10,601 188,717
PT Bank Sumitomo Mitsui Indonesia 67,407 9,083 58,324
PT Bank ICBC Indonesia 15,000 - 15,000
Total 2,070,625 363,547 1,707,078
December 31, 2017
Bank Mandiri 17,463 15,981 1,482
BNI 2,715 2,449 266
BRI 1,725 1,532 193
BNI Syariah 359 255 104
Other financial institutions:
PT Multi Sarana Infrastruktur (Persero) 150,000 - 150,000
Lembaga Pembiayaan Ekspor Indonesia 2,376 2,376 -
Third parties
BOTM (Syndicated loan) 1,935,000 277,547 1,657,453
Sumitomo Mitsui Banking Corporation 105,575 10,602 94,973
PT Bank Sumitomo Mitsui Indonesia 60,247 7,273 52,974
Total 2,275,460 318,015 1,957,445
Other information on the Group’s syndicated and bank loans as of December 31, 2018 is as
follows:
Creditors Repayment schedule
The Company
(Long-term loan) Several installments (2016-2025)
Lembaga Keuangan Lainnya
PT Sarana Multi Infrastruktur (Persero)
(Long-term loan) Several installments (2015-2025)
The Bank of Tokyo-Mitsubishi UFJ, Ltd. Several installments (2016-2021)
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a. Bank loans (continued)
Creditors Repayment schedule
Subsidiaries
PT Bank BNI Syariah
PT Pertamina Trans Kontinental Several installments (2016-2019)
PT Bank Sumitomo Mitsui Indonesia
PT Pertamina Trans Kontinental Several installments (2015-2024)
PT Bank Mandiri (Persero) Tbk.
PT Pelita Air Service Several installments (2014-2019)
PT Bank Rakyat Indonesia (Persero) Tbk.
PT Pertamina Patra Niaga Several installments (2016-2019)
BOTM (Syndicated loan)
PT Pertamina Internasional Eksplorasi dan Produksi Several installments (2015-2023)
PT Bank Syariah Mandiri
PT Pertamina International Shipping Several instalments (2018-2024)
(Syndicated Loan)
PT Perusahaan Gas Negara Tbk Several installments (2015-2020)
PT Bank ICBC Indonesia
PT Elnusa Tbk Several installments (2018-2023)
These bank loans are obtained to finance the capital expenditures of the Company’s and/or
Subsidiaries’ projects, general activities and certain costs relating to the agreement.
As specified by the loan agreements, the borrowers are required to comply with certain covenants,
such as financial ratio covenants, no substantial change in the general business of the Company
and/or Subsidiaries and not entering into mergers.
The certain subsidiaries’ long-term bank loans are collateralised by those subsidiaries’ receivables
(Note 8) and fixed assets (Note 13).
On December 12, 2017, Etablissements Maurel et Prom entered into a syndicated loan agreement
with 2 (two) national banks and 7 (seven) overseas banks. The Bank of Tokyo Mitsubishi UFJ,
Ltd., Hong Kong Branch acting as Facility Agent. The syndicated loan facility amount is
US$600.000 which bears interest at LIBOR plus 1.5% margin and shall be repaid on a quarterly
basis starting March 2020 to December 2023.
Prior to effective date of the above syndicated loan agreement, on December 11, 2017, as
required by syndicated loan agreement, PT Pertamina Internasional Eksplorasi dan Produksi
(“PIEP”), as Sponsor, Maurel & Prom West Africa SA, as Borrower, and The Bank of Tokyo
Mitsubishi UFJ, Ltd. Hongkong Branch as Facility Agent, signed the Sponsor Support Agreement.
This Agreement stipulates that if the Borrower fails to fulfill its obligations (Borrower Non-
Payment), the Borrower must immediately submit the Sponsor Loan Request Notice to the
Sponsor, and the Sponsor is obligated to provide funds to the Borrower for all unsettled obligations
including outstanding interest payable. On December 11, 2017, the Company has issued a comfort
letter as required in the syndicated bank facilities as discussed above, but this does not consitute a
guarantee in respect of the obligation of PIEP under Sponsor Support Agreement and the
Company shall not be construed acting as a guarantor.
As of December 31, 2018, the Group complied with the covenants as required by the loan
agreements.
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SECURING ENERGY

b. Finance leases
This account represents the Group's minimum lease payments in the future from financing lease
transactions for LPG Bulk Filling and Transportation Stations ("SPPBE"), landing craft transports,
BBM and LPG tank cars, computer servers, gas pipe installations and LPG plants . This account
represents future Group minimum lease payments from finance lease transactions for LPG Filling
and Transportation ("SPPBE"), landing craft transports, BBM and LPG Tanker Trucks, computer
servers, gas pipe installations and LPG plants.
Minimum lease payments as of December 31, 2018 and 2017 are as follows:
Within one year 84,137 54,407

Within more than one year but not
more than five years 115,474 121,179
Total 232,098 225,079

Interest (72,071) (17,975)
Net 160,027 207,104

21. BONDS PAYABLE
The Company:
Issued in 2011
Due in 2021 1,000,000 1,000,000
Due in 2041 500,000 500,000
Issued in 2012
Due in 2022 1,242,000 1,242,000
Due in 2042 1,221,590 1,230,000
Issued in 2013
Due in 2023 1,615,000 1,615,000
Due in 2043 1,433,261 1,462,500
Issued in 2014
Due in 2044 1,500,000 1,500,000
Issued in 2018
Due in 2048 750,000 -
Total 9,261,851 8,549,500
Discount (65,722) (51,180)

Issuance cost (27,211) (23,552)
Amortization of discount and issuance cost 28,608 23,679
Bonds payable owned by subsidiaries: (62,000) (68,500)
Sub-total 9,135,526 8,429,947
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Annual Report 2018

21. BONDS PAYABLE (continued)
PGN and its subsidiaries:

Senior obligations
PGN 1,350,000 1,350,000
PT Saka Energi Indonesia (“SEI”) 625,000 625,000
Discount & issuance cost (net) (16,430) (19,074)
Sub-total 1,958,570 1,955,926
Total bonds payable (Note 48d) 11,094,096 10,385,873
Other information on the Company’s bonds payable as of December 31, 2018 is as follows:
Nominal
Issued Issuance Starting Maturity Interest
Amount price date date Trustee rate
The Company:
Issued in 2011
Due in 2021 1,000,000 98.097% May 23, 2011 May 23, 2021 HSBC Bank USA, N.A 5.25%
Due in 2041 500,000 98.380% May 27, 2011 May 27, 2041 HSBC Bank USA, N.A 6.50%
Issued in 2012
Issued in 2013
Due in 2023 1,625,000 100.000% May 20, 2013 May 20, 2023 The Bank of New York Mellon 4.30%
Issued in 2014
Issued in 2018
Due in 2038 750,000 98.061% Nov. 7, 2018 Nov. 7, 2048 The Bank of New York Mellon 6.50%
The Subsidiaries:
Issued in 2014
Issued in 2017
Due in 2024 625,000 100.000% April 26, 2017 May 5, 2024 Citicorp International Limited 4.45%
The Company
The Indenture stipulates that:
- No later than 30 days following the occurrence of an event in which the Government of Indonesia
ceases to own, directly or indirectly, more than 50% of the voting securities of the Company
(Change of Control Triggering Event), the Company may be required to make an offer to
repurchase all senior notes outstanding at a purchase price equal to 101% of their principal
amount plus accrued and unpaid interest, if any, to the date of repurchase. The senior notes are
subject to redemption in whole, at 100% of their principal amount, together with any accrued
interest, at the option of the Company at a certain time in the event of certain changes affecting
Indonesian taxation.
- Certain covenants include among others: limitation on liens, limitation on sale and lease back
transactions and provision of financial statements and other reports.
- The Company complied with the restrictions specified within the agreements with the Trustee.
- The proceeds from senior notes issued were used to partially fund the capital expenditure
requirements in the acquisition of new blocks, development of existing blocks, rig purchase and
tanker building.
As of December 31, 2018, the Company was rated as Baa2 with a stable outlook by Moody's Investors
Service, BBB with a stable outlook by Fitch Ratings and BBB- with a stable outlook by Standard &
Poor’s.
During 2018, the Company bought back a portion of senior bonds totaling to US$37,649 (2017: nil).
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SECURING ENERGY

21. BONDS PAYABLE (continued)
The Subsidiaries:
- Senior unsecured fixed notes
In connection with these bonds, the Company is restricted in carrying out consolidation, mergers,
transfers, leases, or deletions of all assets. Based on Moody’s Investors Services, Standard &
Poor’s (S&P) and Fitch, these bonds were given a rating of Baa3, BB+, and BBB- respectively.
- SEI senior unsecured fixed rate notes

SEI does not require the Company to make sinking fund payments related to these bonds. Based
on Moody’s Investors Services, Standard & Poor’s (S&P) and Fitch, the ratings of these bonds in
sequence are Ba1, BB+, and BB+.
22. EMPLOYEE BENEFIT LIABILITIES
a. Post-employment benefit plans and other long-term employee benefits
The Company and certain Subsidiaries have post-employment benefit plans and provide other
long-term employee benefits as follows:
1. Post-employment benefit plans
(i) Defined benefit plan managed by Dana Pensiun Pertamina
The Company and certain Subsidiaries received approval from MoF of the Republic of
Indonesia in Decision Letter No. S-190/MK.6/1977 dated July 15, 1977 to establish a
separate pension fund, Dana Pensiun Pertamina, from which all employees, after serving
a qualifying period, are entitled to defined benefits upon retirement, disability or death, and
also post-employment medical benefits. The Defined Benefit Plans (“PPMP”) cover
employees who were hired before year 2005.
(ii) Post-retirement healthcare benefits
The post-retirement healthcare benefits involve the Company’s retired employees and
their spouses that had minimum 15 years of services with minimum age of 46 years old.
(iii) Severance and service pay (“PAP”)
PAP benefits consist of additional benefits for employees to which they are entitled when
they enter the pension age and in the event of permanent disability, death, or voluntary
resignation.
2. Other long-term employee benefits plan
The Company provides other long-term employee benefits in the form of pre-retirement
benefits (“MPPK”), repatriation costs, annual leave, the Mandiri Guna I Insurance Program and
service anniversaries, except for the insurance program benefit.
3. Employees’ savings plan
The Company and certain Subsidiaries (collectively referred to as the Participants) operate an
Employees’ Savings Plan (“TP”) in the form of a defined contribution plan, in which the savings
will be received by employees at the end of their service period. Until the fiscal year 2015, all
contributions made are managed by PT Pertamina Pedeve Indonesia. Effective October 28,
2016, PT Pertamina Pedeve Indonesia made a decision to restructure and it is no longer in
business activities as a venture capital company so that all of available funds are transferred
by management to Pension Fund (“DPLK”).
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22. EMPLOYEE BENEFIT LIABILITIES (continued)
b. Provision for employee benefits
The estimated employee benefits obligations of the Company and most of its Subsidiaries as of
December 31,.2018 and 2017, were determined based on the valuation reports of an independent
actuary, PT Dayamandiri Dharmakonsilindo, dated January 9, 2019 and January 25, 2018
respectively. The table below presents a summary of the employee benefits obligations reported in
the consolidated statements of financial position:
The Company:
Pension and other post-employment benefits:
- PPMP 142,585 200,990
- Post-retirement healthcare benefits 786,489 924,654
- PAP 718,902 900,396
- Repatriation costs 5,423 8,480
Sub-total 1,653,399 2,034,520
Other long-term employee benefits:

- MPPK 104,428 129,278
- Annual leave and service anniversary 10,035 16,063
Sub-total 114,463 145,341
Total - The Company 1,767,862 2,179,861
Subsidiaries:
Pension and other post-employment benefits 315,515 288,369
Total 2,083,377 2,468,230
Current portion (Note 19) (232,994) (260,010)
Non-current portion 1,850,383 2,208,220
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SECURING ENERGY

c. Changes in present value of post-employment benefit obligations and fair value of plan
assets
The following tables summarize the components of net benefit expense recognised in the
statement of profit or loss and other comprehensive income and the funded status and amounts
recognised in the statement of financial position for the respective plans for the years ended
December 31, 2018 and 2017:
i. Post-employment benefit obligations

December 31, 2018
PPMP
Present value
of post- Post- Post-
employment Fair value employment retirement
benefit of benefit healthcare Repatriation
obligations plan assets obligations benefits PAP cost Total
Beginning balance 790,740 (589,750) 200,990 924,654 900,396 8,480 2,034,520

Current service cost
(Contribution from
employee) 3,935 (1,057) 2,878 27,061 48,428 405 78,772
Interest expense
(Interest income) 55,823 (42,502) 13,321 67,111 50,139 542 131,113
Sub-total amounts
recognized
in profit or loss 59,758 (43,559) 16,199 94,172 98,567 947 209,885
Actuarial (gain) loss

arising from:
Changes in financial
assumptions (67,025) 36,386 (30,639 ) (256,537 ) (85,986 ) (676 ) (373,838 )
Experience
adjustments 2,452 - 2,452 117,720 31,520 (1,715 ) 149,977
Sub-total
Expense (income)
recognized in other
comprehensive
income (64,573) 36,386 (28,187 ) (138,817 ) (54,466 ) (2,391 ) (223,861 )
Benefits paid
from plan asset (61,562) 61,562 - - - - -
Benefits paid by
the Company - - - (35,241 ) (169,620 ) (1,107 ) (205,968 )
Contribution to plan
by the Company - (34,218) (34,218 ) - - - (34,218 )
Gain (loss) on foreign
currency exchange (49,870) 37,671 (12,199 ) (58,279 ) (55,975 ) (506 ) (126,959 )
Ending balance 674,493 (531,908) 142,585 786,489 718,902 5,423 1,653,399
December 31, 2017
PPMP
Present value
Beginning balance 735,775 (593,449) 142,326 832,487 922,194 8,230 1,905,237

Current service cost
(Contribution from
employee) 3,569 (1,266) 2,303 16,809 45,431 534 65,077
Interest expense
(Interest income) 60,762 (50,168) 10,594 72,036 67,105 654 150,389
Sub-total amounts
recognized
in profit or loss 64,331 (51,434) 12,897 88,845 112,536 1,188 215,466
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Annual Report 2018

c. Changes in present value of post-employment benefit obligations and fair value of plan
assets (continued)
i. Post-employment benefit obligations (continued)

December 31, 2017
PPMP
Present value
Actuarial (gain) loss

arising from:
Changes in financial
assumptions 80,080 22,798 102,878 166,048 76,914 836 346,676
Experience
adjustments (18,440) - (18,440 ) (120,215 ) (35,473 ) (1,111 ) (175,239 )
Sub-total
Expense (income)
recognized in other
comprehensive
income 61,640 22,798 84,438 45,833 41,441 (275 ) 171,437
Benefits paid
from plan asset (64,177) 64,177 - - - - -
Benefits paid by
The Company - - - (34,417 ) (168,325 ) (590 ) (203,332 )
Contribution to plan
by the Company - (36,763) (36,763 ) - - - (36,763 )
Gain (loss) on foreign
currency exchange (6,829) 4,921 (1,908 ) (8,094 ) (7,450 ) (73 ) (17,525 )
Ending balance 790,740 (589,750) 200,990 924,654 900,396 8,480 2,034,520
Unfunded Defined Benefit Pension Plan (“PPMP”) will be settled/paid by the Company in
accordance with applicable regulations.
The actual return on plan assets as of December 31, 2018 and 2017 amounted to US$6,116
and US$27,369 respectively.
ii. Other long-term employee benefits obligations

Annual leave Annual leave

and service and service
MPPK anniversary Total MPPK anniversary Total
Beginning balance 129,278 16,063 145,341 114,778 12,843 127,621

Current service cost 6,743 3,866 10,609 6,573 7,039 13,612
Interest cost 7,995 802 8,797 8,828 817 9,645
Actuarial gain (loss) (18,078 ) (3,605) (21,683) 4,604 864 5,468
Sub-total benefit
cost recognized
in the profit or loss (3,340 ) 1,063 (2,277) 20,005 8,720 28,725
Benefits paid
by the Company (13,453 ) (6,138) (19,591) (4,367) (5,353) (9,720 )
Gain on foreign
exchange (8,057 ) (953) (9,010) (1,138) (147) (1,285 )
Ending balance 104,428 10,035 114,463 129,278 16,063 145,341
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SECURING ENERGY

d. Actuarial assumptions
Significant actuarial assumptions applied in the calculation of post-employment benefit obligations

and other long-term employment benefits for the Company are as follows:
Discount rate:
- Defined benefits plan administered
by Dana Pensiun Pertamina
per annum 8.41% per annum 7.76% per annum
- PAP 8.12% per annum 6.44% per annum
- Post-retirement healthcare benefits 8.77% per annum 7.76% per annum
- Repatriation cost 8.29% per annum 7.26% per annum
- MPPK 8.27% per annum 7.07% per annum
- Annual leave 7.39% per annum 6.35% per annum
- Service anniversary 8.30% per annum 7.07% per annum
Gold inflation rate 8.00% per annum 9.00% per annum
Salary increases 9.50% per annum 9.50% per annum
Annual medical expense trend 8.00% per annum afterwards 8.00% per annum afterwards
Demographic factors:
- Mortality Tabel Mortalita Indonesia 3-2011 Tabel Mortalita Indonesia 3-2011
(“TMI 3” 2011) (“TMI 3” 2011)
- Disability 0.75% TMI 3 0.75% TMI 3
- Resignation
until 20 years of age (per anum) 1% 1%
26 - 45 years of age (per anum) reducing linearly to 0% reducing linearly to 0%
until the age of 56 until the age of 56
- Pension: 100% at normal retirement age 100% at normal retirement age
- Normal retirement age 56 years 56 years
- Operational costs of the
pension plan 8% of service cost and 8% of service cost and
2.11% of benefits payments 2.11% of benefits payments
Investment portfolio of plan assets comprises the following:

Investment value % Investment value %
Equity instruments 154,253 29% 171,028 29%

Debt instruments 218,082 41% 247,694 42%
Others 159,573 30% 171,028 29%
Total 531,908 100% 589,750 100%
The expected return on plan assets is determined by considering the expected returns from the
assets based on current investment policy. Expected yields on fixed interest investments are
based on gross redemption yields as of the reporting date. Expected returns on equity and
investment properties reflect long-term real rates of return experienced in the respective markets.
Expected contributions to post-employment benefit plans for the period ended December 31, 2018
and 2017 amounted to US$31,166 and US$35,703, respectively.
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Annual Report 2018

d. Actuarial assumptions (continued)
The qualitative sensitivity analysis for significant assumptions as of December 31, 2018 is as
follows:
Effect of 1% increase Effect of 1% decrease

to defined benefit to defined benefit
obligation obligation
Discount rate (199,710) 227,399

Salary rate 46,164 (68,845)
Healthcare cost trend rate 115,726 (93,508)
The average duration years of the Company’s defined benefits plan obligation at the end of the
reporting period are as follows:
PPMP 14.35 15.38

PAP 5.98 6.71
Post-retirement healthcare benefits 17.84 25.57
The maturity profile of post-employment benefits obligation as of December 31, 2018 and 2017 are
as follows:
Within 1 year 266,405 291,079

2 - 5 years 791,955 903,342
More than 5 years 22,500,076 23,312,066
Total 23,558,436 24,506,487
Management believes that the estimated liabilities for employee benefits from all of the Group’s
pension programs, based on the estimated calculation provided by the actuaries, exceed the
minimum liability that is required by Labour Law No. 13/2003.
23. PROVISION FOR DECOMMISIONING AND SITE RESTORATION
The movements in the provision for decommissioning and site restoration are as follows:
Beginning balance 2,129,337 1,900,093

