PHE Strengthens National Oil and Gas Production, Insurance Industry Becomes Strategic Partner
Upstream oil and gas operations carry significant risks, making insurance coverage essential for risk mitigation. With anticipated increases in upstream oil and gas production over the coming years, Indonesia’s insurance industry faces considerable opportunities. As investment and energy asset values reach billions of US dollars, insurance protection has become critical for maintaining operational continuity and sector resilience.
PT Pertamina Hulu Energi (PHE), Pertamina’s upstream subholding, makes a substantial contribution to national oil and gas production. PHE currently manages approximately 27% of Indonesia’s operator working areas, contributing around 65% of domestic oil lifting and 35% of national gas lifting.
PHE continues to implement various strategic programmes to maintain national energy security whilst driving production increases. These efforts include field development, new exploration, enhanced oil recovery (EOR), and optimisation of existing assets through drilling, workover, and well intervention at scale.
The company is also actively exploring new working areas with potential to yield significant additional oil and gas resources. This approach forms part of a strategy to offset natural production decline whilst strengthening domestic energy supply.
As operations expand, the value of PHE’s managed assets continues to grow. This is reflected in the total capital expenditure PHE invests annually in development, exploration, and oil and gas services, which amounts to billions of US dollars. Insured assets currently include onshore and offshore properties as well as thousands of oil and gas wells.
“Oil and gas production is not merely about lifting volumes. It is about building an industry that is resilient, bankable, and trustworthy. Collaboration with the insurance industry is fundamental to PHE’s sustainability strategy,” stated Villia Sim, Vice President of Financing and Treasury at PT Pertamina Hulu Energi, during a casual discussion forum titled “The Massive Potential of Insurance Business Behind Increased Oil and Gas Production” in Jakarta on Thursday, 5 March.
According to Villia, under Indonesia’s upstream oil and gas work contract scheme, each Upstream Cooperation Contract (KKKS) contractor is obligated to maintain insurance coverage throughout operations. This is an important element in ensuring sector stability and protecting national energy investments.
Going forward, PHE will pursue dual-growth strategy through optimisation of core oil and gas operations alongside development of low-carbon energy such as carbon capture and storage (CCS) and carbon utilisation and storage (CCUS), as well as decarbonisation initiatives. With support from strategic partnerships, including from the insurance sector, the upstream oil and gas industry is expected to become increasingly resilient, efficient, and sustainable.