SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL OIL AND

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL OIL AND GAS POLICY AND REGULATION 1

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL ROLE OF OIL AND GAS INDUSTRIES EFFECTS MULTYPLIER INDUSTRY FEEDSTOCK FUEL DOMESTIC STATE REVENUE SOURCE OF NATIONAL SUSTAINABLE DEVELOPMENT OIL AND GAS INDUSTRY HIGH TECH. CAPITAL RISK 2

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL NATIONAL OIL AND GAS REGULATORY FRAMEWORK LAW NO. 22/2001 CONCERNING OIL AND GAS (PARADIGM) OIL AND GAS POLICY (POLITICAL PLATFORM) OIL AND GAS REGULATION UPSTREAM BUSINESS REGULATION Objective: § Efficient and liable oil and gas management DOWNSTREAM BUSINESS REGULATION Objective: § The assurance of oil and gas fuel supply in efficient and adequate amount SUPPORTING BUSINESS REGULATION Objective: § Competent oil and gas supporting business OIL AND GAS INDUSTRY TECHNOLOGY REGULATION Objective: § Reliable, Safe, and environmentally friendly oil and gas installation 3

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL FUEL POLICY SECURITY OF SUPPLY FUEL CLASSIFICATION FUELS POLICY PRICING POLICY FUEL DIVERSIFICATION FUEL SPECIFICATION FUEL CONSERVATION 4

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL TARGET OF ENERGY MIX (Presidential Regulation No. 5 of 2006) Energy Mix 2025 Primary Energy Mix 2006 Hydro Power 3. 11% Geothermal 1. 32% Gas 28. 57% Oil 20% Gas 30% Biofuel 5% NRE, 17% Geothermal 5% Biomass, Nuclear, Hydro Power, Solar, Wind Power 5% Oil 51. 66% Coal 15. 34% Energy Elasticity = 1, 8 NON FOSSIL ENERGY < 5% Liquefaction Coal 2% Coal 33% Energy Elasticity < 1 NON FOSSIL ENERGY New & Renewable Energy Minimum 17 % 5

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL NATIONAL FUEL SUPPLY 6

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL INDONESIA ENERGY RESERVES AND PRODUCTION (2008) RESOURCES RESERVES PRODUCTION RSV/PROD RATIO (YEARS)*) Oil 56, 6 billion barrel 8, 4 billion barrel**) 348 million barrel 24 Gas 334, 5 TSCF 165 TSCF 2, 7 TSCF 61 Coal 93, 4 billion ton 18, 7 billion ton 250 million ton 75 453 TSCF - - - FOSSIL ENERGY Coal Bed Methane (CBM) *) Assumed: no new reserves found **) Including Cepu Block NON-FOSSIL ENERGY RESOURCES INSTALLED CAPACITY Hydro 75. 670 MW (e. q. 845 million BOE) 4. 200 MW Geothermal 27. 000 MW (e. q. 219 million BOE) 1. 052 MW 450 MW 84 MW 49. 810 MW 300 MW Solar 4, 80 k. Wh/m 2/day 8 MW Wind 9. 290 MW 0, 5 MW 3. 000 MW (e. q. 24, 112 ton) for 11 year*) 30 MW Mini/Micro Hydro Biomass Uranium *) Only at Kalan – West Kalimantan Source : Directorate General of Oil and Gas, 2009 7

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL NATIONAL FUEL SUPPLY SYSTEM REFINING EXPLOITATION TRANSPORTATION STORAGE TRADING USAGE CBM LPG IMPORT GAS S P S R GAS PIPE LNG RT S GAS EXPORT CRUDE EXPORT C C RG LPG St St C CNG S P R S St P C T OIL C S C R CRUDE IMPORT T Max 10% St FUEL IMPORT Process ALTERNATIVE SOURCES C St S P = Separator = Pipe R T = Refinery = Tank RT = Receiving Terminal RG = Regasification C = Consumers St = Station CBM = Coal Bed Methane 8

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL OIL REFINERIES IN INDONESIA SOUTH CHINA SEA PT. PERTAMINA (Persero) PACIFIC OCEAN UP II Dumai CAPACITY : 127 MBCD PT. PERTAMINA (Persero) PT. PATRA SK UP V Balikpapan UP VII Kasim DUMAI CAPACITY : 260 MBCD CAPACITY : 10 MBCD CAPACITY : 25 MBCD PT. PERTAMINA (Persero) UP VI Balongan UP II Sungai Pakning CAPACITY : 125 MBCD CAPACITY : 50 MBCD PT. PERTAMINA (Persero) UP III Plaju PT. TRANS PACIFIC PETROCHEMICAL INDOTAMA CAPACITY : 127 MBCD Tuban CAPACITY : 100 MBCD PT. PERTAMINA (Persero) PUSDIKLAT MIGAS UP IV Cilacap Cepu OIL REFINERY CAPACITY : 348 MBCD CAPACITY : 3, 8 MBCD (TOTAL CAPACITY: 1. 176 MBCD) Source : Directorate General of Oil and Gas, 2009 9