Addition (deduction) - net (186,637) 177,746
Accretion expense (Note 38 and 46a) 87,035 51,498
Ending balance 2,029,735 2,129,337
The deduction mainly represents the changes in estimate in decommissioning and site restoration
which applied by the Group.
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SECURING ENERGY

24. NON-CONTROLLING INTERESTS
PT Perusahaan Gas Negara 1,397,957 1,382,334

PT Pertamina Internasional Eksplorasi dan Produksi 333,294 263,376
PT Asuransi Tugu Pratama Indonesia Tbk.
(previously PT Tugu Pratama Indonesia) 143,831 108,797
PT Elnusa Tbk. 134,790 132,956
Pertamina International Timor S.A. 1,447 1,086
Total 2,011,319 1,888,549
25. SHARE CAPITAL, ADVANCE FOR SHARE ISSUANCE AND ADDITIONAL PAID-IN CAPITAL
a. Share capital and advance for share issuance
In accordance with Notarial Deed No. 20 dated September 17, 2003 of Lenny Janis Ishak, S.H.,
and the decision of MoF through Decision Letter No. 408/KMK.02/2003 (KMK 408) dated
September 16, 2003, the Company’s authorized capital amounted to Rp200 trillion, which consists
of 200,000,000 ordinary shares with a par value of Rp1,000,000 (full amount) per share of which
Rp100 trillion (full amount) has been issued and paid by the Government of the Republic of
Indonesia through the transfer of identified net assets from the former Pertamina Entity, including
its Subsidiaries and its Joint Ventures.
Based on MoF’s Decision Letter No. 23/KMK.06/2008 dated January 30, 2008, regarding the
Determination of the Opening Balance Sheet of PT Pertamina (Persero) as of September 17,
2003, the total amount of the Government’s equity ownership in the Company is Rp82,57 trillion
(full amount). This amount consists of all of the former Pertamina Entity’s net assets and net
liabilities excluding LNG plants operated by PT Badak Natural Gas Liquefaction and PT Arun
Natural Gas Liquefaction, former upstream assets currently operated by PT Pertamina EP, and
certain parcels of land and building assets.
The changes in the Company’s issued and paid-up share capital from Rp100 trillion to Rp82,57
trillion (equivalent to US$9,809,882) (full amount) were approved at a GMS held on June 15, 2009
and was documented in Notarial Deed No. 11 of Lenny Janis Ishak, S.H. The amendment was
documented in Notarial Deed No. 4 dated July 14, 2009 of Lenny Janis Ishak, S.H. and approved
by the Minister of Law and Human Rights of the Republic of Indonesia in Decision Letter No. AHU-
45429.AH.01.02.Tahun 2009 dated September 14, 2009. The reduction in the Company’s issued
and paid-up share capital is effective retrospectively as of September 17, 2003.
As of August 1, 2012, there were additional share capital contributions documented in Notarial
Deed No. 1 of Lenny Janis Ishak, S.H. in the amount of Rp520,92 billion (equivalent to
US$55,019) and based on PP No. 13 Year 2012 regarding the Addition to the Government’s
Capital Contribution to Share Capital of State Enterprise (Persero) PT Pertamina.
Based on the GMS dated December 14, 2015, the MoSOE approved the capitalization of retained
earnings into share capital amounting to Rp50 trillion with 50,000,000 shares (full amount)
(equivalent to US$3,552,146).
Subsequently, advances for share issuance was capitalized as an addition to issued and paid-up
share capital through Notarial Deed No. 10 dated January 11, 2016 of Lenny Janis Ishak, S.H.
The additional issued and paid-up share capital was reported to the Minister of Law and Human
Rights through Receipt of Notification regarding the Amendment of Articles of Association No.
AHU-AH.01.3-0003113 dated January 15, 2016.
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Annual Report 2018

25. SHARE CAPITAL, ADVANCE FOR SHARE ISSUANCE AND ADDITIONAL PAID-IN CAPITAL
(continued)
a. Share capital and advance for share issuance (continued)
The Increase in authorized capital from Rp200 trillion to Rp600 trillion (full amount) has been
approved by MoSOE as the GMS of the Company through Approval letter No.S-217/MBU/04/2018
dated April 11,2018 and was documented in Notarial Deed No. 29 dated April 13, 2018 of Aulia
Taufani, S.H., and also approved by the Minister of Law and Human Rights of the Republic of
Indonesia in Decision Letter No. AHU-0052766.01.11. Year 2018 dated April 13, 2018 (Note 4a).
As of December 31, 2018 and 2017, the Company’s issued and paid-up share capital are as
follows:
Number of isssued and
paid-up shares Percentage of Issued and paid up
Shareholder (full amount) ownership share capital
December 31, 2018
The Government of the
Republic of Indonesia 171,227,044 100% 16,191,204
December 31, 2017

The Government of the
Republic of Indonesia 133,090,697 100% 13,417,047
b. Additional paid-in capital

The additional paid-in capital as of December 31, 2018 and 2017 is the effect of applying SFAS
38, Business Combination of Entities Under Common Control (Revised 2012), to recognize the
difference between the consideration received/transferred and the amount recorded.
26. GOVERNMENT CONTRIBUTED ASSETS PENDING FINAL CLARIFICATION OF STATUS

(“BPYBDS”)
a. Refuelling apron installation at Sultan Hasanuddin-Makassar Airport and fuel hydrant

facilities at Juanda-Surabaya Airport
Based on Memorandum of Operational Acceptances (“MOACs”) No. 05/BA/MKS-HND/XII/2011,

No. AU/14525/KEU.1227/XII/2011, No. BA084/F100000/2011-S3 and MOACs
No..005/F00000/2012-S0, No. BA.125 Year 2012, No. 0573/B3/KOBU/IV/2012 from the Ministry of
Transportation, the Company obtained management and operation rights of Refuelling Apron
Installation at Sultan Hasanuddin Airport-Makassar and Fuel Hydrant Facilities at Juanda Airport-
Surabaya, resulting in the balance of this account of Rp12,453 million (equivalent to US$1,361)
(Note 15) on December 31, 2017.
b. Natural gas distribution network ("jargas") for households and gas refueling stations
("SPBG") and supporting infrastructure
As of December 31, 2018, the Company and Secretary General of the Directorate of Oil and Gas
of the Ministry of Energy and Mineral Resources as the proxy of budget/goods users have signed
the Minutes of Handover of Operations. Use ("BASTO") of State Property ("BMN") in the form of
Distribution Network ("Jargas") Natural Gas for Households Number BA-05/C00000/2018-S0 and
Gas Filling Stations ("SPBG") and Infrastructure Supporting Number BA-06/C00000/2018-S0. The
value of BMN assets in the form of land and non-land assets with categories of operating and non-
operating assets is Rp5.8 trillion (equivalent to US$399,759) (Note 15), currently these assets are
managed by PT Pertagas Niaga and PGN.
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SECURING ENERGY

26. GOVERNMENT CONTRIBUTED ASSETS PENDING FINAL CLARIFICATION OF STATUS

(“BPYBDS”) (continued)
a. Natural gas distribution network ("jargas") for households and gas refueling stations
("SPBG") and supporting infrastructure (continued)
Based on the results of the discussion of the Ministry of Finance, the Ministry of Energy and
Mineral Resources, the Financial and Development Supervisory Agency ("BPKP"), and the
Company agreed that BASTO was recorded and treated as BPYBDS and recorded in other asset
accounts. Based on the results of the review of BPKP assets of Jargas and SPBG with free and
clear status, it will be recommended to carry out the State Capital Participation ("PMN") process,
while those that do not have free and clear status will be returned to the ESDM Directorate
General of Oil and Gas.
27. RETAINED EARNINGS AND DIVIDEND
On March 16, 2017, the Company held a GMS for the fiscal year 2016. Based on the minutes of
meeting, the shareholder approved, among others, the utilization of 2016 net income of the Company
as follows:
- Distribution of dividends of Rp12,10 trillion (full amount) (equivalent to US$907,383)
- The remaining amount of US$2,239,660 were reserved to support operations and corporate
development.
Based on the GMS’ decision to approve the 2017 annual report of PT Pertamina (Persero), there was
an additional appropriation of retained earnings for partnership program and community development
program amounting to Rp250 billion (equivalent to US$18,707).
On May 2, 2018, the Company held a GMS for the fiscal year 2017. Based on the minutes of meeting,
the shareholders approved, among others, the utilization of 2017 net income of the Company to be as
follows:
- Distribution of dividends amounting to Rp8.57 trillion (full amount) (equivalent to US$614,939)
- The remaining amount of US$1,925,256 is reserved to support operations and corporate
development.
28. DOMESTIC SALES OF CRUDE OIL, NATURAL GAS, GEOTHERMAL ENERGY AND OIL
PRODUCTS
For the years ended December 31,

2018 2017
Pertamax, Pertamax Plus Pertalite gasoline
and Pertadex (diesel oil) 11,215,914 9,794,161
Automotive diesel oil (“ADO”) 10,713,543 9,388,019
LPG, petrochemicals, lubricants and others 8,201,023 4,313,150
Premium gasoline 4,509,233 5,429,272
Avtur dan Avigas 3,955,434 2,990,276
Natural gas 3,196,038 5,461,178
Crude oil 917,333 763,281
Geothermal energy-steam and electricity 645,593 609,610
Industrial/Marine Fuel Oil 639,575 492,753
DMO fees-crude oil 612,953 400,621
Kerosene 123,894 137,924
Industrial diesel oil 11,978 8,539
Total 44,742,511 39,788,784
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Annual Report 2018

29. SUBSIDY REIMBURSEMENTS FROM THE GOVERNMENT

2018 2017
Current year:
Subsidy reimbursements for 3 kg LPG cylinders
(Note 9b) 3,496,603 2,977,967
Subsidy reimbursements for certain fuel (BBM)
products (Note 9c) 2,126,796 595,206
Subsidy reimbursements for kerosene (Note 9) 16,828 -
Sub-total 5,640,227 3,573,173
Corrections from Government audit

(BPK and MoEMR) for subsidy reimbursements:
LPG year 2018 (Note 9b) (1,252) -
BBM year 2018 (Note 9c) (699) -
LPG year 2017 (Note 9b) (5,661) -
BBM year 2017 (Note 9c) (147) -
LPG year 2016 (Note 9b) - (484)
BBM year 2016 (Note 9c) - (605)
Sub-total (7,759) (1,089)
Total 5,632,468 3,572,084
Any disparity in subsidy reimbursement between the amount recorded in the books and the results of
Government’s audit is adjusted in the period when the audit report is received.
30. EXPORT OF CRUDE OIL, NATURAL GAS AND OIL PRODUCTS
2018 2017
Oil products 1,811,257 968,882

Crude oil 1,187,824 659,722
Natural gas 637,872 245,677
Total 3,636,953 1,874,281
31. REVENUES FROM OTHER OPERATING ACTIVITIES
2018 2017
Disparity between formula price and

Government stipulated price (Note 9a and 18e) 3,102,218 -
Natural gas transportation services 204,140 151,916
Upstream support services 156,869 155,442
Shipping services 127,010 124,224
Insurance services 84,585 98,870
Health and hospital services 76,607 85,383
Gas regasification services 31,108 19,224
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31. REVENUES FROM OTHER OPERATING ACTIVITIES (continued)

2018 2017
Office and hospitality services 26,155 23,656

Air transport services 18,756 39,137
Transportation and technical services 13,359 8,994
Portfolio management services 4,962 9,157
Human resources provision and development services 4,825 2,026
Others services 55,613 22,071
Total 3,906,207 740,100
32. COST OF GOODS SOLD

2018 2017
Beginning balance of oil products (3,778,519) (2,990,517)

Provision for decline in value of oil products (Note 10) 92,854 76,542
Sub-total (3,685,665) (2,913,975)
Production costs:
- Direct materials (20,349,186) (15,368,304)
- Supporting materials (1,151,033) (879,291)
- Depreciation (Note 13) (566,412) (551,911)
- Utilities, infrastructure and fuel (484,322) (441,655)
- Salaries, wages, and other employee benefits (452,184) (503,547)
- Rental (Note 49c) (286,481) (717,475)
- Freight and transportation (152,255) (112,534)
- Custom and duty (124,215) (138,148)
- Professional services (124,109) (82,225)
- Maintenance and repairs (115,899) (114,228)
- Overhead (84,460) (71,035)
- Materials and equipment (17,109) (98,863)
- Business Travel (99,311) (15,569)
Sub-total (24,006,976) (19,094,785)
Purchases of oil products and others:

- Imports of other oil products (Note 10) (9,230,605) (7,515,863)
- Imports of premium gasoline (4,433,062) (3,811,785)
- Domestic purchases of other oil products (2,782,989) (2,340,875)
- Imports of ADO (1,385,810) (853,533)
- Purchases of geothermal energy (1,313,799) (330,505)
Sub-total (19,146,265) (14,852,561)
Ending balance of oil products (Note 10) 4,218,260 3,778,519

Provision for decline in value of oil products (Note 10) (167,270) (92,854)
Sub-total 4,050,990 3,685,665
Total (42,787,916) (33,175,656)
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Annual Report 2018

33. UPSTREAM PRODUCTION AND LIFTING COSTS
2018 2017
Depreciation, depletion and amortization (Note 14) (1,741,040) (1,578,988)

Contracts (734,342) (373,194)
Salaries, wages and other employee benefits (618,458) (419,526)
Technical Assistance Contracts (“TAC”) (335,532) (136,609)
Materials (267,437) (287,612)
Amortization of investment in oil & gas block (Note 12a) (144,472) (116,441)
Others (545,235) (508,837)
Total (4,386,516) (3,421,207)
34. EXPLORATION COSTS
2018 2017
Dry hole (112,476) (74,744)

Seismic, geological and geophysical (89,680) (40,000)
Others (65,524) (50,612)
Total (267,680) (165,356)
35. EXPENSES FROM OTHER OPERATING ACTIVITIES

2018 2017
Cost of services (917,123) (561,688)
Insurance claims (92,864) (68,616)
Depreciation (Note 13) (88,405) (84,636)
Total (1,271,977) (862,962)
36. SELLING AND MARKETING EXPENSES

2018 2017
Freight and transportation (453,664) (519,929)

Depreciation (Note 13) (328,695) (362,241)
Salaries, wage, and other employee benefits (263,020) (222,447)
LPG filling fees (113,971) (132,647)
Professional services (96,851) (53,660)
Taxes, retributions and penalties (89,179) (46,201)
Maintenance and repairs (84,776) (66,757)
Materials and equipment (33,441) (45,992)
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SECURING ENERGY

36. SELLING AND MARKETING EXPENSES (continued)

2018 2017
Rental (26,210) (44,981)

Advertising and promotions (24,151) (25,102)
Utilities, infrastructure and fuel (21,092) (8,339)
Travel (15,331) (12,483)
Others (92,450) (49,423)
Total (1,642,831) (1,590,202)
37. GENERAL AND ADMINISTRATIVE EXPENSES

2018 2017

Taxes, retributions and penalties (295,439) (222,737)
Depreciation, depletion and amortization
(Notes 12, 13 and 14) (107,538) (109,792)
Professional services (41,828) (113,979)
Materials and equipment (36,022) (52,663)
Rental (Note 49c) (31,177) (19,906)
Training, education and recruitment (29,828) (22,570)
Maintenance and repairs (24,825) (38,009)
Business travel (23,252) (26,136)
Others (90,333) (167,728)
Total (1,329,911) (1,598,934)
38. FINANCE INCOME AND COSTS

2018 2017
Finance income:
Time deposits 161,818 162,988
Other investments 54,797 25,277
Current accounts 39,958 38,779
Other - 6,030
Total 256,573 233,074
Finance costs:
Bonds (351,914) (352,622)
Long-term loans (172,586) (202,974)
Accretion expense (Note 23) (87,035) (51,498)
Short-term loans (56,499) (8,465)
Finance leases (30,309) (58,323)
Others (136,895) (143,829)
Total (835,238) (817,711)
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Annual Report 2018

39. OTHER INCOME/(EXPENSES)
2018 2017
Recovery/(provision) of impairment for receivable 108,757 (49,826)

Income from contract and material penalties and claims 91,101 41,058
Adjustment of fair value of other investments
(Note 11) 52,843 -
Rental 35,325 34,167
Reversal/(impairment) of fixed assets (Note 13) 2,719 (7,364)
Provision for impairment of oil and gas assets (Note 14) (218,189) (191,353)
Decrease in value of investments
in oil and gas blocks (Note 12a) (154,773) (83,270)
Tax penalties underpayment tax assessment letter
(“SKPKB”) and tax billed (“STP”) (Note 40a) (36,622) -
Interest tax income restitution - 99,577
Provision for impairment of goodwill (Note 15d) - (6,890)
Provision for tax dispute (Note 40g) - (621,148)
Tax refund - 121,676
Final income tax asset revaluation (Note 40h) - (129,610)
Write-off of oil and gas properties - (68,546)
Others - net 38,014 30,947
Total (80,825) (830,582)
40. TAXATION
a. Prepaid taxes
Corporate Income Tax (“CIT”)
The Company:
Overpayment of corporate income tax:
- 2017 14,520 164,266
Subsidiaries:
Corporate income tax and dividend 458,483 330,676
Sub-total CIT - Consolidated 473,003 494,942
Value added tax (“VAT”)

The Company:
- 2018 386,989 -
- 2017 - 418,255
- 2016 84,290 -
Sub-total 471,279 418,255
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SECURING ENERGY

40. TAXATION (continued)
a. Prepaid taxes (continued)

Value added tax (“VAT”) (continued)
Subsidiaries:
Reimbursable VAT 290,872 313,468
VAT 386,737 396,890
Sub-total 677,609 710,358
Sub-total VAT - Consolidated 1,148,888 1,128,613
Other taxes 18,994 -
Total 1,640,885 1,623,555
Details of Reimbursable VAT are as follows:

