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Doing business with Pert�min�

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To underst�nd Pert�min� tod�y requires insight into the �ro�der context: � period of unprecedented ch�nge in the glo��l oil �nd g�s industry �nd the pursuit of � m�rket friendly economic policy in Indonesi�.

As l�rgest st�te owned corpor�tion, Pert�min� is the energy powerhouse of Indonesia, supplying signific�nt oil, g�s, petroleum �nd other �ltern�tive forms of energy for vit�l needs every d�y.

To meet new ch�llenges in glo��l energy m�rkets, Pert�min� is responding through � transformation programme from upstre�m to downstre�m oper�tions, �nd from m�n�gement to employees �s we pursue � long term vision of �ecoming recognised �s � world cl�ss n�tion�l oil comp�ny.

We h�ve set ourselves region�l �nd world-cl�ss go�ls in our medium term pl�n. For tod�y, the purpose of this profile is to ex�mine the sound progress to d�te in taking care of business at home.

A fresh look �t Pert�min�

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Who we �re

How we �re moving forw�rd

Where we oper�te

Tr�nsform�tion progress

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Meeting energy needs in emerging marketsEven �s multin�tion�l oil corpor�tions pu�lish new record levels of e�rnings �midst energy price vol�tility, pl�ns for restructuring, cost reduction, productivity �nd efficiency �re �eing �nnounced in � new w�ve to �ddress declining production �nd meet future dem�nd. In its 2007 �nnu�l report the Intern�tion�l Energy Agency (IEA) points to the need for signific�nt new levels of investment, �mounting to hundreds of �illions of doll�rs �nnu�lly, to stem � decline in oil production over the next two dec�des. Most signific�ntly, the IEA indic�tes th�t the m�jority of the incre�sed dem�nd in the future will come from emerging m�rkets. There h�s never �een � �etter time for rejuven�tion �nd growth for Indonesi�’s le�ding energy producer.

Pertamina has a new role, new outlookProgress with economic deregul�tion h�s signific�ntly �ltered the role �nd st�tus of Pert�min�. We no longer c�rry the functions of industry regul�tor �nd licensor. Pert�min� h�s �ecome � limited li��ility comp�ny, oper�ting on �n equ�l footing with priv�te sector competitors in the oil �nd g�s industry. The new st�tus �rings new expect�tions; of improved fin�nci�l �nd oper�ting perform�nce, �nd gre�ter tr�nsp�rency �nd cultur�l ch�nge necess�ry to compete successfully in � dyn�mic open environment. Not le�st in tod�y’s medi� driven society, is the need to m�int�in �nd �uild � solid reput�tion with pu�lic st�keholders �nd the community �t l�rge.

Cilacap is our largest refinery, producing a wide range of fuels, non fuels and paraxylene products.

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TransformationTo meet these ch�llenges the entire spectrum of Pert�min�’s oper�tions is undergoing � thorough tr�nsform�tion: on fund�ment�l v�lues �nd �usiness themes �pplied �cross upstre�m director�tes �nd su�sidi�ries, �cross explor�tion �locks, �60 production fields �nd � signific�nt downstre�m refining, m�rketing �nd tr�ding network. Results of this tr�nsform�tion �re �lre�dy �ecoming more visi�le, �nd � key p�rt of this effort is Pert�min�’s commitment to full tr�nsp�rency in reporting our fin�nci�l �nd oper�ting perform�nce, including our soci�l �nd environment�l responsi�ilities.

46explor�tion �locks

�40thous�nd km2 E&P working �re�

�,�78full service g�s st�tions

�60oil �nd g�s production fields

5geotherm�l production sites

refineries

�,0526thous�nd��rrels c�p�city

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Who we �re

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As a management team we have set a clear vision and mission: To be a world class national oil and gas company and To run our core businesses in oil, gas and biofuels in an integrated manner, based on strong commercial principles.

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To �chieve our vision �nd mission we h�ve �dopted core v�lues �nd cle�rly focused str�tegy.