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL FUEL STORAGE FACILITIES NAD 228, 861 KL Kaltim North Sumatera Kalbar Kalsel 7, 000 KL 32, 815 KL 2, 517 KL Riau dan Kep Riau 3, 720 KL UPMS VII 224, 140 KL UPMS VI 236, 368 KL 101, 580 KL UPMS VIII 282, 544 KL UPMS I 848, 214 KL UPMS II 205, 509 KL UPMS III Jakarta dan Banten 1, 235, 850 KL UPMS IV UPMS V 467, 470 KL 206, 809 KL 660, 575 KL Central Java 3, 100 KL Source : Directorate General of Oil and Gas, 2009 East Java 55, 649 KL Total Owned by PT Pertamina (Persero) : 4. 16 millin KL Total Owned by Private Companies : 642 thousand KL 10

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL FUEL SUPPLY DEMAND Notes: - Supply = Production + Import - Tri Wahana Universal Refinery (6, 000 barrel/day) and Muba Refinery ( 800 barrel/day) start to operate in 2009. - Banten Refinery (150, 000 barrel/day) start to operate in 2014 (Based on Pertamina’s Project Plan) Source : Directorate General of Oil and Gas, 2009 11

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL FUEL SUPPLY – DEMAND 2008 Source : Directorate General of Oil and Gas, 2009 12

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL FUEL SUPPLY SECURITY 13

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL FUEL SUPPLY SECURITY OPTIMIZING THE UTILIZATION OF DOMESTIC REFINERIES REVAMPING EXISTING REFINERIES EFFORTS NEW REFINERY DEVELOPMENT ENCOURAGING ALTERNATIVE FUELS 14

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL INDONESIA FUEL STOCK • ALONG WITH THE ISSUE OF OIL & GAS LAW NO. 22 YEAR 2001, AND GOVERNMENT REGULATION NO. 36 YEAR 2005, DOWNSTREAM ACTIVITIES STARTED GROWING INCLUDING BUSINESS OPPORTUNITIES FOR FUEL STORAGE. • CURRENTLY INDONESIA HAS MERELY THE FUEL STOCK. • INDONESIA HAS A 23 -DAYS-FUEL STOCK IN REFINERIES, SHIPS, AND COMMERCE 15

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL FUEL DIVERSIVICATION 16

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL SUBSTITUTION OF KEROSENE TO LPG FOR HOUSEHOLD AND MICRO BUSINESS Completion Program 1, 63% 20, 90% 40, 80% Note: 98, 37% In 2010, subsidized kerosene remained in the market used only for household in remote area, small business and house lighting. 79, 10% 80, 57% 59, 20% 20, 40% Source : Directorate General of Oil and Gas, 2009 17

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL BIOFUEL Bioethanol Gasoline Substitute Kerosene Substitute Bio-oil/Pure Plantation Oil Biodiesel Fuel Oil Substitute Gasoil Substitute 18

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL CONCLUSIONS 19

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL CONCLUSIONS 1. DOMESTIC FUEL CONSUMPTION CONTINUALLY INCREASES WHILE FUEL PRODUCTION IS RELATIVELY CONSTANT. CONSEQUENTLY, TOTAL IMPORTED FUEL IS ESTIMATED TO BE CONTINUALLY INCREASING. DEVELOPMENT AND EXPANSION OF THE EXISTING OIL REFINERIES AS WELL AS CONSTRUCTION OF NEW REFINERIES WOULD BE USEFUL TO REDUCE DOMESTIC DEPENDENCY ON IMPORTED FUEL. 2. ENERGY DIVERSIFICATION PROGRAM IS IMPLEMENTED IN ORDER TO CONSERVE THE LIMITED FOSSIL FUEL SOURCE. NATURAL GAS, BIOFUEL AND COAL UTILIZATIONS ARE MAIN ISSUES IN THE SUBSTITUTION OF CONVENTIONAL FUELS (GASOLINE AND GASOIL). 3. DOWNSTREAM BUSINESS ACTIVITIES, ESPECIALLY OIL AND NATURAL GAS STORAGE BUSINESS IN INDONESIA IS GROWING AND OPEN TO PRIVATE SECTOR. 20

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL www. den. go. id 21