Reimbursable VAT by SKK Migas:
- PT Pertamina EP 84,264 73,348
- PGN and its subsidiaries 69,014 75,356
- PT Pertamina EP Cepu 31,194 43,160
- PHE and its subsidiaries 3,643 26,638
Sub-total 188,115 218,502
Reimbursable VAT by the Directorate General of Budgeting

and Finance Stability:
PT Pertamina Geothermal Energy 102,757 94,966
Total 290,872 313,468
On December 27, 2018, the Company received underpayment tax assessment letter (“SKPKB”)
and tax bill (“STP”) for the 2016 fiscal year tax audit amounting to Rp3.23 trillion (equivalent to
US$222,250). The SKPKB consists of SKPKB of Corporate Income Tax amounting to Rp565.95
billion (equivalent to US$39,031), SKPKB of withholding income tax amounting to Rp1.38 trillion
(equivalent to US$94,851) and SKPKB of VAT amounting to Rp295 billion (equivalent to
US$20,260). STP consists of a tax bill on VAT amounting to Rp991.86 billion (equivalent to
US$68,108).
From the overall value of the SKPKB and STP, the Company charged Rp533.32 billion (equivalent
to US$36,622) in the 2018 income statement (Note 39), Rp1.5 trillion (equivalent to US$103,283)
was recorded as prepaid tax, and Rp565.95 billion (equivalent to US$39,030) was recorded as
prior year adjustment of corporate income tax, while the remaining value of amounting to
Rp630.78 billion (equivalent to US$43,315) has not been paid.
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Annual Report 2018


a. Prepaid taxes (continued)
On January 25, 2019, the Company has filed objection letters to the SKPKB PPh 22, PPh 23, PPh
4 (2), PPh 15, SKPKB and STP PPN.
On November 7, 2018, the Company received a letter of return for overpayment of tax for
overpayment of 2017 corporate income tax from the Directorate General of Taxes (“DGT”) for
Large Taxpayers Three No.80367/051-00367-2018 for tax refund amounting to Rp2.26 trillion by
compensating taxes payable amounting to Rp159 million, so that it was refunded amounting to
Rp2.26 trillion (equivalent to US$154,758).
On February 9, 2018, the Company obtained from the DGT decision No. Kep-29/WPJ.19/2018
concerning the Determination of Certain Taxpayers with Specific Criteria, which was put into effect
from January 1, 2018 to December 31, 2019. Taxpayers that fulfill all criteria can be given an initial
tax refund if they had previously overpaid taxes.
On March 21, 2017, the Tax Court accepted the Company’s tax appeals for the partial portion of
underpayment tax assessment letter (“SKPKB”) of value added tax for fiscal period December
2007. The Company received tax refund for the overpayment of value added tax amounting to
Rp1,62 trillion (equivalent to US$121,576) on August 3, 2017.
The increase in VAT payments in 2017 was mainly due to advance payment of VAT for LPG and
Diesel subsidies, and withholding tax.
On March 3, 2017, the Company received tax refund overpayment letters for overpayment of
corporate income tax for fiscal years 2014 and 2013 amounting to Rp3.88 trillion (equivalent to
US$296,363) and Rp23.25 billion (equivalent to US$1,754) respectively.
On December 31, 2015, through letter No.860/H00000/2015-S4, the Company submitted a
request for revaluation of fixed assets for tax purposes submitted in 2015 to the Regional Office of
the Directorate General of Taxes of Large Taxpayers and has paid the Final Income Tax
amounting to Rp1.3 trillion (equivalent to US$95,182).
On December 7, 2016, through letter No. 751/H00000/2016-S4, the Company notified the DGT
that the submission of the tax requirements for revaluation will be deferred to 2017. As a
consequence, the Company made additional final income tax payment in December 2016 on the
revaluation amounting to Rp429.77 million (equivalent to US$31,899).
b. Taxes payable
Corporate income tax - Company 19,684 -

Corporate income tax - Subsidiaries 447,921 308,803
Sub-total 467,605 308,803
Other taxes:
- Income taxes - Article 21 33,909 39,763
- Income taxes - Article 23/26 13,189 11,363
- Income taxes - Article 22 10,580 6,341
- Income taxes - Article 15/4(2) 6,271 7,101
- Income taxes - Article 24 269 1
- VAT 74,542 68,617
- Fuel taxes 119,645 117,347
Sub-total 258,405 250,533
Total 726,010 559,336
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SECURING ENERGY

c. Income tax expense, net

2018 2017
Current tax expense (Note 40d) (2,627,443) (1,699,088)

Deferred income tax benefit/(expense) (385,759) 532,264
Net (3,013,202) (1,166,824)
d. Current taxes
Current income tax computation is based on estimated taxable income (loss). The amounts may
be adjusted when annual tax returns are filed with the DGT.
The reconciliation between the consolidated profit before income tax and estimated taxable
income is as follows:
2018 2017
Consolidated profit before income tax expense 5,729,596 3,867,228

Add:
Consolidation eliminations 3,610,474 2,247,936
Profit before income tax - subsidiaries (6,610,027) (3,821,301)
Profit before income tax - the Company 2,730,043 2,293,863
Temporary differences:
Provision for incentives and performance bonuses (tantiem) (6,894) 19,920
Provision for impairment of financial assets (139,273) 20,305
Finance lease assets and liabilities (7,368) 48,659
Discount and unamortized debt issuance cost (55) 8,095
Accrual for legal costs 14,918 8,087
Provision for impairment of inventories 137,248 32,404
Fixed assets depreciation (112,976) (2,756)
Receivable fair value adjustment from Disparity of
Selling Price (Note 2u and 9a) 981,331 -
Employee benefits liability (181,421) (121,652)
Fixed asset revaluation (14,221) -
Others 7,624 (346)
Permanent differences:
Non-deductible expenses 342,456 1,093,884
Post-retirement healthcare benefits 648 46,334
Non-depreciable fixed assets 5,372 5,201
Income from subsidiaries and associates (3,341,620) (1,997,866)
Interest income subjected to final tax (149,244) (148,704)
Other income subjected to final tax 1,055,818 (147,399)
Total temporary and permanent differences (1,407,657) (1,135,834)
Taxable income - the Company 1,322,386 1,158,029
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Annual Report 2018

d. Current taxes (continued)
2018 2017
Current income tax - the Company 330,597 289,507

Prior year adjustments 42,403 -
Current income tax - the Subsidiaries 2,254,443 1,409,581
Consolidated current income tax (Note 40c) 2,627,443 1,699,088
The reconciliation between the Group`s income tax expense and the theoretical tax amount on the
Group`s consolidated profit before income tax is as follows:
Profit before income tax - Consolidated 5,729,596 3,867,228

Tax calculated at weighted average statutory tax rates 2,301,890 1,828,634
Non-deductible expenses 375,007 492,336
Post-retirement healthcare benefits 162 11,583
Non-depreciable fixed assets 1,368 (8,856)
Share in net income of associates (868,954) (553,989)
Income subjected to final tax 1,198,784 (35,280)
Interest income subjected to final tax (37,458) (34,943)
Prior year adjustments 42,403 -
Fixed assets revaluation - (532,661)
Consolidated corporate income tax expense 3,013,202 1,166,824
The theoretical amount of income tax expense is calculated using the weighted average tax rate
applicable to entities consolidated to the Group. The weighted average tax rate was 53%
(2017:.30%).
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e. Deferred tax
December 31, 2018
Additions
January 1, from business Charged to Translation Charged to Charged to December 31,
2018 combinations equity adjustment OCI profit or loss 2018
Deferred tax assets

Employee benefits 314,471 - 516 5,143 (1,302) (71,306) 247,522
Provision for impairment of
financial assets 121,406 - - (367) - (41,562) 79,477
and site restoration 136,394 - 591 - - (14,749) 122,236
Provision for incentives and
performance bonuses (tantiem) 83,513 - - (43) - (21,374) 62,096
Unrealized profits from transaction
at consolidation level 64,825 - - - - 10,869 75,694
Fixed assets 518,336 - - (3,486) 133 71,595 586,578
Provision for impairment
of inventories 37,156 - - (46) - 33,257 70,367
non-free and non-clear assets 27,588 - - 1 - - 27,589
Tax losses carry-forward 13,764 - 1,567 (27) - (13,233) 2,071
Deferred revenues 7,590 - - - - (7,314) 276
Accrual for legal cost 3,640 - - - - 3,729 7,369
Oil and gas properties (5,002 ) - (3,382 ) - - (64,379) (72,763)
Finance lease assets and
liabilities (11.205 ) - - 2 - (1,793) (12.996)
Discount and unamortized
debt issuance cost (5.937 ) - - - - (14) (5,951)
Receivable fair value adjustment
From Disparity of Selling Price
(Notes 2u and 9a) - - - - - 245,333 245,333
Others 64,541 - (2,439 ) (298) - (54,836) 6,968
Sub-total consolidated
deferred tax assets - net 1,371,080 - (3,147 ) 879 (1,169) 74,223 1,441,866
Deferred tax liabilities

Provision for decomissioning
and site restoration 371,738 - - - - (6,672) 365,066
Finance lease assets 29,013 - - - - 892 29,905
Deferred revenues 10,750 - - - - (2,682) 8,068
Employee benefits 8,549 - - - (395) 8,503 16,657
Provision for impairment 1,081 - - - - 927 2,008
Oil and gas properties (2,801,228 ) - - - - (269,388) (3,070,616)
Excess of fair value over net
book value (14,114 ) - - - - 1,516 (12,598)
Fixed assets (351,100 ) - - 174 - 149,035 (201,891)
Unrealized profits from
transaction at consolidation
level (377,158 ) - - - - 34,302 (342,856)
Others 274,317 - - 949 - (376,415) (101,149)
deferred
tax liabilities - net (2,848,152 ) - - 1,123 (395) (459,982) (3,307,406)
Total (1,477,072 ) - (3,147 ) 2,002 (1,564) (385,759) (1,865,540)
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Annual Report 2018

e. Deferred tax (continued)

December 31, 2017
Additions
January 1, from business Charged to Translation Charged to Charged to December 31,
2017 combination equity adjustment OCI profit or loss 2017
Deferred tax assets

Employee benefits 302,651 - 321 3,365 40,486 (32,352) 314,471
financial assets 114,611 - 864 (98) - 6,029 121,406
and site restoration 123,449 - - - - 12,945 136,394
Provision for incentives and
performance bonuses (tantiem) 72,084 - - 102 - 11,327 83,513
Unrealized profits from transaction
at consolidation level 48,756 - - - - 16,069 64,825
Fixed assets (24,717) - 2,612 (17) - 540,458 518,336
Provision for impairment
of inventories 29,194 - - (8) - 7,970 37,156
non-free and non-clear assets 27,588 - - - - - 27,588
Tax losses carry-forward 41,240 - - - - (27,476) 13,764
Deferred revenues 12,100 - - 140 - (4,650) 7,590
Accrual for legal cost 1,618 - - - - 2,022 3,640
Oil and gas properties (37,375) - - - - 32,373 (5,002)
Finance lease assets and
liabilities (23,333) - - (1) - 12,129 (11,205)
Discount and unamortized
debt issuance cost (7,962) - - - - 2,025 (5,937)
Others 71,559 - 666 (36) - (7,648) 64,541
deferred tax assets - net 751,463 - 4,463 3,447 40,486 571,221 1,371,080
Deferred tax liabilities

and site restoration 367,350 (1,058) - - - 5,446 371,738
Finance lease assets 30,670 - - - - (1,657) 29,013
Deferred revenues 22,404 - - - - (11,654) 10,750
Employee benefits 7,353 - - - 180 1,016 8,549
Provision for impairment 1,085 696 - - - (700) 1,081
Oil and gas properties (2,437,710 ) (276,196) - - - (87,322) (2,801,228)
Excess of fair value over net
book value (30,845 ) 2,352 - - - 14,379 (14,114)
Unrealized profits from
transaction at consolidation
level (410,531 ) - - - - 33,373 (377,158)
Fixed assets (242,785 ) (8,362) - 575 - (100,528) (351,100)
Others 164,492 48 - 1,087 - 108,690 274,317
deferred
tax liabilities - net (2,528,517) (282,520) - 1,662 180 (38,957) (2,848,152)
Total (1,777,054 ) (282,520) 4,463 5,109 40,666 532,264 (1,477,072)
Deferred tax assets and liabilities as of December 31, 2018 and 2017 have been calculated after
taking into account the applicable tax rates for each respective period.
The Group’s management believes that the above deferred tax assets can be fully recovered
through future taxable income.
f. Administration
The Indonesian prevailing Tax Law requires each Company in the Group to submit individual tax
returns on the basis of selfs assessment. Under the prevailing regulations, DGT may assess or
amend tax within certain periods. For the fiscal year of 2007 and backwards, this amendment
period is within ten years from the time the tax is due, but not later than 2013, while for the fiscal
year of 2008 and onwards, the period is within five years from the time the tax is due.
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SECURING ENERGY

g. Tax amnesty
The Company participated in Tax Amnesty Program on March 31, 2017 and received the
certificate of Tax Amnesty No. KET-369/PP/WPJ.19/2017 on April 6, 2017. As a result, the
Company withdrew, by law, all processes of Objections, Appeals, and Judicial reviews for the
fiscal year until 2015.
The results of the tax amnesty program are as follows:

a. The Company’s remaining amount of 2014 fiscal loss amounting to US$75,362 will not be
compensated.
b. Tax dispute expense which was previously recognized in prepaid tax - non current portion
amounting to US$621,148 (net of provision which has been recorded) (Note 39).
PT Pertamina Lubricants, a subsidiary, participated in Tax Amnesty Program on March 31, 2017
and received the certificate of Tax Amnesty on April 5, 2017. As a result, PT Pertamina Lubricants
withdrew, by law, all processes of Objections, Appeals, and Judicial reviews for the fiscal year until
2015.
As consequences of the tax amnesty program discussed above, PT Pertamina Lubricants written-
off its input VAT amounting to Rp210,301 million (equivalent to US$15,418).
h. Fixed asset revaluation for tax purposes
The Company submitted a request to revalue certain refineries assets for tax purposes on
December 28, 2016.
On July 10, 2017, the Company received an approval for the revaluation of refineries as referred to
the decision of the DGT No. KEP-104/WPJ.19/2017. The consequences of the approval are as
follows:
a. Prepaid tax of final income tax amounting to US$129,610 was recognized as expense
(Note 39).
b. Recognized deferred tax assets amounting to US$532,660.
41. RELATED PARTY BALANCES AND TRANSACTIONS
Significant related party accounts are as follows:
Cash and cash equivalents (Note 6) 8,416,251 6,065,489

Restricted cash (Note 7) 86,230 88,896
Trade receivables - related parties (Note 41a) 1,297,651 1,095,016
Due from the Government (Note 9) 4,758,409 2,155,739
Other receivables - related parties (Note 41b) 149,178 255,054
Restricted cash - non-current (Note 15) 876,168 834,874
Total 15,583,887 10,495,068
As a percentage of total assets 24% 18%
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Annual Report 2018

41. RELATED PARTY BALANCES AND TRANSACTIONS (continued)
Significant related party accounts are as follows: (continued)
Short-term loans (Note 16) 3,164,724 355,518

Trade payables - related parties (Note 41c) 78,781 49,277
Due to the Government (Note 18) 2,002,825 1,831,245
Long-term liabilities (Note 20) 179,361 174,638
Other payables - related parties (Note 41d) 54,011 56,625
Total 5,479,702 2,467,303
As a percentage of total liabilities 16% 8%
a. Trade receivables
Trade receivables - related parties result from domestic sales of crude oil, natural gas and
geothermal energy and the export of oil products.
Trade receivables - related parties 1,330,381 1,141,863

Net 1,297,651 1,095,016
Trade receivables based on customers are as follows:
PLN and its subsidiaries 381,559 385,419

Indonesian Armed Forces (“TNI”)/
Ministry of Defence (“Kemhan”) (Note 48b.II.i) 318,142 258,566
PT Garuda Indonesia (Persero) Tbk. 226,166 106,801
PT Patra SK 40,013 40,117
PT Donggi-Senoro LNG 28,828 14,789
PT Pupuk Indonesia (Persero) 25,412 43,667
PT Pembangkit Jawa-Bali 17,484 1,069
PT Aneka Tambang 14,226 5,001
PT Merpati Nusantara Airlines (Persero) 11,499 12,254
PT Energy Trading Co., Ltd. 22 47,275
Others 267,030 226,905
1,330,381 1,141,863
Total 1,297,651 1,095,016
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Movements in the provision for impairment of trade receivables from related parties are as follows:

Reclassification of the beginning balance of the
provision for account receivable 361 -
Reversal of provision for impairment
for recovered receivables - net 18,373 92,757
Impairment during the year (7,606) (32,854)
Foreign exchange differences 2,989 (926)
Management believes that the provision for impairment is adequate to cover possible losses that
may arise from the uncollectible trade receivables from related parties.
Details of trade receivables by currencies are as follows:
Rupiah 870,672 610,347

US Dollar 459,641 531,449
Others 68 67
Total 1,330,381 1,141,863
Receivables from fuel and lubricant distribution to the Indonesian Armed Forces/Ministry of
Defence
The fuel and lubricant distribution to the Indonesian Armed Forces/Ministry of Defence is based on
the planned needs of the Indonesian Armed Forces/Ministry of Defence and is capped by the State
Budget for Fuels and Lubricants (“BMP”) as one of the expenditure items of the Indonesian Armed
Forces/Ministry of Defence, the details are as follows:

Distribution of fuel and lubricant 479,959 383,307
Collections from BMP distribution (403,723) (764,355)
Foreign exchange differences (16,660) (5,336)
Net 318,142 258,566
As of December 31, 2018 and 2017, management has recognized impairment on this receivables
amounting to US$12,992, and US$10,409, respectively.
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Annual Report 2018

Receivables from fuel distribution to PLN/Perusahaan Listrik Negara
The Company distributes diesel fuel and industrial fuel oil to PLN for their power plant in all regions
across Indonesia. In 2018, the Company has made collections from PLN based on the price
agreed by the Boards of Directors of the Company and PLN on May 22, 2018.
If there is a difference between the provisional and the final agreed formulation prices, the
adjustment will be recorded in the period when the final formulation prices agreement is
completed.
b. Other receivables
Other receivables by customers are as follows:
PT Donggi-Senoro LNG 115,500 109,458

PT Merpati Nusantara Airlines (Persero) 18,190 19,472
PT Jawa Satu Power - 96,000
PT Perta Daya Gas - 34,152
Others (each below US$10,000) 100,011 97,181
Sub-total 233,701 356,263

Sub-total 214,085 335,403

Non-current portion (Note 15) 64,907 80,349
Movements in the provision for impairment of other receivables from related parties are as follows:

Reversal of impairment on the recovered
receivables - net 699 127
Impairment during the year (705) (162)
Foreign exchange differences 1,250 158
Management believes that the provision for impairment is adequate to cover possible losses that
may arise from the uncollectible other receivables from related parties.
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b. Other receivables (continued)
Receivables from PT Donggi-Senoro LNG
The receivables from PT Donggi-Senoro LNG as of December 31, 2018 and 2017, amounting to
US$115,500 and US$109,458, respectively are intended for the construction of a LNG production
facility with a capacity of 2 million tonnes per year. PT Donggi-Senoro LNG is owned by PHE
(29%), Sulawesi LNG Development Limited (59.9%) and PT Medco LNG Indonesia (11.1%). This
project, which was planned to be finalised in 4 years, is funded by 40% from equity and 60% from
loans.
The interest rate on the loan is one month US Dollar LIBOR plus 3.75% per annum and interest is
due every three months after the loan drawdowns. In 2018 and 2017, accrued interest was added
to the loan since the LNG production facility is still under construction. Interest income for the
period ended December 31, 2018 and 2017 were US$7,110 and US$4,908, respectively.
PT Merpati Nusantara Airlines (Persero) (“MNA”)
On October 27, 2009, MNA requested to restructure its payable. An agreement was made on
October.17,.2011, through a meeting at the MoSOE. As of December 31, 2018 and 2017 the
provision for impairment for this receivable amounted to US$18,190 and US$19,472, respectively.
c. Trade payables

PT Asuransi Jasa Indonesia (Persero) 6,279 -
Others 72,502 49,277
Total 78,781 49,277
d. Other payables