Cleanm�n�ged profession�lly, �voiding �ll forms of conflicts of interests, corruption �nd emph�sizing high st�nd�rds of trust �nd integrity ��sed on good corpor�te govern�nce principles

Pertamina has a seven point business strategy, to be:

Focused on core �usinesses in oil, g�s, �nd �iofuel production �nd s�lesCommerci�lly-oriented in �ll decision m�king M�n�ged to the highest st�nd�rds in line with principles followed �y le�ding pu�lic comp�niesEmployer of choice, eng�ged in �est pr�ctices in hum�n resources development

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Core values

Competitivedriving growth through investment �nd �uilding � perform�nce-focused �nd cost-conscious culture

Confident�n �ctive p�rticip�nt in n�tion�l reform �nd economic development; �ecoming � source of n�tion�l pride

Our bright, motivated and highly skilled employees play a pivotal role in the journey to achieve our strategic goals.

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Customer focusedcommitted to giving the �est service, in the �est interests of the customer

Commercial�dding v�lue through � commerci�l orient�tion �nd t�king decisions ��sed on he�lthy �usiness principles

Capableled �y profession�ls with high t�lent �nd technic�l skill levels, �nd committed to �dv�nced rese�rch �nd development

Cre�tor of � he�lthy �usiness environment eng�ging with profession�l, trusted �usiness p�rtners with integrityInvesting in growth gener�ted from within �nd through working with trusted �usiness p�rtnersDriven �y technology, rese�rch �nd development go�ls, sh�red with universities �nd technic�l institutions �s we strive for excellence

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Purpose We �im to �ecome the le�ding oil �nd g�s producer �nd supplier in Indonesi� outright, ��sed on reli��le �nd competitive upstre�m �nd refinery oper�tions. We �re t�rgeting m�rket le�dership from � found�tion of � sound, efficient infr�structure, �nd � highly visi�le network offering the �est st�nd�rds in customer service. Implementing the l�test inform�tion systems, technology, he�lth & s�fety st�nd�rds, �nd rese�rch & development, we seek to �ecome the chosen workpl�ce for qu�lified people. And through these �ccomplishments we w�nt to deliver profits th�t will support � prudent investment progr�mme to sust�in growth �nd e�rnings for sh�reholder v�lue.

PartnersPert�min� h�s � long history of cooper�tion �nd �usiness p�rtnerships with v�rious domestic �nd intern�tion�l oil �nd g�s comp�nies. As � pioneer in the Indonesi� Liquified N�tur�l G�s (LNG) �usiness, Pert�min� h�s formed joint venture comp�nies in the Arun �nd Bont�ng LNG pl�nts with intern�tion�l comp�nies such �s Tot�l �nd ExxonMo�il. In technic�l engineering services, Pert�min� cooper�tes with engineering comp�nies such �s Mitsu�ishi Engineering �nd Nippon Steel. In more recent times, Pert�min� h�s �lso conducted upstre�m explor�tion in p�rtnership with St�toil �nd Petron�s. In refining, Pert�min� h�s p�rtnered with SK Corpor�tion from Kore� to �uild �nd oper�te � new Lu�e B�se Oil (LBO) pl�nt in Dum�i, which w�s l�unched in 2008.

People The efforts of our employees, �t every level, contri�ute d�ily to the tr�nsform�tion of the comp�ny �nd the �chievement of our str�tegic go�ls. We �re investing more th�n ever �efore in cultiv�ting young t�lent, our future le�ders, with the t�sk of steering Pert�min� through the ch�llenges �he�d. A vit�l element in the tr�nsform�tion is � ch�nge in our culture, not imposed �ut developed through listening �s well �s informing, testing ide�s �nd promoting �n open environment in which employees �re encour�ged to spe�k up �nd sh�re views. Pert�min� is �n equ�l opportunities employer, rew�rding ��sed upon merit �nd c�p��ility without discrimin�tion on �ny grounds. Over �,700 m�n�gers h�ve completed culture ch�nge tr�ining modules �nd 2,000 m�n�gers now work to � merit-��sed perform�nce review. Since these progr�mmes commenced, ��0 ch�mpions of tr�nsform�tion h�ve emerged, new le�ders to ch�llenge, motiv�te, innov�te �nd �dd v�lue – key principles we seek to im�ue throughout the org�niz�tion.