PLN 6,044 31,452
Others 47,967 25,173
Total 54,011 56,625
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Annual Report 2018

e. Sales and other operating revenues
The Group made sales and other operating revenues to related parties for the periods ended
December 31, 2018 and 2017. Sales to related parties represent 24% and 18% of the total sales
and other operating revenues for the respective periods/years. The details are as follows:
Domestic sales of crude oil, natural gas,

geothermal energy and oil products
Government-related entities 4,872,641 3,961,054
Shareholder 3,553,097 401,299
Associates 1,222 735
Subsidy reimbursements from the Government
Shareholder (Note 29) 5,632,468 3,572,084
Marketing fees
Shareholder 15,432 25,474
Revenues from other operating activities
- Government-related entities 108,514 128,870
Total 14,183,374 8,089,516
f. Cost of goods sold
Purchases from related parties for the years ended December 31, 2018 and 2017 represent 25%
and 22% of the total cost of goods sold, recpectively. The details are as follows:
Crude oil for shareholder 10,002,633 6,879,687

Oil products:
Associates 332,752 82,140
Joint ventures 158,260 174,842
Total 10,493,645 7,136,669
g. Compensation of key management and Board of Commissioners
Key management comprises the Board of Directors and other key management personnel who
have significant involvement in the operations of the Company. The compensation paid or payable
to key management and Board of Commissioners is shown below:
Salaries and other benefits 47,273 52,781
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h. Relationship with related parties
The nature of relationship with the related parties are as follows:

Relationships Related parties
(i). Shareholder The Government of the Republic of Indonesia
(ii). Associates PPT Energy Trading Co. Ltd.
PT Trans-Pacific Petrochemical Indotama
PT Donggi-Senoro LNG
PT Asuransi Samsung Tugu
Seplat Petroleum Development Company Plc
(iii). Joint ventures PT Patra SK

PT Perta Samtan Gas
PT Perta Daya Gas
PT Indo Thai Trading
PT Elnusa CGGVeritas Seismic
Unimar LLC
PT Transportasi Gas Indonesia
PT Permata Karya Jasa (Perkasa)
(iv). Common key management Koperasi Karyawan Pertamina

Dana Pensiun Pertamina
Pertamina Foundation
Yayasan Kesehatan Pertamina
(v). Government-related entities Indonesian Armed Forces

Polisi Republik Indonesia (Polri)
Ministry of Finance
PT Perusahaan Listrik Negara (Persero)
PT Pupuk Indonesia (Persero)
PT Krakatau Steel (Persero) Tbk.
PT Garuda Indonesia (Persero) Tbk.
PT Merpati Nusantara Airlines (Persero)
PT Wijaya Karya (Persero) Tbk.
PT PAL Indonesia (Persero)
PT Bina Bangun Wibawa Mukti
PT Rekayasa Industri
PT Asuransi Jasa Indonesia (Persero)
PT Sarana Multi Infrastruktur (Persero)
BNI
BNI Syariah
BRI
Bank Mandiri
BTN
BSM
Lembaga Pembiayaan Ekspor Indonesia
PT Arun Natural Gas Liquefaction

PT Badak Natural Gas Liquefaction
State-Owned Enterprises
Local Government-Owned Enterprises
(vi). Key management personnel Board of Directors

Other key management personnel
(vii). Governance oversight body Board of Commissioners
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Annual Report 2018

42. SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by the strategic
steering committee that are used to make strategic decisions.
Segments are grouped into two principal business activities consisting of Upstream and Downstream,
representing the Company's reportable segments as defined in the accounting standards for segment
reporting SFAS 5 (Amendment 2014), Operating Segments (Note 2v). Business activities related to
Gas and New and Renewable Energy are currently grouped into Other segment because they still
have not met the quantitative thresholds as a reportable operating segment.
December 31, 2018
Total before Total

Upstream Downstream Others*) elimination Elimination consolidated
External sales 7,054,464 45,691,622 5,187,485 57,933,571 - 57,933,571

Inter-segment sales 5,498,100 399,699 266,115 6,163,914 (6,163,914) -
Total segment revenues 12,552,564 46,091,321 5,453,600 64,097,485 (6,163,914) 57,933,571
Segment results**) 5,960,645 (286,777) 616,351 6,290,219 (43,479) 6,246,740
Gain on foreign exchange - net 19,622

Finance income 256,573
Finance costs (835,238 )
joint venture 122,724
Other expenses - net (80,825)
(517,144 )
Profit before income tax 5,729,596

Income tax expense (3,013,202)
Profit for the year 2,716,394
Profit for the year attributable to:

Owners of the parent 2,572,542
Non-controlling interests 143,852
Other Information
Segment assets 24,620,521 35,093,033 6,655,756 66,369,310 (4,469,912) 61,899,398
Long-term investments 1,472,711 14,970,480 183,158 16,626,349 (13,807,295) 2,819,054
Total assets 26,093,232 50,063,513 6,838,914 82,995,659 (18,277,207) 64,718,452
Total liabilities 10,092,998 26,403,047 3,636,191 40,132,236 (5,023,824) 35,108,412
Depreciation, depletion
and amortization expense 1,684,534 715,492 576,536 2,976,562 - 2,976,562
Additions to fixed assets,

oil & gas and geothermal
properties 3,110,810 1,135,645 287,056 4,533,511 - 4,533,511
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42. SEGMENT INFORMATION (continued)

December 31, 2017
Total before Total

Upstream Downstream Others*) elimination Elimination consolidated
External sales 4,489,320 37,000,553 4,510,850 46,000,723 - 46,000,723

Inter-segment sales 3,477,012 372,195 427,098 4,276,305 (4,276,305) -
Total segment revenues 7,966,332 37,372,748 4,937,948 50,277,028 (4,276,305) 46,000,723
Segment results**) 3,327,892 1,282,198 759,793 5,369,883 (183,477) 5,186,406
Gain on foreign exchange - net 58,137

Finance income 233,074
Finance costs (817,711 )
joint venture 37,904
Other expenses - net (830,582 )
(1,319,178 )
Profit before income tax 3,867,228

Income tax expense - net (1,166,824 )
Profit for the year after

the effect of merging entity’s
income adjustment 2,700,404
Profit for the year after the effect

of merging entity’s income
adjustment attributable to:
Owners of the parent 2,621,732
Non-controlling interests 78,672
Other Information
Segment assets 23,969,823 28,451,374 8,878,406 61,299,603 (6,831,146) 54,468,457
Long-term investments 1,476,703 16,490,057 451,653 18,418,413 (15,447,495) 2,970,918
Total assets 25,446,526 44,941,431 9,330,059 79,718,016 (22,278,641) 57,439,375
Total liabilities 12,148,638 21,037,697 4,165,216 37,351,551 (6,925,443) 30,426,108
Depreciation, depletion
and amortization expense 1,507,444 692,767 603,798 2,804,009 - 2,804,009
Additions to fixed assets,

oil and gas, and geothermal
properties 3,672,689 1,529,130 221,357 5,423,176 - 5,423,176
*) Others consist of office and housing rentals, hotel operation, air transportation services, health services and operation of hospitals,
investment portfolio management, gas transportation services, human resources development and insurance services.
**) Gross profit less sales and marketing expenses, and general and administrative expenses.
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Annual Report 2018

42. SEGMENT INFORMATION (continued)
Transactions between segments are carried out at agreed terms between the companies.
The following table shows the distribution of the Group’s consolidated revenues based on its
geographic segments:
Revenue
Indonesia 54,296,618 44,126,442
Other countries 3,636,953 1,874,281
Consolidated revenues 57,933,571 46,000,723
Revenues from two customers of the downstream segment for the years ended December 31, 2018
and 2017 represented approximately 21% and 11% (US$12,039,130 and US$4,864,790) of total sales
and other operating revenues, respectively.
All of the Group’s assets are substantially located in Indonesia, except for several owned assets
outside the country such as PIEP’s Subsidiaries which are located in Algeria, Iraq, Malaysia, Italy,
France, Myanmar, Canada, Congo, Tanzania, Gabon, Colombia, Namibia, and Venezuela.
43. OIL AND GAS CONTRACT ARRANGEMENTS
a. PSC
PSCs are entered into by PSC Contractors with SKK Migas (previously BP Migas) acting on behalf
of the Government, for a period of 20-30 years, and may be extended in accordance with
applicable regulations.
- Working area
The PSC working area is a designated area in which the PSC Contractors may conduct oil and
gas operations. On or before the tenth year from the effective date of the PSCs, the PSC
Contractors must return a certain percentage of this designated working area to SKK Migas on
behalf of the Government during the term of the PSC.
Crude oil and natural gas production sharing is determined annually, representing the total
liftings of crude oil and gas in each period/year, net of investment credit, FTP, and cost
recovery.
The PSC Contractors are subject to tax on their taxable income from their PSC operations
based on their share of equity oil and natural gas production, less bonuses, at a combined tax
rate comprising of corporate income tax and dividend tax.
- Cost recovery
Annual cost recovery comprises of:

i. Current year non-capital costs;
ii. Current year amortization of capital costs; and
iii. Unrecovered prior years’ operating costs (unrecovered costs).
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43. OIL AND GAS CONTRACT ARRANGEMENTS (continued)
a. PSCs (continued)
- Crude oil and natural gas prices
The PSC Contractors’ crude oil production is priced at ICP. Natural gas deliveries to third
parties and related parties are valued based on the prices stipulated in the respective gas
sales and purchase contracts.
- DMO
Crude oil
The PSC Contractors are required to supply the domestic market in Indonesia with the
following annual calculation:
i. Multiply the total quantity of crude oil produced from the contract area by a fraction, the
numerator of which is the total quantity of crude oil to be supplied and the denominator is
the entire crude oil production from all petroleum companies in Indonesia.
ii. Compute 25% of the total quantity of crude oil produced in the PSC’s working area.
iii. Multiply the lower computed, either under (i) or (ii) by the percentage of the contractor’s
entitlement.
The price of DMO crude oil is supplied is equal to the weighted average of all types of crude oil
sold by the PSC Contractors or other price determined under the PSC.
Natural gas
The PSC Contractors are required to supply the domestic market in Indonesia with 25% of
total quantity of natural gas produced in the working area multiplied by the PSC Contractor’s
entitlement percentage.
The price of DMO for natural gas is the price determined based on the agreed contracted
sales price.
- FTP
The Government and Contractors are entitled to receive an amount ranging from 10%-20% of
the total production of crude oil and natural gas each year, before any deduction for recovery
of operating costs and investment credit.
- Ownership of materials, supplies, and equipment
Materials, supplies, and equipment acquired by the PSC Contractors for crude oil and natural
gas operations belong to the Government. However, the PSC Contractors have the right to
utilize such materials, supplies, and equipment until they are declared surplus or abandoned
with the approval of SKK Migas.
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Annual Report 2018

b. PT Pertamina EP cooperation agreements with SKK Migas
On September 17, 2005, an oil and gas cooperation contract in the form of a Pertamina Petroleum
Contract (“PPC”) , equivalent to a PSC, was signed between a Special Task Force For Upstream
Oil and Gas Bussiness Activities (“SKK Migas” - formerly Oil and Gas Upstream Activities
Agency/“BP Migas”) and PT Pertamina EP as a successor contract to PPC. This is valid for a
period of 30 years from September 17, 2005 until September 16, 2035, which may be extended in
accordance with a written agreement between the parties (SKK Migas and PT Pertamina EP) and
approval from the Government. As a consequence of the Company assuming Pertamina’s PPC, all
of Pertamina’s assets and liabilities in relation to PPC were transferred to the Company on a book
value basis.
PT Pertamina EP’s cooperation contract has the following financial provisions:
- Working area
The area represents the former Pertamina Entity’s exploration and production areas excluding
Cepu and Randugunting Blocks.
PT Pertamina EP and the Government’s shares of equity (profit) of oil and gas production is
67.2269% and 32.7731%, respectively.
- FTP
The Government and PT Pertamina EP are entitled to receive an amount equal to 5% of the
total production of oil and gas each year before any deduction for recovery of operating costs
and investment credit. FTP is shared between the Government and PT Pertamina EP in
accordance with the entitlements to oil and gas production.
- Crude and natural gas price
Sales of Company’s crude are valued with ICP. Transfer of natural gas are valued with
decreed price in Gas Sales Contract (“PJBG”).
c. PT Pertamina EP cooperation agreements with other parties
PT Pertamina EP has entered into cooperation agreements with other parties in conducting oil and
gas activities in certain parts of its PSC working area, under TAC or operating cooperation
contracts with the approval of the Government through SKK Migas.
The recoverable costs and shares of equity (profit) of the other parties under the following
cooperation agreements form part of PT Pertamina EP’s cost recovery under its PSC.
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SECURING ENERGY

c. PT Pertamina EP cooperation agreements with other parties (continued)
Cooperation agreements with other parties are as follows:
- Technical Assistance Contract (“TAC”)
Under a TAC, operations are conducted through partnership agreements with PT Pertamina
EP. TACs are awarded for fields which are currently in production, or which previously in
production, but the production has ceased. Crude oil and natural gas production is divided into
non-shareable and shareable portions. The non-shareable portion represents the production
which is expected from the field (based on the historic production trends of the field) at the
time the TAC is signed and accrued to PT Pertamina EP. Non-shareable production
decreases annually, reflecting expected declines in production. The shareable portion of
production corresponds to the additional production resulting from the Partners’ investments in
the TAC fields.
The Partners are entitled to recover costs, subject to specified annual limitations depending on
the contract terms. The remaining portion of shareable production (shareable production less
cost recovery) is split between PT Pertamina EP and the Partners. The Partners’ share of
equity (profit) of oil and gas production is stipulated in each contract and ranges from
26.7857% to 35.7143% for oil and 62.5000% for gas, respectively.
As of December 31, 2018, there are 7 TAC arrangements of PT Pertamina EP for Sumatera
and Java working area with contract terms of 20 years. The effective term of those contracts
ranges from 2000 until 2022 and the end term of those contracts range from 2020 until 2022.
At the end of the TACs, all TAC assets are transferred to PT Pertamina EP. The TAC Partners
are responsible for settling all outstanding TAC liabilities to third parties until the end of the
TACs.
- Operation cooperation (“OC”) contracts
In an OC contracts, operations are conducted through partnership agreements with

PT Pertamina EP. OC contracts are granted for fields which are currently in production, or
previously had been in production, in which production has ceased, or for areas with no
previous production. The two types of OC contracts are:
a. OC exploration-production contract
b. OC production contract
Under an OC exploration-production contract, there is no Non-Shareable Oil (“NSO”) under an

OC production contract, the crude oil production is divided into non-shareable and shareable
portions.
The NSO portion of crude oil production represents the production which is expected from the
field (based on the historic production trends of the field) at the time the OC contract is signed,
and it accrues to PT Pertamina EP. The shareable portion of crude and gas production
corresponds to the additional production resulting from the Partners’ investments in the OC
contract fields and split between the parties in the same way as under a cooperation contract.
In certain OC production contracts, in the event that the production is the same as or less than
the NSO, the Partner’s production cost shall not be deferred and will be recovered with the
following provisions:
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Annual Report 2018

c. PT Pertamina EP cooperation agreements with other parties (continued)
- Operation cooperation (“OC”) contracts (continued)
Partner may recover the operating costs in any calendar year if the amount of the Partner’s
production is greater than the NSO up to a maximum of incremental oil which comprised of:
1) Cost recovery for lifting NSO up to a maximum of 80% (eighty percent) from operating
costs of NSO;
2) Cost recovery for lifting incremental oil up to a maximum of 80% (eighty percent) from the
production of incremental oil produced and sold and that were not used in that calendar
year.
If, in any calendar year, the operating costs exceed the value of such crude oil allocated for
the operating in such calendar year, then the unrecovered excess will be recovered in the
following years.
The Partner’s share of equity (profit) of oil and gas production is stipulated in each contract
and ranges from 16.6667% to 29.8039% for oil and 28.8627% to 53.5714% for gas,
respectively.
Specified investment expenditure commitments are required to be made in the first three years
after the OC contract. To ensure that these expenditure commitments will be met, the Partners
are required to provide PT Pertamina EP with irrevocable and unconditional bank guarantees.
The OC Partners are also required to make payments, to PT Pertamina EP before the date of
signing of the OC contracts, of the amounts stated in the bid documents.
As of December 31, 2018, there are 27 OC partnership arrangements of PT Pertamina EP for

Sumatera, Java, Kalimantan and Papua working area with contract terms of 15-20 years. The
effective term of those contracts ranges from 2007 until 2018 and the end term of those
contracts ranges from 2022 until 2035.
At the end of OC contracts, all OC assets are transferred to PT Pertamina EP. The OC
Partners are responsible for settling all outstanding OC liabilities to third parties until the end of
the OC contracts.
- Unitization agreements
In accordance with Government Regulation No. 35 Year 2004 on Upstream Oil and Gas
Business Activities, a PSC contractor is required to conduct unitization if it is proven that its
reservoir extends into another contractor’s Working Area. The MoEMR will determine the
operator for the unitization based on the agreement between the contractors entering the
unitization after considering the opinion of SKK Migas.
As of December 31, 2018, there are 6 Unitization arrangements of PT Pertamina EP for

Sumatera, Java and Papua working area with contract term for 10-50 years. The effective term
of those contracts ranges from 1985 until 2013 and the end term of those contracts ranges
from 2023 until 2035.
Based on SKK Migas Letter No. SRT-0493/SKKMA0000/2018/S1 dated June 25, 2018,
regarding the Stipulation of New Operators in Unitization of Sukowati Customers, CPA Mudi
Production Facilities and Cintanatomas FSO, PT Pertamina EP was appointed as the new
operator of the Sukowati field (Note 4h).
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SECURING ENERGY


d. PHE’s cooperation agreement with other parties
- Gross split contract
On January 13, 2017, the regulation of the Minister of Energy and Mineral Resources
No.08/2017 regarding principles of the Production Sharing Contract without Cost Recovery
Mechanism, also known as Gross Split PSC was issued.
In Gross Split PSC the sharing of oil and gas production between the Government of
Indonesia and the Contractors is based on the following 3 criteria:
1. Base Split
2. Variable Split
3. Progressive Split
The Government has also arranged matters related to Gross Split PSC as follows:
i. The tax regime applicable to the Gross Split PSC is in accordance with the provisions of
the income tax law;
ii. The contractors of Gross Split PSC must reimburse unrecovered investment costs to the
old PSC contractors.
iii. The oil and gas assets of the old PSC which are now owned by the Directorate General of
State Assets (“DJKN”) are to be used by the Gross Split PSC contractors based on lease
scheme.
iv. Leases are levied on oil and gas assets used by the Gross Split PSC contractors and have
the cost recovery, then the fair value is recalculated based on the Indonesian Appraisal
Standard by the Public Appraiser, multiplied by the rental rate set by the DJKN.
As of December 31, 2018, the signed gross split PSC is as follows:
Effective Production Percentage
PSC date commencement Expiry date of Contract
partners Working area Area of contract date of contract participation Production period
MUJ ONWJ Offshore North West Java 19/01/2017 27/08/1971 18/01/2037 90% Oil and gas 20 years
West Java Block
None Tuban Block East Java 20/05/2018 12/02/1997 20/05/2038 100% Oil and gas 20 years
None Ogan Komering South 20/05/2018 11/07/1991 20/05/2038 100% Oil and gas 20 years
Block Sumatera
None Offshore Southeast Southeast 06/09/2018* 1975 06/09/2038 100% Oil and gas 20 years
Sumatera Block Sumatera
None NSO Block North 17/10/2018* 01/10/2015 17/10/2038 100% Oil and gas 20 years
Sumatera
Offshore
None Raja/Pendopo South 06/07/2019** 21/11/1992 05/07/2039 100% Oil and gas 20 years
Block Sumatera
None Jambi Merang Jambi 10/02/2019** 22/02/2011 09/02/2039 100% Oil and gas 20 years
Block
Eni East
Sepinggan East Sepinggan Block East 20/7/2012*** - 20/07/2042 15% Oil and gas 30 years
Ltd. Sepinggan
Petrogas
(Basin) Ltd. Kepala Burung Block Papua 15/10/2020**** 07/10/1996 15/10/2040 30% Oil and gas 20 years
Petrogas
(Island) Ltd. Salawati Block Papua 23/04/2020**** 21/01/1993 23/04/2040 30% Oil and gas 20 years
* Gross Split PSC was signed on April 20, 2018

** Gross Split PSC signed on May 31, 2018
*** The PSC amendment to Gross Split PSC was signed on December 11, 2018
**** Gross Split PSC was signed on July 11, 2018
- Indonesian participation arrangements (“IP”)

Through the IP arrangements, the Company, a State-Owned Enterprise, is offered a 10%
working interest in PSCs at the first time Plans of Development (“POD”) which was approved
by the Government of Indonesia (the “Government”), represented by SKK Migas. The 14.28%
interest in Jabung Block represents the acquisition of additional interest of 4.28% by the
Company. The 5% interest in the Tengah Block represents 10% of the 50% foreign
contractor’s share. The Company assigned these IP interests to PHE’s subsidiaries on
January 1, 2008.
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Annual Report 2018

d. PHE’s cooperation agreement with other parties (continued)
- Indonesian participation arrangements (“IP”) (continued)
As of December 31, 2018, there are 5 IP partnership arrangements of PHE for Sumatera,
Kalimantan and Papua working area with contract terms of 20-30 years. The effective term of
those contracts ranges from 1990 until 2005 and the end term of those contracts ranges from
2020 until 2028 with percentage of participation range from 10% until 14.28%.
- PSC interests acquired after the issuance of Law No.22 year 2001, related to Oil and Gas
1. Oil and gas
As of December 31, 2018, there are 18 oil and gas partnership arrangements of PHE for
Sumatera, Java, Kalimantan, Sulawesi, Maluku and Papua working area with contract
terms of 20-30 years. The effective term of those contracts range from 1998 until 2016 and
the end term of those contracts ranges from 2019 until 2046 with percentage of
participation ranging from 15% until 100%.
2. Coal bed methane
As of December 31, 2018, there are 14 Coal Bed Methane (“CBM”) partnership
arrangements in exploration activities for Sumatera and Kalimantan working areas, with
contract terms of 30 years. The effective terms of those contracts ranges from 2008 until
2012, and the end term of those contracts ranges from 2038 until 2042 with percentages
of participation range from 27.5% until 100%.
3. Unconventional oil and gas
As of December 31, 2018, there are 2 Unconventional Oil and Gas partnership
arrangements for Sumatera working areas with contract term of 30 years. The effective
terms of those contracts ranges from 2013 until 2015, and the end term of those contracts
ranges from 2043 until 2045 with percentages of participation interests range from 50%
until 100%.
- Joint operating body-production sharing contracts (“JOB-PSC”)
In a JOB-PSC, operations are conducted by a joint operating body between PHE’s

Subsidiaries and the contractors. The PHE Subsidiaries’ share of expenditures is paid in
advance by the contractors and repaid by PHE’s Subsidiaries out of their share of crude oil
and natural gas production, with a 50% uplift. After all expenditures are repaid, the crude oil
and natural gas production is divided between PHE’s subsidiaries and the contractors based
on their respective percentages of participation in the JOB-PSC. The contractors’ share of
crude oil and natural gas production is determined in the same manner as for a PSC.
As of December 31, 2018, there are 5 JOB-PSC Partnership arrangements of PHE for
Sumatera, Java, Kalimantan, Sulawesi, and Papua working area with contract terms of 30
years. The effective term of those contracts ranges from 1989 until 1998, and the end term of
those contracts ranges from 2019 until 2028 with percentage of participation ranging from
37.5% until 50%.
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d. PHE’s cooperation agreement with other parties (continued)
- Pertamina Participating Interests (“PPI”)
Through PPI arrangements, PHE owns working interests in contracts similar to JOB-PSC
contracts. The remaining working interests are owned by a contractor who acts as an operator.
PHE’s share of expenses is either funded by PHE on a current basis, or paid in advance by
the contractors and repaid by PHE out of their share of crude oil and natural gas production,
with a 50% uplift. The crude oil and natural gas production are divided between PHE and the
contractors based on their respective percentages of participation in the PSC. The contractors’
share of crude oil and natural gas production is determined in the same manner as for a PSC.
As of December 31, 2018, the Subsidiaries’ PPI arrangements were as follows:

Production Percentage
PPI Effective date commencement Expiry date of Contract
partners Working area Area of contract date of contract participation Production period
Conoco Philips B Block South Jambi 26/01/1990 26/09/2000 25/01/2020 25% Oil and gas 30 years
(South Jambi)
Ltd. and
Petrochina
International
Jambi B Ltd.
- Foreign oil and gas contract interests

Name of Working date of commencement of Contract
JOC JOB partners area Area contract date participation Production period
Petronas Carigali Petronas Carigali Offshore Malaysia 16/06/2003 26/07/2010 30% Oil and 29 years
Pertamina Sdn. Bhd., Sarawak gas
Petro-Vietnam Petrovietnam Block
Operating (SK 305)
Company Sdn.
Bhd. (“PCPP”)
In accordance with Government Regulation No. 35 Year 2004 on Upstream Oil and Gas
Business Activities, a contractor is required to conduct unitization if it is proven that its
reservoir extends into another Contractor’s Working Area. The Minister of Energy and Mineral
Resources will determine the operator for the unitization based on the agreement between the
contractors entering the unitization agreements after considering the opinion of SKK Migas.
Since several of PHE Subsidiaries’ oil and gas reservoirs extend into other Contractors’
Working Areas, PHE Subsidiaries entered into unitization agreements with several contractors.
As of December 31, 2018, there are 6 unitization agreements of PHE for Sumatera, Java,
Kalimantan, and Papua working areas, with contract terms ranging from 10-50 years. The
effective term of those contracts ranges from 1985 until 2014, and the end term of those
contracts ranges from 2019 until 2035.
- Extension and termination of PHE cooperation contract
PSC "B" ended on October 3, 2018. On September 25, 2018, the Government, through the
Aceh Oil and Gas Management Agency (BPMA), appoints PHE NSB as manager of the "B"
Working Area for 6 (six) months from October 4, 2018 or until PSC has just been signed,
whichever occurs first, with the basic forms and provisions of PSC in accordance with the
current "B" Working Area.
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d. PHE’s cooperation agreements with other parties (continued)
- Extension and termination of PHE cooperation contract (continued)
The Central Block PSC ended on October 4, 2018. The Government decides not to extend the
management of the Central Work Area by the existing Contractor. Until these consolidated
financial statements were prepared, PHE Tengah K together, with other contractors (Total
Tengah and Inpex Tengah Ltd.), are still in the process of completing their rights and
obligations after termination with the Government.
e. PT Pertamina EP Cepu (PEPC)’s cooperation agreements with other parties
On September 17, 2005, a Cooperation Contract ("PSC") was signed between SKK Migas and
PEPC (50% participating interest), MCL (25.50% participating interest) and Ampolex (24.50%
participating interest) (jointly called a Contractor) for a period of 30 years from September 17, 2005
to September 16, 2035, and may be extended in accordance with applicable regulations. The
conditions for PSC PEPC are as follows:
SC Working date of commencement Expiry date of Contract
Partner area Area contract date of contract participation Production period
ExxonMobil Cepu Limited Cepu Central 17/09/2005 31/08/2009 16/09/2035 45% Oil 30 years
Ampolex (Cepu) Pte. Ltd. Block Java
PT Sarana Patra Hulu Cepu East
PT Petrogas Jatim Utama Java
Cendana
PT Blora Patragas Hulu
PT Asri Dharma Sejahtera
As of December 31, 2018, the Subsidiaries’ unitization agreements are as follows:

Effective Production
Working date of commencement Expiry date Percentage of Contract
Partner area Area contract date of contract participation Production period
PT Pertamina EP EP Block Central Java 17/09/2005 - 16/09/2035 91.9399% Gas 30 years
Cepu Block East Java
f. PT Pertamina EP Cepu Alas Dara Kemuning (“PEPC ADK”) cooperation agreements with
SKK Migas
The PSC was entered into by PEPC ADK with SKK Migas action on behalf of the Government on
February 26, 2014 for a period of 30 years from February 26, 2014 until February 25, 2044. The
period may be extended in accordance with applicable regulations. The Company has a 100%
participating interest in the Alas Dara Kemuning Block PSC.
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g. PT Pertamina Hulu Indonesia (“PHI”) cooperation agreements with SKK Migas
- PSC
PSC is made by PSC contractors with the Government through the Special Task Force for
Upstream Oil and Gas Business Activities ("SKK Migas" - formerly the Executive Agency for
Upstream Oil and Gas Business Activities/"BP MIGAS") for a contract period of 20-30 years .
This period can be extended in accordance with applicable regulations.
As of December 31, 2018, PHI’s PSC Group are as follows:

Contract Starting Expiry
PSC Working effective production date of Partnership Contract
partner area Area date date contract percentage Production period
None Mahakam Onshore and 01/01/2018 01/01/2018 31/12/2037 100% Oil and gas 20 years
Block Offshore
East
Kalimantan
- Contract gross split

Contract Starting Expiry
PSC Working effective production date of Partnership Contract
partner area Area date date contract percentage Production period
None Sanga Sanga Onshore 08/08/2018* 08/08/2018 07/08/2038 100% Oil and gas 20 years
Block East
Kalimantan
None East Onshore and 25/10/2018* 25/10/2018 24/10/2038 100% Oil and gas 20 years
Kalimantan and Offshore
Attaka Block East
Kalimantan
* Contract was signed on April 20, 2018.
On December 31, 2018, PHI’s has unitisation agreements as follows:

Signing
date Start End Contract
Parties Operator Field Location of contract contract Production contract period
PT Pertamina Hulu PT Pertamina Nilam & Badak East In Progress 08/08/2018 08/08/2018 31/12/2037 20 years
Mahakam (PHM) Hulu Kalimantan
& Pertamina Hulu Sanga Sanga (KKS Mahakam
Sanga Sanga (PHSS) (PHSS) and KKS Sanga
Sanga)
PT Pertamina Hulu PT Pertamina Peciko East In Progress 25/10/2018 25/10/2018 31/12/2037 20 years
Mahakam (PHM) Hulu Mahakam Kalimantan
& Pertamina Hulu (PHM) (KKS Mahakam
Kalimantan Timur and KKS East
(PHKT) Kalimantan)
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h. PIEP’s directly and indirectly held foreign oil and gas PSC interests
As of December 31, 2018, the Company’s directly and indirectly held foreign oil and gas PSCs or
similar interests were as follows:
Date of
Effective commencement Percentage
Working date of of of Contract
Name of JV JV partners area Country contract production participation Production period
Menzel Lejmat Talisman Energy Inc 405a Block Algeria 2000 2003 65% Oil 25 years
North (MLN)
Murphy Sabah Murphy Sabah Oil Block K Malaysia 27/01/1999 2007 24% Oil and 38 years
Oil Co. Ltd. Co. Ltd. natural gas
Petronas Carigali
Sdn. Bhd.
Murphy Sabah Murphy Sabah Oil Block H Malaysia 19/03/2007 Development 24% Natural 38 years
Oil Co. Ltd. Co. Ltd. stage gas
Petronas Carigali
Sdn. Bhd.
Murphy Sarawak Murphy Sarawak SK309 Malaysia 27/01/1999 2003 25.5% Oil, natural 29 years
Oil Co. Ltd. Oil Co. Ltd. gas, and
Petronas Carigali condensate
Sdn. Bhd.
Murphy Sarawak Murphy Sarawak SK311 Malaysia 27/01/1999 2007 25.5% Oil, natural 29 years
Oil Co. Ltd. Oil Co. Ltd. gas, and
Petronas Carigali condensate
Sdn. Bhd.
Murphy Sarawak Murphy Sarawak SK314A Malaysia 07/05/2013 Exploration 25.5% - 27 years
Oil Co. Ltd. Oil Co. Ltd. stage
Petronas Carigali
Sdn. Bhd.
Mnazi Bay M&P (Operator); Mnazi Bay Tanzania October 2006 August 2015 60.075% & Gas 2031 and
Exploration TPDC 48.06% can be
Mnazi Bay extended
Development/ up to 2051
Production
Enzanga M&P (Operator); Ezanga Gabon January 1, 2014 2007 80% Oil 2034 and
Production The Gabonese can be
Republic; Tullow extended
up to 2054
Seplat Seplat (Operator); OML 4, 38, Nigeria June 30, 1989 July 2010 45% Oil and gas October 2038
Petroleum NPDC 41
Development
Company Plc Pillar Oil (Operator); OPL 283 Nigeria 2009 May 2012 40% Oil Oktober 2028
Seplat
Seplat dan NNPC OML 53 Nigeria 1997 1978 40% Oil June 2027
(Joint Operators)
Seplat and BelemaOil OML 55 Nigeria 1997 February 2017 n/a*) Oil June 2027
(Joint Operators);
NNPC
Petroregional del Lago Petroleos de Venezuela Urdaneta West Venezuela 2006 1974 40% Oil 2026
Mixed Company S.A. & Field
PDVSA Social
*) Under the revised commercial terms in relation to OML 55, starting July 2016, Seplat will no longer be a shareholder in BelemaOil but will instead receive interest income until a total sum of
US$330 million has been paid to Seplat. Working interest production reported for OML 55 is preceding volumes to end June 2016.
- Technical Service Contract (“TSC”)
As of December 31, 2018 and 2017, TSC participating interest held by PT Pertamina Irak
Eksplorasi Produksi (“PIREP”) were as follows:
Date of
Effective commence- Percentage
Working date of ment of of Contract
West Qurna ExxonMobil West Qurna Iraq 25/01/2010 25/01/2010 10% Oil 35 years
1 Field Iraq Limited, 1 Block
Operating Shell Iraq B.V.
Division PetroChina
International
Iraq FZE,
Oil Exploration
Company of
Iraqi Ministry
of Oil
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SECURING ENERGY


h. PIEP’s directly and indirectly held foreign oil and gas PSC interests
- Unitisation agreements
As of December 31, 2018, PIEP’s unitization agreements are as follows:
1. Algeria
Date of
Effective commence- Percentage
Working date of ment of of Contract
El Merk (“EMK”) Talisman (Algeria) B.V., 405a Block Algeria March 2007 2013 16.90% Oil, 25 years
Sonatrach, Condensate,
Anadarko, and LPG
Eni,
Maersk,
Company
Ourhoud Talisman (Algeria) B.V., . 405a Block Algeria December 1997 2002 3.56% Oil 25 years
Sonatrach,
Anadarko, Eni,
Maersk, Company
2. Malaysia
PMEP’s Effective Date of
Unit percentage date of commencement Contract
Parties Operator field of participation contract of production Production period
Shell, Conoco Shell Gumusut 3.2% 20/09/2004 18/11/2012 Oil and natural gas Not specified
Phillips, Carigali Kakap
Murphy, PMEP Field
Shell, Conoco Murphy Siakap 9.6% 01/01/2007 28/02/2014 Oil and natural gas Not specified
Phillips, Carigali, North Petai
Murphy, PMEP Field
i. PGN Cooperation Agreement
As of December 31, 2018, PGN has interests in the following oil and gas joint operations or
Service Contracts Participation and Economic Sharing Agreements:
Work Area Country Participating Interest
Ujung Pangkah Block Indonesia 100.00%

South Sesulu Block Indonesia 100.00%
Fasken Block United States of America 36.00%
Bangkanai Block Indonesia 30.00%
West Bangkanai Block Indonesia 30.00%
Muriah Block Indonesia 20.00%
Ketapang Block Indonesia 20.00%
Muara Bakau Block Indonesia 11.67%
Wokam II Block Indonesia 100.00%
Pekawai Block Indonesia 100.00%
West Yamdena Block Indonesia 100.00%
44. GEOTHERMAL WORKING AREAS

Since 1974, the former Pertamina Entity has been assigned geothermal working areas in Indonesia
based on various decision letters issued by the Minister of Mines and Energy. In accordance with
Government Regulation No. 31 Year 2003, all rights and obligations arising from the contracts and
agreements entered into between former Pertamina Entity and third parties, so long as these are not
contrary to Law No. 22 Year 2001, were transferred to Pertamina Entity effective September.17, 2003.
Pertamina Entity through its letter No. 282/C00000/2007-S0 dated March 12, 2007 assigned its
geothermal working areas to PGE effective from January 1, 2007. The transfer of Pertamina Entity’s
rights, obligations, and interests in geothermal business operations to PGE was approved by the
MoEMR in Letters No. 2198/30/DJB/2009 dated August 4, 2009 and No. 2523/30/DJB/2009 dated
September 1, 2009.
Effective from June 28, 2010, Pertamina Entity’s geothermal assets were transferred to PGE, and
formed part of Pertamina Entity’s contribution to PGE’s additional paid-up capital. This transfer of
Pertamina Entity’s geothermal assets were documented in Notarial Deed No. 23 dated June 28, 2010
of Lenny Janis Ishak, S.H.
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44. GEOTHERMAL WORKING AREAS (continued)
Based on the Decree of the Minister of Mines and Energy No. 2067 K/30/MEM/2012, concerning the
affirmation of the territory of power and changes in the coordinate boundaries of the exploitation of
geothermal resources, PT Pertamina Geothermal Energy has management rights over 14 geothermal
WKPs. Referring to the original provision the Law No. 21 article 78 of 2014 concerning Geothermal
Energy, at the end of 2014, 2 (two) WKPs, namely Kotamobagu and Gunung Iyang Argopuro were
returned to the Government because the two WKPs up to December 31, 2014, were still not in the
Exploitation stage. Furthermore, Pertamina received two (2) new WKPs, namely Mount Lawu (based
on ESDM Ministerial Decree No.35.K/30/MEM/2016) and Seulawah (based on the Auction Winner
Determination Letter from Aceh Governor No. 541/53157 November 1, 2013). PGE will carry out
exploration activities in the two new WKPs.
The operations of the above geothermal working areas are conducted through own operations and
joint operating contracts.
As of December 31, 2018, PGE’s geothermal working areas were as follows:
a. Own operation
The following working areas are operated by PGE:

Working area Location Field status
Gunung Sibayak-Gunung Sinabung Sibayak, North Sumatra Production
Kamojang-Darajat Kamojang, West Java Production
Lahendong Lahendong, North Sulawesi Production
Gunung Way Panas Ulubelu, Lampung Production
Karaha-Cakrabuana Karaha, West Java Production
Lumut Balai dan Marga Bayur Lumut Balai, South Sumatera Development
Hululais Hululais, Bengkulu Development
Sungai Penuh Sungai Penuh, Jambi Exploration
Gunung Lawu Central Jawa Exploration
Seulawah Agam Aceh Exploration
b. Joint operating contracts (“JOCs”)
JOCs include geothermal activities in PGE’s working areas that are conducted by third parties. In
accordance with the JOCs, PGE is entitled to receive production allowances from the JOC
contractors at the rate of 2.66% for the Darajat JOC and 4% for the Salak, Wayang Windu, Sarulla,
and Bedugul JOCs of the JOC contractors’ annual net operating income as calculated in
accordance with the JOCs.
As of December 31, 2018, PGE’s JOCs were as follows:
Working Area Location Field Status Contractor