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Where we oper�te

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Strategic upstream oil and gas exploration and productionTo �chieve our vision, Pert�min�’s m�n�gement is firmly focused on exp�nding upstre�m oil �nd g�s explor�tion �nd production in order to r�ise profit��ility �nd e�rnings �nd in turn, c�pit�l expenditures for yet gre�ter production growth.

Emph�sis on gre�ter sc�le �nd diversity will contri�ute to cultiv�ting upstre�m expertise �nd the skills necess�ry for m�int�ining our momentum. As we �chieve more success upstre�m �nd v�lue �t home, we will incre�singly pursue further development of our overse�s �ssets, thus r�ising our profile in intern�tion�l oil �nd g�s m�rkets.

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Geothermal energy: harnessing the Ring of FireWorldwide dem�nd for therm�l energy is estim�ted to triple over the next dec�de. Pert�min� is c�pit�lising upon Indonesi�’s unique geogr�phic�l position �etween the Eur�si�n �nd Indo-Austr�li�n tectonic pl�tes. Our �ctive volc�nic environment offers enormous potenti�l �s � source of sust�in��le, �ltern�tive, cle�n energy. Pert�min�’s geotherm�l power pl�nts work continuously d�y �nd night, not only reducing our reli�nce on fossil fuels �ut providing � highly �ttr�ctive �ltern�tive to costly sol�r �nd wind energy.

Our su�sidi�ry, PT Pert�min� Geotherm�l Energy h�s identified 70 sites with high temper�ture geotherm�l potenti�l which c�n �e used for gener�ting electricity.

Lahendong geothermal energy operation.

Hot steam from Lahendong supplies PLN to generate electricity of 10MW/year: serving the energy needs of North Sulawesi.

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Area

Sum�ter�

J�v� & B�li

Sul�wesi

Others

Total

Geothermal Potential - MWe (Mega Watt equivalent)

�,500

5,600

�,500

�,�00

19,700

Geothermal Production - MWe (location)

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825 (K�moj�ng, G. S�l�k, D�r�j�t, W�y�ng Windu, Dieng)

60 (L�hendong)

Under development

897

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Upstream and Downstream Operations

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Sudan

Libya

Iraq

Qatar

LeGenD

Oil & Gas Producing Area

Oil & Gas Prospect / Lead Area

Geothermal Producing Area

Geothermal Developing Area

Refineries

Vietnam

Malaysia

Indonesia

Oil & Gas7 own oper�ted �re�s�8 TACs�� JOB-PSCs� JOB-EORs�2 IP/PPI

Geothermal5 production sites5 development sites

Refineries6 loc�tions

Retail full service gas stationsOver 4,000 loc�tions (not individu�lly shown)

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Indi�n Oce�n

P�cific Oce�n

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Towards sustainability with biofuelPert�min� supports the vision of the President of the Repu�lic of Indonesi� for the cre�tion of � world cl�ss, world sc�le �iofuel production c�p��ility. We �re �ssisting Indonesi� to reduce its dependence on imported oil, cre�ting � sust�in��le source of green fuel, new jo�s, �nd region�l domestic economic development, �nd �re contri�uting to the reduction of pollution �nd greenhouse g�s emissions, p�rticul�rly CO2 from the use of fossil fuels.