Cibeureum - Parabakti Salak, West Java Production Star Energy Geothermal Salak
Ltd. and Star Energy
Geothermal Salak Pratama
Ltd.
Pangalengan Wayang Windu, West Java Production Star Energy Geothermal

(Wayang Windu) Ltd.
Kamojang-Darajat Darajat, West Java Production Star Energy Geothermal

Darajat II Ltd.
Gunung Sibualbuali Sarulla, North Sumatera Production Sarulla Operation Limited
Tabanan Bedugul, Bali Exploration Bali Energy Ltd.
PGE's income from geothermal activities is subject to tax (Government share) at the rate of 34%
for the Work Area managed before the Law No. 21 of 2014 concerning Geothermal was issued.
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SECURING ENERGY

45. GOVERNMENT AUDIT
PT Pertamina EP, PT Pertamina EP Cepu, subsidiaries of PT Pertamina Hulu Energi
The accounting policies stipulated in the PSC are subject to interpretation by SKK Migas and the
Government. Every year, the accounting records and financial information from all PSC are subject to
audit by SKK Migas and/or the Government. Claims arising from the audit will be approved by the PSC
operator and recorded in accounting accounting by the PSC or further discussed with SKK Migas
and/or the Government. The settlement of the claims discussed requires a long negotiation process.
Management believes that the audit results for PT Pertamina EP Cooperation Contract and other PSC,
wherein PT Pertamina EP Cepu and the subsidiaries of PT Pertamina Hulu Energi have the a
Participating Interest, will not have a material impact on the Group's financial position and cash flows.
46. ADDITIONAL INFORMATION RELATED TO CASH FLOW
a. Activities that do not affect cash flow

Increase in finance lease assets under
fixed assets (Note 13) 19,828 103,022
Capitalization of borrowing costs to fixed assets

(Note 13) 31,500 25,611
Capitalization of borrowing costs to oil and gas, and

geothermal properties (Note 14) 24,885 32,338
Addition to oil and gas property arising

from provision for decommissioning and site
restoration (Note 23) 87,035 51,498
b. Reconciliation of liabilities from financing activities
Non-cash changes
Dec 31, Dividends Foreign

2017 Cash flows declared exchange Others Dec 31, 2018
Short-term loans 452,879 3,905,941 - (11,785) - 4,347,035

Dividend payable - (585,755) 614,939 (29,184) - -
Long-term liabilities 2,475,726 (209,420) - (46,045) 5,616 2,225,877
Bonds payable 10,385,873 696,758 - - 11,465 11,094,096
Total liabilities from financing

activities 13,314,478 3,807,524 614,939 (87,014) 17,081 17,667,008
Non-cash changes
Dec 31, Dividends Foreign Dec 31,

2016 Cash flows declared exchange Others 2017
Short-term loans 230,293 252,810 - (30,224) - 452,879

Dividend payable - (867,751) 907,383 (39,632) - -
Long-term liabilities 3,439,109 (820,834) - (148,909) 6,360 2,475,726
Bonds payable 9,772,656 - - - 613,217 10,385,873
Total liabilities from financing

activities 13,442,058 (1,435,775) 907,383 (218,765) 619,577 13,314,478
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Annual Report 2018

47. FINANCIAL ASSETS AND LIABILITIES
a. Financial instruments category and fair value measurements
The following tables present to the Group’s financial assets and liabilities by category:
Financial Assets
Fair value through Avalable- Loans and Held to

profit or loss for-sale receivables maturity Total
December 31, 2018

Cash and cash equivalents - - 9,112,312 - 9,112,312
Restricted cash - - 108,915 - 108,915
Short-term investments 20,534 202,195 2,470 - 225,199
Other investments - net - 80,171 - - 80,171
Long-term investments - 15,991 1,530 532,370 549,891
Trade receivables - - 3,231,106 - 3,231,106
Due from the Government - - 4,758,409 - 4,758,409
Other receivables - - 883,490 - 883,490
Other non-current assets - - 1,149,976 - 1,149,976
Total financial assets 20,534 298,357 19,248,208 532,370 20,099,469
December 31, 2017

Cash and cash equivalents - - 6,409,827 - 6,409,827
Restricted cash - - 119,671 - 119,671
Short-term investments 24,898 208,894 15,490 - 249,282
Other investments - net - 27,328 - - 27,328
Long-term investments - 16,034 1,523 533,309 550,866
Trade receivables - - 2,675,643 - 2,675,643
Due from the Government - - 2,155,739 - 2,155,739
Other receivables - - 875,514 - 875,514
Other non-current assets - - 1,292,628 - 1,292,628
Total financial assets 24,898 252,256 13,546,035 533,309 14,356,498
Other financial Liabilities

Short-term loans (4,347,035) (452,879)

Trade payables (3,676,558) (3,949,398)
Due to the Government (2,002,825) (1,831,245)
Accrued expenses (1,902,515) (1,759,885)
Long-term liabilities (2,225,877) (2,475,726)
Other payables (407,196) (467,742)
Bonds payables (11,094,096) (10,385,873)
Other non-current payables (149,428) (69,812)
Total financial liabilities (25,805,530) (21,392,560)
The Company
The fair value of these financial liabilities is estimated using appropriate valuation techniques with
inputs that are not based on observable market data.
Subsidiaries
The fair value of these financial liabilities is estimated using appropriate valuation techniques with
inputs that are not based on observable market data.
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SECURING ENERGY

47. FINANCIAL ASSETS AND LIABILITIES (continued)
b. Offsetting financial assets and liabilities
The following financial instruments are subject to offsetting, enforceable master netting
arrangements and similar agreement:
Gross amount of Net amount of
recognized financial assets Related amounts not set off in the
financial assets presented in statement of financial position
Gross amount set off in the the statement
of recognized statement of of financial Financial Cash collateral
financial assets financial position position instrument received Net amount
December 31, 2018

Financial Assets
- Trade receivables 3,327,292 (96,186 ) 3,231,106 - - 3,231,106
Financial lliabilities
- Trade payables 3,772,744 (96,186 ) 3,676,558 - - 3,676,558
December 31, 2017

Financial Assets
- Trade receivables 2,736,501 (60,858 ) 2,675,643 - - 2,675,643
Financial liabilities
- Trade payables 4,010,256 (60,858 ) 3,949,398 - - 3,949,398
For financial assets and liabilities subject to enforceable master netting arrangements or similar
arrangements above, each agreement between the Group and the counterparty allows for net
settlement of the relevant financial assets and liabilities when both choose to settle on a net basis.
In the absence of such an election, financial assets and liabilities will be settled on gross basis,
however, each party to the master netting agreement or similar agreement will have the option to
settle all such amounts on a net basis in the event of default of the other party.
48. RISK MANAGEMENT POLICY
The Group has various business activities, which expose it to various potential risks. The Group’s
overall risk management program focuses on minimising potential adverse effects on the financial
performance of the Group.
Risk management is carried out by the Group’s Board of Directors, specifically the Risk Management
Committee (“the Committee”), Risk Management Unit and Risk Taking Unit to identify, assess, mitigate
and monitor the risks of the Group. The Committee provides principles for overall risk management,
including business risk and financial risk.
a. Business risks
The Group’s business activities are exposed to a variety of business risks (upstream and
downstream) which are as follows:
i. The Group is subject to the control of the Government and there is no guarantee that the
Government will always act in the Group’s best interest. The Group also derives certain
benefits from being a state-owned entity, and the Group cannot guarantee that any or all of
these benefits will continue.
ii. The Group is subject to audit by SKK Migas, BPK, DGT and/or the Government. The outcome
of the assessment may result in claims against the Group or reduce claims against the
Government that have already been recognized by the Group.
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48. RISK MANAGEMENT POLICY (continued)
a. Business risks (continued)
The Group’s business activities are exposed to a variety of business risks (upstream and
downstream) which are as follows (continued):
iii. The Group is dependent on joint venture partners and third party independent contractors in
connection with exploration and production operations and to implement the Group’s
development programs.
iv. The Group’s crude oil, natural gas and geothermal reserves estimates are uncertain and may
prove to be inaccurate over time or may not accurately reflect actual reserves levels, or even if
accurate, technical limitations may prevent the Group from retrieving these reserves.
v. The Group is dependent on management’s ability to develop existing reserves, replace
existing reserves and develop additional reserves.
vi. A substantial part of the Group’s revenues is derived from sales of subsidised certain fuel
(BBM) products by the Government.
b. Financial risk
Financial risk includes market, credit and liquidity risks.
i. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market prices.
The market risk factors are as follows:

(i) Foreign exchange risk
Group revenues are determined by the movement of MOPS, which will be paid separately
by the public and the Government of Indonesia in the form of subsidised fuel products and
LPG products.
Regulations in Indonesia require transactions to be made in Rupiah, while most of the
operating costs, particularly for the procurement of crude oil and oil products, are made in
US Dollars, which can lead to foreign exchange risks for cash and cash equivalents, trade
receivables, due from the Government, trade payables, short-term loans, due to the
Government and long-term liabilities.
The Group naturally mitigates foreign exchange risks through the effective management of
its cash flows.
Sensitivity analysis
A strengthening (weakening) of the Rupiah against the US Dollar would have increased
(decreased) equity and profit or loss by the amounts shown below. This analysis is based
on foreign currency exchange rate variances which were considered to be reasonably
possible at the reporting date. The analysis assumes that all other variables, in particular
interest rates, remain constant and excludes any impact on forecasted sales and
purchases.
Strengthening Weakening
Equity Profit or loss Equity Profit or loss
December 31, 2018

IDR (3% movement) 364,017 358,908 (342,813 ) (338,001)
December 31, 2017

IDR (3% movement) 272,198 267,015 (256,342 ) (251,461)
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b. Financial risk (continued)
i. Market risk (continued)
(ii) Commodity price risk
The volatility in prices of crude oil, natural gas and refined products and the uncertainty of
market dynamics for oil and gas could adversely affect the Group’s business, financial
conditions and results of the Group’s operations.
The Group’s profitability is significantly affected by the prices of, and demand for, crude oil,
natural gas and refined products, the difference between the cost price of crude oil, the
costs of exploring for, developing, producing, transporting and selling crude oil, gas and
refined products. The international and domestic markets for crude oil and refined
products are fluctuative, and have recently been characterized by significant price
fluctuations. The fluctuation of the market prices of crude oil, natural gas and refined
products is subject to a variety of factors beyond the Group’s control.
The Group participates in physical commodity contracts in the normal course of business.
These contracts are not derivatives and are measured at cost. In this case, the Group is
not exposed to commodity price risk because the price has been determined at the date of
purchase.
(iii) Cash flow and fair value interest rate risk
The Group is exposed to cash flows and fair value interest rate risk due to its financial
assets and liabilities position, mainly to maintain cash flows in order to meet the needs of
operational and capital expenditure.
Assets and liabilities with floating rates expose the Group to cash flows interest rate risk.
Financial assets and liabilities with fixed rates expose the Group to fair value interest rate
risk.
The Group has established a centralised treasury and continuously monitors movements
of LIBOR, SIBOR, JIBOR and other borrowing rates prevailing in the market and conducts
negotiations to get the most competitive interest rates before making placement of funds
or conducts negotiation with lenders if the borrowing rates become uncompetitive
compared to prevailing rates in the market.
The Group may use loan facilities provided by national banks such as BNI, BRI, Bank
Mandiri, as well as foreign private banks.
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(iii) Cash flow and fair value interest rate risk (continued)
At the reporting date, the Group’s financial assets and liabilities with floating rates, fixed
rates and those that were non-interest bearing were as follows:
December 31, 2018
Floating rate Fixed rate
Maturity Maturity Maturity Maturity

less than more than less than more than Non-interest
one year one year one year one year bearing Total
Assets
Cash and cash
equivalents 5,045,495 - 4,062,697 - 4,120 9,112,312
Restricted cash 21,344 - 87,571 - - 108,915
Short-term investments 677 - 132,430 - 92,092 225,199
Trade receivables - - - - 3,231,106 3,231,106
Due from the Government - - - - 4,758,409 4,758,409
Other receivables - - - - 883,490 883,490
Other investments - - - - 80,171 80,171
Long-term investments - 391,307 - 14,989 143,595 549,891
Other non-current assets - - - - 1,149,976 1,149,976
Total financial assets 5,067,516 391,307 4,282,698 14,989 10,342,959 20,099,469
Liabilities
Short-term loans (4,347,035 ) - - - - (4,347,035 )
Trade payables - - - - (3,676,558 ) (3,676,558 )
Due to the Government - - (25,247 ) (795,082 ) (1,182,496 ) (2,002,825 )
Accrued expenses - - - - (1,902,515 ) (1,902,515 )
Other payables - - - - (407,196 ) (407,196 )
Long-term liabilities (361,855 ) (1,703,996) (58,722) (101,304 ) - (2,225,877 )
Bonds payable - - - (11,094,096) - (11,094,096 )
Other non-current
payables - - - - (149,428 ) (149,428 )
Total financial liabilities (4,708,890 ) (1,703,996) (83,969 ) (11,990,482) (7,318,193 ) (25,805,530 )
December 31, 2017
Floating rate Fixed rate
Maturity Maturity Maturity Maturity

less than more than less than more than Non-interest
one year one year one year one year bearing Total
Assets
Cash and cash
equivalents 2,770,228 - 3,631,425 - 8,174 6,409,827
Restricted cash 75,243 - 44,428 - - 119,671
Short-term investments 755 - 150,699 - 97,828 249,282
Trade receivables - - - - 2,675,643 2,675,643
Due from the Government - - - - 2,155,739 2,155,739
Other receivables - - - - 875,514 875,514
Other investments - - - - 27,328 27,328
Long-term investments - 391,307 - 20,268 139,291 550,866
Other assets - - - - 1,292,628 1,292,628
Total financial assets 2,846,226 391,307 3,826,552 20,268 7,272,145 14,356,498
Liabilities
Short-term loans (452,879 ) - - - - (452,879 )
Trade payables - - - - (3,949,398 ) (3,949,398 )
Due to the Government - - (24,680 ) (780,626 ) (1,025,939 ) (1,831,245 )
Accrued expenses - - - - (1,759,885 ) (1,759,885 )
Other payables - - - - (467,742 ) (467,742 )
Long-term liabilities (315,951 ) (1,952,671) (50,008 ) (157,096 ) - (2,475,726 )
Bonds payable - - - (10,385,873) - (10,385,873 )
Other non-current
payables - (5,083) - - (64,729 ) (69,812 )
Total financial liabilities (768,830 ) (1,957,754) (74,688 ) (11,323,595) (7,267,693 ) (21,392,560 )
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(iii) Cash flow and fair value interest risk (continued)
A change of 30 basis points in floating interest rates at the reporting date would have
affected income before tax by the amounts shown below. This analysis assumed that all
other variables, in particular foreign currency rates, remain constant.
Effect in: +30 bp increase -30 bp decrease

Income before tax (2,865) 2,865
Cash flows sensitivity - net (2,865) 2,865
ii. Credit risk
The Group has significant credit risk from unpaid receivables, cash and cash equivalents and
investments in debt securities. In most transactions, the Group uses banks and financial
institutions that are independently assessed with a rating of AAA, AA+, AA, AA-, A+, A and A-.
For the Group’s credit sales, the Group applied a standard operating procedure for credit
approval mechanism. With such practice, some portion of the Group’s credit sales has been
secured with a collateral/bank guarantee. For other credit sales without collateral/bank
guarantee, the Group ensured that credit scoring, credit limit evaluation and credit approval
were performed and provided prior to any sales to the customer.
The Group also has a Credit Management System to monitor the usage of credit limits and
automatic blocking facility in the case of no payment starting from seven days after the
maturity date. The Group will impose penalties for overdue payments in some sales contracts
based on the result of each customer’s credit evaluation.
(i) Third parties and related parties
Financial assets neither past due nor impaired
The credit quality of the Group’s financial assets that are neither past due nor impaired,
was assessed by referencing external credit ratings PT Pemeringkat Efek Indonesia
(Pefindo) or to historical information about counterparty default risk rates, as follows:

Rated
Rating AAA 7,285,583 5,654,816
Rating AA+ 1,139,349 426,347
Rating AA 50,028 26,770
Rating AA- 3,528 2,581
Rating A+ 1,381 31,699
Rating A 20,380 147,282
Rating A- 21,472 -
Not rated 590,591 120,332
Total 9,112,312 6,409,827
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ii. Credit risk (continued)
(i) Third parties and related parties (continued)
Financial assets neither past due nor impaired (continued)
Restricted cash
Rated
Rating AAA 104,230 107,688
Rating A+ - 5
Rating A - 224
Rating A- 462 -
Not rated 4,223 11,754
Total 108,915 119,671
Short-term investments
Rated
Rating AAA 25,332 19,022
Rating AA+ 1,027 1,145
Rating AA 4,109 10,108
Rating AA- 3,129 3,085
Rating A 5,357 3,522
Rating A- 2,330 749
Rating BBB+ - 1,870
Rating BBB 3,887 -
Rating BBB- 41,948 44,149
Not rated 138,080 165,632
Total 225,199 249,282
Long-term investments
Rated
Rating AAA 2,597 7,198
Rating AA 5,897 6,320
Rating BBB- 4,950 4,950
Not rated 552 221
Total 13,996 18,689
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Trade receivables
Third parties
> US$10,000 - Good credit history 1,335,703 945,008
< US$10,000 362 726
Related parties 675,922 251,453
Total 2,011,987 1,197,187
Other receivables
Third parties
> US$10,000 – Good credit history 661,979 570,683
< US$10,000 31 82
Total 810,787 824,154
Other assets
Third parties 80,287 152,791
Total 134,515 233,140
Financial assets that are past due but not impaired
Trade receivables
- Less than 3 months 431,868 227,439
- 3 - 6 months 61,194 212,778
- 6 - 12 months 21,138 10,231
- 12 - 24 months 11,040 1,201
- > 24 months 11,561 2,194
Total 536,801 453,843
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Other receivables
Third parties
- Less than 3 months 42,912 31,832
- 3 - 6 months 1,699 642
- 6 - 12 months 872 160
- 12 - 24 months 10,674 524
- > 24 months 5,476 921
Sub-total 61,633 34,079
Related parties
- Less than 3 months 9 141
- 3-6 months 7 2
- 6 - 12 months 49 1,332
- 12 - 24 months 15 68
- > 24 months 24 11
Sub-total 104 1,554
Total 61,737 35,633
Other assets
Third parties - 90,995
Related parties 10,679 -
Total 10,679 90,995
Trade receivables
Trade receivables from third parties and related parties that are past due but not impaired
at the reporting date relate to customers who have not had defaults in the past two years.
Some of the accounts receivables from these customers have also been secured with
collateral/bank guarantee.
As of December 31, 2018, trade receivables past due between 12-24 months and more
than 24 months mainly came from PT Asuransi Jasa Indonesia (Persero) totaling to
US$3,196.
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Financial assets that are impaired
Trade receivables
- Current 453,510 731,355
- Less than 3 months 182,954 179,382
- 3 - 6 months 70,803 81,009
- 6 - 12 months 10,541 26,250
- 12 - 24 months 45,159 69,412
- > 24 months 180,082 195,558
943,049 1,282,966
Impairment (260,731) (258,353)
Net 682,318 1,024,613
Other receivables
Related parties
- Less than 3 months - 110
- 3 - 6 months - 31
- 6 - 12 months 297 1
- 12 - 24 months - 1
- > 24 months 1,426 1,434
1,723 1,577
Third parties
- Less than 3 months 6,169 5,651
- 3 - 6 months 673 4,613
- 6 - 12 months 975 6,734
- 12 - 24 months 8,362 4,112
- > 24 months 12,631 13,057
28,810 34,167
30,533 35,744
Impairment (19,567) (20,017)
Net 10,966 15,727
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Financial assets that are impaired (continued)
Other assets
Related parties
- > 24 months 18,190 19,394
Third parties
- 0-12 months 9,165 -
- 12-24 months - 17,023
27,355 36,417
Impairment (27,355) (36,417)
Net - -
Trade receivables
Trade accounts receivable from third parties and related parties as of December 31, 2018
amounting to US$3,491,837 (2017: US$2,933,996) has been impaired amounting to
US$260,731 (2017: US$258,353), with the trade receivables mainly derived from the
Government institutions and MoSOE, which is TNI/Kemhan amounting to US$318,142
(Note 41a).
Other receivables
Other receivables from third parties and related parties as of December 31, 2018 and
2017 amounting to US$903,057 and US$895,531 have been impaired by US$19,567 and
US$20,017, respectively.
ii. Government
Financial assets neither past due nor impaired
The Company
Receivables from recognition of
Disparity of Selling Price 2,924,148 -
Receivable from subsidy reimbursements
for 3 kg LPG cylinders 1,147,538 1,404,911
Receivable from subsidy reimbursements for
certain fuel (BBM) pruducts 175,556 473,928
Receivables from kerosene subsidies
reimbursement 16,828 -
Receivables from marketing fees 72,489 49,902
Receivables from kerosene conversion 10,626 -
Other receivables - 102
Sub-total 4,347,185 1,928,843

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ii. Government (continued)
Subsidiaries:
PEP
- DMO fees 106,398 90,930
PHE
- DMO fees 15,414 25,859
PEPC
PHI
- DMO fees 18,780 -
Sub-total 411,224 337,832
Total 4,758,409 2,266,675
Financial assets that are impaired
The Company:
Provision for impairment - (110,936)
Total 4,758,409 2,155,739
iii. Liquidity risk
The amount of liquidity which the Group requires for its operations is uncertain and its
operations may be adversely affected if the Group does not have sufficient working capital to
meet its cash and operational requirements. This may occur as a result of, amongst other
reasons, delays in the payment of the Government’s subsidies.
The Group uses significant amounts of cash in its operations, especially to procure
commodities and raw materials. In particular, one of its principal operating costs is the
acquisition of feedstock for its refineries. Fluctuations in market prices for crude oil, natural gas
and their refined products and fluctuations in exchange rates cause working capital and costs
for the Group’s upstream and downstream operations to be uncertain.
The Group funds its operations principally through cash flows from operations, a significant
portion of which comprises sales, subsidy payments, working capital facilities (including bank
overdrafts, L/C and revolving credit), and long-term bank loans. In accordance with the terms
of PSO’s assignment, the Group is required to submit its claims for subsidy to the Government
at the end of each month for the subsidised fuel distributed in that month.
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iii. Liquidity risk (continued)
As of December 31, 2018, and 2017 the Group has cash and cash equivalents in the amount
of US$9,112,312 and US$6,409,827 respectively (Note 6). The Group manages liquidity risk
by continuously monitoring forecasts and actual cash flows and matching the maturity profiles
of trade receivables and trade payables.
The table below summarizes the maturity profile of the Group’s financial liabilities based on
cash flow on contractual undiscounted payments:
Later than
1 year but
Less than not later than Later than
1 year 5 years 5 years Total
December 31, 2018

Short-term loans 4,347,035 - - 4,347,035
Trade payables 3,676,558 - - 3,676,558
Due to the Government 1,211,056 262,428 531,845 2,005,329
Accrued expenses 1,902,515 - - 1,902,515
Other payables 1,257,437 - - 1,257,437
Long-term liabilities 456,506 1,530,224 343,001 2,329,731
Bonds payables 611,409 5,886,768 14,088,112 20,586,289
Other non-current payables - 120,591 58,314 178,905
Total 13,462,516 7,800,011 15,021,272 36,283,799
December 31, 2017

Short-term loans 452,879 - - 452,879
Trade payables 3,949,398 - - 3,949,398
Due to the Government 1,138,463 255,460 437,644 1,831,567
Accrued expenses 1,759,885 - - 1,759,885
Other payables 1,178,119 - - 1,178,119
Long-term liabilities 394,188 1,293,419 844,763 2,532,370
Bonds payables 575,969 4,625,314 14,773,197 19,974,480
Other non-current payables - 84,373 - 84,373
Total 9,448,901 6,258,566 16,055,604 31,763,071
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c. Capital management
The Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the business. Capital consists of share
capital, retained earnings, non-controlling interests and other equity components. The Board of
Directors ensures the return on capital as well as the level of dividends.
The Group as an entity, whose main business involves oil and gas, monitors capital on the basis of
the debt-to-equity ratio. Net debt is calculated as total interest bearing borrowings including short-
term and long-term, while total capital is calculated from equity in the statement of consolidated
financial position. Weighted average interest expense on interest-bearing borrowings (excluding
liabilities with imputed interest) for December 31, 2018 and 2017 were 5.17%, and 4.92%,
respectively.
The Group’s debt to equity ratio at the reporting date is as follows:
Total liabilities (interest bearing) 18,487,337 13,707,878

Total equity attributable to owners of the parent 27,598,721 25,124,718
Debt-to-equity ratio 66.99% 54.56%
Total own capital to total assets ratio* 40.31% 37.85%
Return-on-equity ratio* 10.08% 12.62%
* Based on definition as required in KEP-100/MBU/2002
d. Fair value
The following are the Group’s financial assets that were measured at fair value at December 31,
2018:
Level 1 Level 2 Level 3 Total
Financial assets
Short-term investments 177,758 46,764 677 225,199
Other investments - net - - 80,171 80,171
Total financial assets 177,758 46,764 80,848 305,370
As of December 31, 2018, there were no transfers of fair value measurement between Level 1,
Level 2 and Level 3.
The table below shows the carrying amounts and fair values of long-term financial liabilities as of
December 31, 2018 and 2017:
Carrying amount Fair value
December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017
Long-term liabilities (Note 20) 2,225,877 2,475,726 2,329,464 2,478,169

Bonds payable (Note 21) 11,094,096 10,385,873 11,101,427 11,504,854
Total financial assets 13,319,973 12,861,599 13,430,891 13,983,023
The fair value of long-term liabilities is measured using the discounted cash flows based on the
interest rate on the latest long-term liabilities of the Company. The fair value of bonds payable is
determined by reference to market price at the reporting date.
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49. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES
a. Cooperation contract commitment
In accordance with the Cooperation Contract, PT Pertamina EP shall relinquish minimum of 10%
of the original contract area to the Government on or before the end of the tenth year from the
effective date of the Cooperation Contract. On July 18, 2013, PT Pertamina EP relinquished
18.02% of initial working area to the Government.
PT Pertamina EP is required to pay a bonus to the Government amounting to US$1,500 in 30 days

after cumulative production of oil and gas reaches 1,500 MMBOE from the effective date of the
Cooperation Contract.
PT Pertamina EP's cumulative production of oil and gas up to December 31, 2018 has not yet
reached 1,500 MMBOE.
On December 31, 2018, PT Pertamina Hulu Energi had 15 exploration commitments in relation to
PSC profit sharing contracts with commitments between US$11,750 to US$225,000 and 10
exploration commitments in relation to the Gross Split contract with a commitment amounting to
US$15,550 to US$239,300.
PT Pertamina Hulu Indonesia has expenditure commitments and work plans with a commitment
value between US$141,300 to US$703,000 with a period of six years from the effective date of the
contract.
b. Capital commitments
The Group has capital expenditure commitments in the normal course of business. As of
December 31, 2018, the Group’s unrealized total outstanding capital expenditure commitments
amounting to US$1,341,378.
c. Operating lease commitments - Group as lessee
Non-cancellable operating lease payments are as follows:
Less than one year 493,867 465,882

Between one to five years 559,313 571,611
Total 1,086,464 1,061,653
The Group leases a number of vessels, office buildings, vehicles and IT facilities under operating
leases. The leases typically run for a period of ten years, with an option to renew the lease.
On December 31, 2018 and 2017, operational expenses related to leases amounting to
US$343,868 and US$782,362, respectively (Notes 32, 36, and 37).
d. Gas sale and purchase agreement
As of December 31, 2018, the Company through PT Pertamina EP has commitments to deliver
gas amounting to 695,419 MMSCF to various customers. The gas will be periodically delivered
from 2017 until 2027.
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49. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES (continued)
d. Gas sale and purchase agreement (continued)
As of December 31, 2018, the Company, through PHE, has various significant gas supply
agreements with various customers, with gas value of each contract between 0.8 TBTU to 1.418
TBTU. The expiration of these agreements ranges from 2019 until 2031.
As of December 31, 2018, the Company, through PHI, has significant gas sale and purchase
agreement contracts, with variuos costumers, with gas volumes of 0.8 TBTU up to 183.13 TBTU.
These contracts will expired in 2018 to 2022.
As of December 31, 2018, the Company, through PGN has 37 Gas Sales and Purchase
Agreements (“GSA”) with working areas in Sumatra, Java and Kalimantan with contract periods of
10 - 30 years. The effective year of the agreement ranges from 2002 to 2018 and the year ends of
the agreement ranges from 2019 to 2037.
Based on Indonesian Presidential Regulation No. 40 year 2016 on Natural Gas Pricing and
Regulation of the Minister of Energy and Mineral Resources of the Republic of Indonesia No. 40
year 2016 on Natural Gas Price for Specific Industries, the Company amended contract gas prices
decline in gas sales agreements with the particular industry effective January 30, 2017.
e. LNG long-term purchase contract commitment
The company signed a Long-Term LNG Purchase Contract with several sellers for LNG trading
business, with minimum purchase quantity per annum of each contract of between 0.1 million MT
to 1.5 million MT, with purchase prices linked to the related market prices at the time of delivery of
LNG. The term of those contract ranges from 2018 until 2044.
f. Transfer agreement of 10% participating interest ("PI") in the ONWJ Block PSC
On December 19, 2017, PT PHE ONWJ and PT Migas Hulu Jabar ONWJ ("MUJ ONWJ") signed a
10% PI transfer agreement at Blok ONWJ PSC from PT PHE ONWJ to PT Migas Hulu Jabar
ONWJ. The agreement is effective on the date of receipt of approval from the Minister of Energy
and Mineral Resources or on the date stipulated by the Minister of Energy and Mineral Resources
in his approval letter.
On May 17, 2018, the approval 10% of PI transfer in the ONWJ working area has been approved
by the Minister of Energy and Mineral Resources through a Letter from the Minister of Energy and
Mineral Resources to the Head of SKK Migas No. 2803/13/MEM.M/2018. Stated in the letter, the
date of the transfer of PHE ONWJ to MUJ ONWJ is from the effective date of the Block ONWJ
PSC.
On December 17, 2018, the PI transfer value was determined through a Letter from the Minister of
Energy and Mineral Resources to the Head of SKK Migas No. 3149/12/MEM.M/2018. The transfer
value is calculated from the BUMD's liability for the portion of the implementation guarantee
(Performance Bond) for the implementation of a definite work commitment and the portion of the
unrecovered cost payment by the new KKS Contractor to the old KKS Contractor with a value of
US$43,292.
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g. Legal case
i. PT Golden Spike Energy Indonesia (“GSEI”) lawsuit
PT Golden Spike Energy Indonesia (“GSEI”) and PT Pertamina Hulu Energi Raja Tempirai
(“PHE RT”) are holders of 50% participating interests each in the Raja Block PSC.
On April 5, 2013, GSEI submitted a civil lawsuit against PHE RT in the Central Jakarta District
Court on the basis that operations conducted during the exploration period were GSEI’s Sole
Risk Operations and therefore only GSEI was entitled to receive compensation.
The court, objection, cessation and arbitration processes have been finalized. On February 17,
2017, the ICC Arbitration has issued the third and final award which decided the case in favor
of PHE RT.
Such ICC’s third and final award has been registered and received by the Central Jakarta
District Court based on the Deed No. 02/Pdt/Arb-Int/2017/PN.Jkt.Pst dated June 14, 2017.
Furthermore, to execute the Third and Final Award above, PHE RT has submitted an
executive application to the Central Jakarta District Court on December 13, 2017 and has
been responded in 2018.
As of the date of these consolidated financial statements, PHE RT is in the process of

‘aanmaning’ to the Central Jakarta District Court.
ii. PT Bakrie Harper Corporation lawsuit
On November 20, 1996, the Company entered into a Build and Rent Agreement in the form of
Development, Operation, Lease and Maintenance of Piping Kertapati-Jambi ("Pipeline Project
Work") No.SPB-1474A/C000/96 with PT Bakrie Harper (formerly PT Bakrie Harper
Corporation - "Bakrie"). Total Pipeline Project Work Value and Rental fee was US$144,068
and US$16,703 (excluding VAT), respectively. The lease term for such project is 10 years with
commencement date of the project development on May 19, 1997.
Due to the monetary crisis in 1998, the Company delay the Pipeline Project Work and
renegotiated the project value. In 2001, both parties agreed to appoint Deloitte Touche
("Deloitte") as an independent party to audit fair market costs of the Pipeline Project Works.
Based on the Deloitte audit report issued in 2001, fair market costs and rental costs were
US$92,125 and US$7,616 respectively.
On August 27, 2002, Pertamina appointed the BPKP to perform due diligence to obtain the fair
market value of the costs incurred by Bakrie for such project from commencement date of
through the date when the project development ceased. Based on the BPKP’s report issued
on December 23, 2003, it is noted that the physical progress of the Pipeline Project Work was
10.6853% with a fair value of US$15,394 exclude the compensation for investment costs
incurred. BPKP also noted that the Pipeline Project Work is no longer economics and feasible
to continue.
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g. Legal case (continued)
ii. PT Bakrie Harper Corporation lawsuit (continued)

On June 9, 2017, both parties agreed to settle the case through the Indonesian National
Arbitration Board ("BANI"). The amount claimed by Bakrie is US$15,394 for physical progress
work and US$17,307 for 14 years of interest. Based on BANI decision No. 969/VIII/ARB-
BANI/2017 dated February 21, 2018, it is noted that the Pipeline Project Work agreement is
already expired, the physical progress of the Pipeline Project Work is 10.6853% and the
Company should pay to Bakrie the amount of US$15,856, which consists of compensation and
total interest to Bakrie amounting to US$15,394 and US$462, respectively.
On April 16, 2018, the Company appointed the Attorney General's Office of the Republic of
Indonesia ("Jamdatun") to provide legal assistance and to propose Legal action related to
BANI decision. The Company is willing to settle BANI decision with condition that the payment
made by the Company is based on BPK report and should be supported by adequate
documents, including land rights with value equal to the payment will be made by the
Company. The cancellation claim has been submitted by Jamdatun through the Central
Jakarta District Court but was refused. Based on the advice of the State Attorney, in the event
that Bakrie submitted an attempt to execute the BANI verdict, the Company has the option to
file a lawsuit against the execution.
h. Onerous contract
The PSO assignment to supply fuel products

The Company has a relationship with the Government for the assignment of PSO to supply certain
fuel products. The Company and the Government agreed to use Mean of Platts Singapore
("MOPS") as the basis for the market price of fuel projects use to calculate the amount of
subsidies. However, the retail selling price of certain fuel products issued by the Ministry of Energy
and Mineral Resources during 2017 and 2018 cannot cover all costs for procuring and distributing
fuel products which resulted losses from the sale of PSO fuel products for the years ended
December 31, 2018 and 2017.
50. EVENTS AFTER THE REPORTING PERIOD
a. Addendum to the agreement on the transfer and management of the ONWJ Block PSC
On February 6, 2019, PHE ONWJ and MUJ ONWJ have signed an addendum on the transfer
agreement and management of 10% at ONWJ PSC. Where the accumulation of net profit-
sharing and liability of a 10% PI transfer MUJ ONWJ from January 19, 2017 to December 31,
2018 is US$ 16,302,702 (full amount). Settlement of such obligations was completed on
February 8, 2019.
Starting from the date of the transfer, payments of MUJ ONWJ’s share of the production will be
made on a monthly basis by PHE ONWJ after deducting MUJ ONWJ’s share of the ONWJ PSC’s
operating costs and other obligations in accordance with the PSC.
In the event MUJ ONWJ’s share of production in the current month is insufficient to cover for MUJ
ONWJ’s share of operating costs, the cumulative underpayment will be carried over to the
following months.
To ensure MUJ ONWJ’s revenue, the production sharing and operating costs sharing with MUJ
ONWJ is calculated based on provisional percentage for a full year, in accordance with the
attachment to the addendum to the agreement. In the event in any year the cumulative operating
costs which is payable by MUJ ONWJ to PHE ONWJ exceeds MUJ ONWJ’s share of production,
PHE ONWJ will pay US$1 (full amount) for each month in the following year.
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50. EVENTS AFTER THE BALANCE SHEET DATE (continued)
b. PSC gross split Maratua Block

On February 18, 2019, PHE Lepas Pantai Bunyu signed the Maratua Block Gross Split PSC for a
contract period of 30 years, which became effective from the date of the signing of such PSC.
c. Withdrawal of short-term bank loan facilities