While investing in oil �nd g�s explor�tion will incre�singly �ecome more costly, Pert�min� c�n contri�ute to the development of p�lm oil, � v�st sust�in��le resource, currently �v�il��le in sufficient qu�ntities to meet domestic cooking oil needs �nd the su�stitutions of 5% diesel �s � �iofuel. This level of su�stitution m�y �e extended to �0% upon further ev�lu�tion, while tri�ls continue to su�stitute �% kerosene. By 20�0, � full r�nge of �iofuels is pl�nned to �e �v�il��le �t g�s st�tions n�tionwide. Notwithst�nding short term fluctu�tions in CPO commodity prices (�longside oil price vol�tility) th�t m�ke fin�l product pricing � ch�llenge, Indonesi�’s strong fund�ment�ls of �n �ttr�ctive clim�te, world le�dership in p�lm oil production �nd signific�nt dem�nd for tr�nsport�tion fuel m�ke this � compelling opportunity.

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PASTI PAS! is our quality and service guarantee that Pertamina is committed to world class standards. Consumers can trust the quality of our friendly service and comfortable facilities.

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Pertamina’s retail franchise: A high visibility 24-hour service and a full product range.

Pertamina today is a modern full service retail franchiseOne of the strongest visi�le demonstr�tions of ch�nge �t Pert�min� is our response to the deregul�tion of downstre�m distri�ution �nd ret�il of oil �nd g�s products. We h�ve refreshed the look �nd function�lity of our g�s st�tions, which �re now truly service oriented, �dding �menities �nd new ret�il f�cilities for the motoring pu�lic. Over 4,000 sites, m�ny of them in entirely new loc�tions, h�ve sprung up in cities �nd su�ur�s, �long m�jor trunk ro�ds �nd multil�ne toll routes. They offer 24-hour service, � comprehensive r�nge of fuels including �iofuels �nd lu�ric�nts, plus ret�il �nd service offerings from str�tegic p�rtners speci�lizing in the stocking �nd inst�ll�tion of �utomotive sp�res �t selected sites.

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Clean, convenient domestic fuelThe dem�nd for n�tur�l g�s is outstripping th�t of oil �s more consumers recognize g�s �s � cle�n �nd cost effective source of energy for cooking �t home. Pert�min� h�s supported the Government’s progr�mme to encour�ge switching from kerosene, offering su�sidies to ensure the �enefits of g�s �re �ccessi�le �nd �fford��le.

Above:Clean affordable natural gas – a modern amenity.

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How we �re moving forw�rd

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Progress has been made with measurable results in business performance. Successes are evident in increasing production volumes, additional revenues, quality improvements and significant cost savings. Equally, the process of culture change has contributed to ensuring everyone at Pertamina is aligned and supportive of the transformation process; that we all know where we are going, why, and how we will get there.

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BusinessUpstre�m, �g�inst the gener�l glo��l trend of declining output, Pert�min�’s production h�s �een incre�sed to over �50m�opd which represents gre�ter th�n �0% incre�se over production � ye�r �go. Our oper�tion�l perform�nce improvement progr�mme �t refineries, now in its second ye�r of � three-ye�r pl�n, h�s �lre�dy gener�ted signific�nt cost s�vings �mounting to over Rp 400 �illion with � further Rp 2.5 trillion in s�vings identified. Improvement in key perform�nce r�tios in � num�er of refineries is r�ising output �nd qu�lity.

Oil & Condensate Reserves (MMSTB)

Gas Reserves (BCF)

Geothermal Reserves (MW)