On October 31, 2018, PGN with PT Bank Sumitomo Mitsui Indonesia extended the Cash Loan
facility agreement of US$120,000,000 (full amount). This facility will mature on October 31, 2019.
On March 4, 2019, PGN has withdrawn this facility in the amount of US$120,000,000 (full amount)
with an interest rate of 3-Month LIBOR plus spread.
d. Changes in the composition of the Board of Commissioners
Based on the decision of the GMS No. SK-86/MBU/04/2019 dated April 30, 2019, Gatot Trihargo
has been appointed as the new Commissioner of PT Pertamina (Persero). Based on the same
GMS decision, Sahala Lumban Gaol and Ahmad Bambang were honorably dismissed from their
respective positions as Pertamina's Board of Commissioners. Thus, the composition of the Board
of Commissioners is as follows:
President Commissioner Tanri Abeng
Vice President Commissioner Arcandra Tahar
Commissioner Alexander Lay
Commissioner Ego Syahrial
Commissioner Gatot Trihargo
Commissioner Suahasil.Nazara
51. RESTATEMENT AND REISSUANCE OF CONSOLIDATED FINANCIAL STATEMENTS
The Company restated and reissued the consolidated financial statements of the Group as of
December 31, 2018 and for the year then ended in connection with updating disclosures and basis for
recording recognition of revenue and due from Government for the Company’s revenue shortfall from
the disparity of selling price of specific fuel type assignment (“JBKP”) Premium outside Jawa, Madura,
and Bali areas (“Non Jamali”) in 2018, which disclosed and confirmed the basis to record such
transactions based on: (i) audit results report of the Audit Board of the Republic of Indonesia (BPK RI)
No. 31/AUDITAMA VII/PDTT/05/2019 dated May 20, 2019, which was received by the Company on
May 23, 2019 (“BPK Audit Results”), and (ii) letter of MoF of the Republic of Indonesia No. S-
430/MK.02/2019 dated May 28, 2019, which was received by the Company on May 28, 2019 (“MoF
Letter”), as required by Article 10 of Presidential Regulation No. 43 Year 2018 concerning “The
Amendment to Presidential Regulation No. 191 Year 2014 concerning Provisioning, Distribution and
Retail Price of Oil Fuel” and the Company’s related accounting policies based on Indonesian Financial
Accounting Standards. Prior to the restatement and reissuance of such consolidated financial
statements, the recognition of the revenue and due from Government on the shortfall in revenues
originating from the disparity of formula retail selling price and stipulated retail selling price of specific
fuel type assignment (“JBKP”) Premium Non Jamali was made prior to BPK Audit Results and MoF
Letter. Such recognition was made based on: (i) letter of BPK RI No. 126/S/XX/05/2019 concerning the
submission of the draft of audit report with specific purposes on the sales and distribution of fuel oil
and 3kg LPG cylinder, and subsidized calculation of JBT diesel oil and 3kg LPG cylinder in 2018 to PT
Pertamina (Persero), PT AKR Corporindo Tbk, and other related agencies dated May 17, 2019, and (ii)
letter of MoSOE of the Republic of Indonesia No. SR-330/MBU/05/2019 dated May 17, 2019
concerning the bookkeeping of the disparity in retail selling price of JBT and JBKP Non Jamali and the
shortfall in of revenue from JBT Kerosene with the value in accordance with the draft of the BPK audit
report (refer to Note 9a).
155
367
SECURING ENERGY
SUPPLEMENTARY FINANCIAL INFORMATION
The following information is the separate financial statements of PT Pertamina (Persero), a Parent
Entity, which is presented as supplementary information to the consolidated financial statements of
PT Pertamina (Persero) and its Subsidiaries as of December 31, 2018 and for the year then
ended.
PT PERTAMINA (PERSERO)
PARENT ENTITY
STATEMENT OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS
Cash and cash equivalents 4,567,089 2,612,796
Restricted cash 3,344 12,590
Trade receivables
Related parties 3,507,946 2,866,739
Third parties 1,474,122 626,361
Due from the Government 1,423,038 1,154,793
Other receivables
Inventories 5,984,287 5,730,428
Prepaid taxes - current portion 386,989 418,255
Prepayments and advances 250,272 159,458
Other investments 80,171 27,328
Total Current Assets 17,762,788 13,656,806
NON-CURRENT ASSETS
Deferred tax assets 1,166,255 996,527
Long-term investments 19,217,870 16,896,906
Fixed assets 8,494,968 8,183,446
Due from the Government 2,924,148 663,114
Prepaid taxes - net of current portion 117,803 164,266
Other non-current assets 3,085,624 3,540,800
Total Non-current Assets 35,006,668 30,445,059
TOTAL ASSETS 52,769,456 44,101,865
156
368
Annual Report 2018
PARENT ENTITY
STATEMENT OF FINANCIAL POSITION (continued)
LIABILITIES
Short-term loans 4,247,006 255,268
Trade payables
Related parties 3,492,122 2,765,645
Third parties 2,545,617 3,102,747
Due to the Government - current portion 1,010,478 965,099
Taxes payable
Income taxes 19,684 -
Other taxes 148,429 151,877
Accrued expenses 590,664 589,937
Long-term liabilities - current portion 388,426 322,562
Bonds payable
Other payables
Deferred revenues - current portion 5,545 3,177
Total Short-term Liabilities 13,061,392 8,575,720
Due to the Government - net of current portion 341,659 304,128
Long-term liabilities - net of current portion 895,214 1,350,300
Bonds payable 9,197,526 8,498,447
Employee benefit liabilities 1,542,931 1,921,710
Deferred revenues - net of current portion 31,044 36,976
Other non-current payables 100,969 94,445
Total Long-term Liabilities 12,109,343 12,206,006
TOTAL LIABILITIES 25,170,735 20,781,726
157
369
SECURING ENERGY
PARENT ENTITY
STATEMENT OF FINANCIAL POSITION (continued)
EQUITY
Share capital
Authorized – 600,000,000 (2018)
and 200,000,000 (2017)
ordinary shares at par
value of Rp1,000,000
(full amount) per share;
171,227,044 shares (2018),
133,090,697 shares (2017) 16,191,204 13,417,047
Additional paid-in capital (924,296) 2,736
Government contributed
assets pending final
clarification of status 401,120 1,361
Other equity components 607,564 487,699
Retained earnings
Appropriated - 8,796,357 6,871,101
Unappropriated - 2,526,772 2,540,195
TOTAL EQUITY 27,598,721 23,320,139
TOTAL LIABILITIES AND EQUITY 52,769,456 44,101,865
158
370
Annual Report 2018
PARENT ENTITY
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Year Ended
December 31, 2018
(Expressed in thousands of US Dollars, unless otherwise stated)
2018 2017
Sales and other operating
revenues
Domestic sales of crude oil,
natural gas, geothermal
energy and oil products 35,665,976 32,201,911
Subsidy reimbursements
from the Government 5,632,468 3,572,084
natural gas and oil products 1,673,026 911,370
Marketing fees 15,432 25,474
Revenues from other
operating activities 3,211,117 109,283

OPERATING REVENUES 46,198,019 36,820,122
Cost of sales and other

direct costs
Cost of goods sold (44,315,959) (33,233,974)
Exploration costs - (619)
TOTAL COST OF SALES

AND OTHER DIRECT COSTS (44,315,959) (33,234,593)
GROSS PROFIT 1,882,060 3,585,529
Selling and marketing expenses (1,794,514) (1,697,105)

General and administrative expenses (719,478) (959,451)
Gain on foreign exchange - net 9,234 40,367
Finance income 149,244 148,704
Finance costs (433,646) (341,217)
Share in net profit of
associates and joint ventures 3,387,233 2,014,816
Other expenses - net 249,910 (497,780)
847,983 (1,291,666)
159
371
SECURING ENERGY
PARENT ENTITY
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (continued)
2018 2017
Income tax (expense)/benefit

Current tax (372,999) (289,507)
Deferred tax 169,728 535,839
Income tax (expense)/benefit - net (203,271) 246,332
INCOME FOR THE YEAR 2,526,772 2,540,195
OTHER COMPREHENSIVE
INCOME/(LOSS)
Item not to be reclassified to
profit or loss in subsequent
periods (net of tax):
Remeasurement of net defined
benefit liability 234,631 (122,732)
Items to be reclassified to
profit or loss in subsequent
periods (net of tax):
Foreign exchange difference
statements in foreign currency (59,338) 1,345
income of associates (69,138) (55,532)
OTHER COMPREHENSIVE
INCOME/(LOSS), NET OF TAX 106,155 (176,919)
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR 2,632,927 2,363,276
160
372
Annual Report 2018
The original financial statements included herein are in the Indonesian language
PARENT ENTITY
STATEMENT OF CHANGES IN EQUITY

Government
contributed Difference
assets arising from
Issued Additional pending final translation of
and paid-up paid-in clarification financial Other
capital capital of status statements equity A
Balance as of January 1, 2017/
December 31, 2016 (as restated) 13,417,047 2,736 1,361 (304,201) 968,818
Differences arising from translation of

financial statements - - - 1,225 -
Other comprehensive income from associate - - - - (55,421 )
Remeasurement of net defined benefit liability - - - - (122,722 )
Dividends declared - - - - -
Appropriation of other reserves - - - - -
Profit for the year - - - - -

Balance as of December 31, 2017
(as restated) 13,417,047 2,736 1,361 (302,976) 790,675
161
373
SECURING ENERGY
Annual Report 2018

PARENT ENTITY
STATEMENT OF CHANGES IN EQUITY
Government
contributed Difference
assets arising from
Issued Additional pending final translation of Retained earnings
and paid-up paid-in clarification financial Other
capital capital of status statements equity Appropriated Unappropriated Total equity
Balance as of January 1, 2018/
December 31, 2017 13,417,047 2,736 1,361 (302,976) 790,675 6,871,101 2,540,195 23,320,139
Changes in ownership in PT Asuransi Tugu
Pratama Indonesia Tbk and
PT Pertamina Internasional Eksplorasi
dan Produksi - - - - 13,710 - - 13,710
Capitalization of advance for share issuance 2,774,157 (927,032) - - - - - 1,847,125
Government contributed assets pending
final clarification of status - - 399,759 - - - - 399,759
Differences arising from translation of
financial statements - - - (59,338) - - - (59,338)
Other comprehensive income from associate - - - - (69,138 ) - - (69,138)
Remeasurement of net defined benefit liability, net - - - - 234,631 - - 234,631
Dividends declared - - - - - - (614,939 ) (614,939)
Appropriation of other reserves - - - - - 1,925,256 (1,925,256 ) -
Profit for the year - - - - - - 2,526,772 2,526,772
Balance as of December 31, 2018 16,191,204 (924,296) 401,120 (362,314) 969,878 8,796,357 2,526,772 27,598,721
374
162
PARENT ENTITY
STATEMENT OF CASH FLOWS
2018 2017
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts from customers 41,733,757 32,578,919
Cash receipts from Government 6,224,744 3,299,858
Cash receipts from tax restitution 154,758 514,062
Payments to suppliers (37,264,381) (26,634,755)
Payments to the Government (10,521,957) (6,996,514)
Payments of corporate income taxes (349,514) (333,439)
Cash paid to employees
and management (594,693) (757,916)
Placements from restricted cash (1,735) (132,512)
Receipts of interest 123,409 126,808
Net cash (used in) provided by

operating activities (495,612) 1,664,511
CASH FLOWS FROM INVESTING

ACTIVITIES
Proceeds from disposal of
long-term investments 708,365 15,808
Dividends received from
associates 421,950 266,513
Purchases of fixed assets (594,108) (151,550)
Placements in long-term
investments (1,171,616) (1,195,112)
Cash received from
other investments - 275,567
Interest received from investments - 6,303
Placements in short-term
investments - (17)
Payments for exploration
and evaluation assets - (1,455)
Net cash used in

investing activities (635,409) (783,943)
163
375
SECURING ENERGY
PARENT ENTITY
STATEMENT OF CASH FLOWS (continued)
For the years ended

December 31,
2018 2017
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from short-term loans 8,100,439 2,543,456
Proceeds from bonds issuance 734,407 -
Repayments of short-term loan (4,108,701) (2,288,188)
Repayments of long-term loan (585,755) (867,751)
Dividend payments (341,349) (944,502)
Payments of finance costs (516,893) (523,146)
Repayments of bonds (37,649) -
Proceeds from long-term loans - 428,403
Net cash provided by (used in)

financing activities 3,244,499 (1,651,728)
NET INCREASE (DECREASE) IN

CASH AND CASH EQUIVALENTS 2,113,478 (771,160)
Effects of exchange rate changes

on cash and cash equivalents (159,185) (12,251)

AT BEGINNING OF THE YEAR 2,612,796 3,396,207

AT END OF THE YEAR 4,567,089 2,612,796
164
376
Annual Report 2018
PARENT ENTITY
NOTES TO THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation of the separate financial statements of the parent entity
The separate financial statements of the Parent Entity are prepared in accordance with the Statement
of Financial Accounting Standards (“SFAS”) No. 4 (Revised 2013), “Separate Financial Statements”.
SFAS No. 4 (Revised 2013) regulates that when an entity elected to present the separate financial
statements, such financial statements should be presented as supplementary information to the
consolidated financial statements. Separate financial statements are those presented by a Parent
Entity, in which the investments in subsidiaries and associates are accounted for at cost or in
accordance with SFAS No. 55, “Financial Instruments: Recognition and Measurement”.
Amendment to SFAS No. 4 (2015) allows the use of equity method as a method of recording the
investments in subsidiaries, joint ventures and associates in the Separate Financial Statements of the
entity.
Accounting policies adopted in the preparation of the parent entity separate financial statements are
the same as the accounting policies adopted in the preparation of the consolidated financial
statements as disclosed in Note 2 to the consolidated financial statements.
2. RECLASSIFICATION OF ACCOUNTS
Certain accounts in the consolidated financial statements as of December 31, 2017 have been
reclassified to conform with the presentation of accounts in the consolidated financial statements as of
December 31, 2018. The details of these accounts are as follows:
Previously
reported Reclassification Restatement
Separate Statement of Financial Position

Assets
Current assets
Other investments - 27,328 27,328
Non-current assets
Long-term investments 16,924,234 (27,328) 16,896,906
165
377
SECURING ENERGY
Glossary of Terms
Abbreviation Definition Abbreviation Definition

PPE Personal Protective Equipment LOBP Lube Oil Blending Plant
BBK Special Fuel MBOEPD Million Barrel Oil Equivalent Per Day
bbl Barrel Oil MDGs Millennium Development Goals
BBM Fuel MoEMR Ministry of Energy and Mineral Resources
BBTUD Billion British Thermal Unit per Day MMBO Million Metric Barrel of Oil
BOPD Barrel Oil Per Day MMbbl Million Barrel Oil
BSCF Billion Standard Cubic Feet MMBTU Million British Thermal Unit
BSCFG Billion Standard Cubic Feet of Gas MMSCFD Million Standard Cubic Feet per Day
CIP Continuous Improvement Program MOPS Mid Oil Platts Singapore
CNG Compressed Natural Gas MRU Mobile Refueling Unit
COCO Company Owned Company Operated MT Metric Ton
CODO Company Owned Dealer Operated MW Mega Watt
Conco Delco Contracting Company Delivery Company NBBM Non-BBM
CSS Corporated Shared Service ONWJ Offshore Northwest Java
CSMS Contractor Safety Management System PCU Pertamina Corporate University
DPPU Depot Pengisian Pesawat Udara | Aviation Fuel Terminal PDSI PT Pertamina Drilling Service Indonesia
EOR Enhancement Oil Recovery PEP PT Pertamina EP
ERM Enterprise Risk Management PEPC PT Pertamina EP Cepu
ERP Enterprise Resource Planing Pertagas PT Pertamina Gas
FSRU Floating Storage Regasification Unit Petral Pertamina Energy Trading Limited
GCG Good Corporate Governance PGE PT Pertamina Geothermal Energy
GRR Grass Root Refinery PHE PT Pertamina Hulu Energi
CBM Coal Bed Methane PLBC Cilacap Blue Sky Project
GWh Gigawatt hours CLA Collective Labor Agreement
GTL Gas to Liquid PKBL Partnership Program and Community Development
HBM Capital Goods PROPER Program Penilaian Peringkat Kinerja Perusahaan I Corporate
Environmental Performance Rating
HSD High Speed Diesel
PSC Production Sharing Contract
ICoFR Internal Control over Financial Reporting
PSO Public Service Obligation
ICP Indonesian Crude Price
RDMP Refinery Development Master Plan
ICT Information and Communication Technology
RFCC Residual Fluid Catalytic Cracking
I-P2P Integrated Procure to Pay
RFM Retail Fuels Marketing
ISC Integrated Supply Chain
RJPP Long-term Corporate Plan
ISRS International Sustainability Rating System
RKAP Corporate Budget and Plan
JOB Joint Operation Body
RU Refinery Unit
HSSE Health, Safety, Security, and Environment
GMS General Meeting of Shareholders
KLH State Ministry of Environment
SKK Migas Special Task Force for Upstream Oil and Gas Business Activities
KMSS System Standards Management Committee
SPBG Fuel Gas Filling Station
KOMET Knowledge Management Pertamina
SPBU Public Fuel Filling Station
KSO Joint Operation
STS Ship to ship
LHKPN State Official Wealth Report
TAC Technical Assistance Contract
LNG Liquefied Natural Gas
VHS Vendor Held Stock
LPG Liquefied Petroleum Gas
VLGC Very Large Gas Carrier
LPP Legal Preventive Program
KTA Kilo Tons per Annum
378
Annual Report 2018
379
SECURING ENERGY
Annual Report
2018
HEAD OFFICE
Jl. Medan Merdeka Timur
1A, Jakarta 10110 Indonesia
Phone : (62-21) 381 5111, 381 6111
Fax : (62-21) 384 3882, 384 6865
CORPORATE SECRETARY
Jl. Medan Merdeka Timur 1A,
Jakarta 10110 Indonesia
Phone : (62-21) 381 5611
Fax : (62-21) 350 7074
CONTACT PERTAMINA
Phone : 1500 000
SMS : (62) 815 9 500000
E-mail : [email protected]

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Annual Report

INSPIRING INDONESIA REENERGIZING SPIRIT,

EMBRACING CHANGE, MOVING.

2 Theme 11 Bonds Higlights

26 Board of Commissioners Report 32 Board of Directors Report

44 Corporate Identity 58 Products and Services

88 Economic Review 118 Financial Performance Review

CORPORATE SOCIAL RESPONSIBILITY

196 Corporate Social Responsibility

204 Financial Statements

DOWNSTREAM AVIATION FUEL

(in USD million)

Description 2018 2017* 2016* 2015** 2014**

Operating Income 6,247 5,187 6,699 3,921 4,438

Net Profit Before Effects of Merging Entity’s Profit 2,636

EBITDA 9,204 7,256 8,471 5,130 5,728

Total Assets 64,718 57,439 53,976 45,519 50,696

Total Liabilities 35,108 30,426 28,731 26,044 31,881

Total Equity 29,610 27,013 25,245 19,475 18,815

OPERATIONAL PERFOMANCE HIGHLIGHTS

Oil Production MBOPD 393 342 312 278 270

Gas Production MMSCFD 3,059 2,035 1,961 1,902 1,613

Additional Reserves Proven (P1) MMBOE 426 314 227 79 282

REFINERY PERFORMANCE AND DEVELOPMENT

Crude Oil, Gas, and Intermediate

Fuel Production MMBBL 279 263 266 241 241

Non-fuel Production MMBBL 29 29 26 23 22

Fuel Sales Million Kilo Liter 70 67 65 62 65

Non-Fuel Sales Million Kilo Liter 16 16 15 14 14

Gas Sales Volume BBTU 1,122,623* 823,769 708,684 705,729 701,724

Gas Transportation Volume BSCF 777* 502 522 531 508

Pertamina Pertamina Pertamina Pertamina Pertamina Pertamina Pertamina Pertamina

23 May 27 May 3 May 3 May 20 May 20 May 30 May 07 Nov

23 May 27 May 3 May 3 May 20 May 20 May 30 May 07 Nov

Tenor 10 Years 30 Years 10 Years 30 Years 10 Years 30 Years 30 Years 30 Years

Coupon 5.250% 6.500% 4.875% 6.000% 4.300% 5.625% 6.450% 6.500%

BB+ BB+ BB+ BB+ BB+ BB+ BB+

Baa3 Baa3 Baa3 Baa3 Baa3 Baa2

Most Recent Ratings

Baa2 Baa2 Baa2 Baa2 Baa2 Baa2 Baa2 Baa2

No DATE NAME OF AWARD RATING AND CATEGORY AWARDED BY

Gold Champion in the field of

Silver for the Corporate PR Program

For the Category of Contribution

March 29, PR Indonesia Awards

April 26, Intellectual Property (IP) Enterprise World Intellectual Property

Brand Finance TOP 100 Most Valuable Indonesian Brands 2018

The Asian Regional category for the

Indonesia Green 3 Best Companies awarded

August 3, The Best Contact Center Indonesia Contact Center

No DATE NAME OF AWARD RATING AND CATEGORY AWARDED BY

Anugerah Indonesia’s Indonesia’s Best Business Practices

Anugerah Indonesia’s Indonesia’s Best Corporate Philanthropy

September Ministry of Energy and Mineral

October Asia Pasific Contact Centre Asso­

Winner for the Category of Special

December Marketeers Editor’s The Breaktrough Application Of The

Korea Invention Promotion

Description 2018 2017* 2016* 2015 2014

October Asia Pasific Contact Centre Asso