200� 2004 2005 2006 2007

200� 2004 2005 2006 2007

200� 2004 2005 2006 2007

910

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4

172

1,5

00

60

0

54

0

1,3

61

56

5

53

8

88

3

32

7

26

3

1,0

70

29

521

9

7,0

00

1,4

73

3,4

31

19,0

00

7,0

00 9,

97

0

19,6

54

9,19

9

14,3

70

8,3

37

2,4

75

760

8,3

78

1,7

01

1,3

22

2,2

01

43

0

2,8

12

2,3

54

58

5

3,4

80

3,0

30

75

0

2,6

20

2,0

80

58

0

3,8

30

2,4

60 4

,14

0

9,10

0

Proven Probable Possible

Proven Probable Possible

Proven Probable Possible

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Downstre�m, we h�ve surrounded customers with �n entirely different �utomotive ret�il �nd service experience �t our new “P�sti P�s” g�s st�tions. We h�ve sh�ved distri�ution costs �y 7% �nd �chieved efficiencies in shipping �nd reduced l�ytime �t ports. The highly visi�le LPG conversion progr�mme to encour�ge consumers to use cle�n, �fford��le n�tur�l g�s liquids inste�d of kerosene h�s gener�ted s�vings of Rp � trillion �nd re�ched out to more th�n �7.5 million households �nd industries.

CultureOil price vol�tility, declining production, higher oper�ting costs, �nd short�ges of skills �nd equipment from time to time, m�rk the incre�singly competitive environment of the oil �nd g�s sector worldwide. Indonesi� h�s �een not �een untouched �y these issues.

A num�er of perform�nce improvements h�ve �lre�dy �een completed �cross the corpor�tion’s director�tes with encour�ging results. While specific improvement progr�mmes �re v�lu��le, the Bo�rd of Directors h�s identified the need for � long term, sust�in��le �ppro�ch to enh�nce perform�nce in �n open deregul�ted environment. The �im: to �uild � culture th�t c�n �d�pt �nd thrive under the incre�singly ch�llenging conditions in the industry, � culture th�t will �ttr�ct the �est recruits �nd str�tegic p�rtners.

Action themes h�ve �een the ��sis for driving culture ch�nge so f�r. They cover the need to develop openness, tr�nsp�rency, �ccount��ility �nd merit-��sed rew�rds to encour�ge world-cl�ss perform�nce. They �ddress the need to develop future le�ders who will sust�in �nd �uild upon the �chievements so f�r, in the process of tr�nsform�tion.

Control room – modern IT systems ensure both reliability and safe operations.

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Tr�nsform�tion progress

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Transformation is an opportunity for building partnerships with Pertamina in generating sound and lasting business opportunities, furthering development and contributing through self help as well as community support.

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Pert�min� works closely with the Indonesi�n government to contri�ute to loc�l economic development, community welf�re including educ�tion�l needs �nd in the m�inten�nce of s�fety �nd he�lth st�nd�rds in �nd �round our production f�cilities. Our �ppro�ch is to look �eyond community support to identify opportunities th�t will cultiv�te �usiness, sust�in jo�s �nd promote commerce.

Our p�rtnership progr�mmes help contri�ute c�pit�l to fund sm�ll �usiness enterprises. Recycled �y-products from our oper�tions c�n �e used cre�tively to contri�ute to loc�l m�nuf�cturing such �s using �rine from our geotherm�l oper�tions in Sul�wesi to m�nuf�cture p�lm sug�r.

Pert�min� is m�king sound progress on � �ro�d front �nd is �lre�dy re�ping rew�rds. Consider��le ch�llenges lie �he�d �ut we encour�ge you to do �usiness with Pert�min� tod�y:

As � reli��le p�rtner, welcoming str�tegic �usiness rel�tionships.As �n org�niz�tion, committed to �eing open, tr�nsp�rent �nd focused upon profession�l �nd ethic�l st�nd�rds.As � comp�ny tr�nsforming itself to �dopt the convensions �nd disciplines of pu�lic ownership �s the next step tow�rds its medium term go�ls.

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Right: The utilisation of geothermal energy (brine water) in Lahendong for Masarang palm sugar factory earned us the Padma Award for CSR programmes from the Minister of Energy and Mineral Resources.

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Head OfficeJl. Medan Merdeka Timur No. 1A Jakarta 10110, Indonesia

Tel: +62 21 500 000 Fax: +62 21 797 2177Mobile: +62 21 7917 3000, sms: +62 21 7111 3000E-mail: pcc@pertamina.com

www.pertamina.com

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