Perusahaan Gas Negara Investor Presentation 12M 2016 Update - PowerPoint PPT Presentation

Perusahaan Gas Negara Investor Presentation 12M 2016 Update

Disclaimer: The information contained in our presentation is intended solely for your personal reference. In addition, such information contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions subject to various risk. No assurance can be given that further events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ materially from those projected. . 2

PGN Group and Ownership 56.97% 43.03% Government of Public Republic Indonesia Total Shares: 24,241,508,196 Incl. 1,850,000 Treasury Stock and 1 Seri-A Dwiwarna Share Other LNG Transmission Distribution E&P Operation PGAS Saka Energi PGN LNG Business Unit Telekomunika Business Unit Indonesia Indonesia Gas Product Infrastructure si Nusantara (SEI) (PLI) (PGASKOM) Gagas Energi Transportasi PGAS Nusantara Indonesia Gas Indonesia Solution Regas (NR)* (GEI) (PGASOL) (TGI)* Permata Kalimantan Graha Jawa Gas Nusantara (KJG) (PGNMas) 3 *) TGI and NR are join control and unconsolidated

Business Model Leading Player in Indonesia Natural Gas Transmission & Distribution GTA GSA GSPA Gas Transportation Agreement Gas Sales & Purchase Agreement Gas Sales Agreement Between the gas transporter to Between PGN as gas distributors is an agreement whereas PGN purchase transport gas from supplier to an amount of volume from supplier. and customers. off-taker receiving point. 4

Recent Government Policies and Regulations July November December 2016 2016 2016 Government Regulation Central Bank Deputy Letter No. Decree of Minister of 18/5/DpG-DKSP/ Srt/B ESDM No. 40/2016 No. 72/2016 Mandatory use of Rupiah in Indonesia Gas Prices for Spesific Industry revised government regulation No.44/2005 on procedure and i.e the fertilizer industry, • Central Bank approved the postponement of administration of the state petrochemical and steel. the implementation of mandatory use of capital investment in SOEs and • Incentive is given considering Rupiah proposed by ESDM. Limited Liability Companies. the use of gas as feedstock and • Postponement applies to oil and gas sector • Procedures for the transfer of their strategic position to including : state ownership in an SOE to support economy growth. - Gas Transportation Fee other SOEs so as to constitute • Gas - Gas sales includes LNG regasification process price for the three parent-subsidiary company industries was equal to - Gas transportation tariff relationships. approximately USD6/MMBTU. • Postponement is valid until February 23, 2026 and effective starting 30 days after the approval date

The Evolving of Gas Price Regulations Decree of ESDM Minister No. 40/2016 Third Economic Gas prices for three specific Policy Package Presidential Decree industries i.e the fertilizer, Lowering energy price No. 40 /2016 Decree of ESDM petrochemical and steel including gasoline, Determination of gas Minister industry electricity and gas price price for seven industries Decree of ESDM No. 16 /2016 (specific users) Minister Procedure for determining the price for No. 6 /2016 specific users Guideline and procedure to determine allocation, utilization and price of gas November 2016 May 2016 June 2016 October 2015 February 2016

Network Infrastructure – Transmission & Distribution Regions III Medan Duri Batam 1 2 Palembang 4 3 5 Lampung 6 Jakarta I Surabaya Semarang II Grissik – Duri Transmission Line 1 Grissik – Batam – Singapore Transmission Line 2 SSWJ Transmission Line 3 Existing Pipeline I Western Java, Lampung, Palembang Distribution Network FSRU Lampung 4 Planned Pipeline II East Java Distribution Network FSRU Jawa Barat (NR) 5 FSRU North Sumatera, Riau Island Distribution Network III Kalija I Transmission line 6 6

Source of Gas 1,598 MMscfd Bontang LNG PGN volume delivery via distribution and Inti Daya Latu Prima Pertagas transmission pipeline in 12M-2016 Ex. Jambi Merang Tangguh LNG Pertamina EP Asset 1 P. Susu Field Pertamina EP Asset 1 Benggala 1 Field Conoco Phillips PHE WMO Corridor PSC West Madura Offshore PSC Pertamina EP Asset 2 Santos South Sumatera Madura Offshore PSC BBG&WNE, IKD, SNR Ex TSB Pertamina TAC Ellipse Lapindo Brantas Husky CNOOC Brantas PSC Ex. Madura Strait PSC Jatirarangon TAC Gagas Energi Indonesia Pertamina EP Ex. WMO PSC Asset 3 Conventional Gas Sources, Major Gas Suppliers Conventional Gas Sources LNG Sources 7

Distribution Performance 865 824 795 807 802 803 Region III 11% (MMscfd) Region II 16% Region I 73% 2011 2012 2013 2014 2015 2016 Distribution Region Coverage Area Region I Western Java, Lampung, Palembang Region II East Java & Central Java Region III North Sumatera & Riau Islands 8

Serve All Segments Industries and Power Plants Households Commercial & SME 97.23% 0.28% 2.49% of total volumes of total volumes of total volumes 1,652 165,392 1,929 Customers Customers Customers 42.3% Industrial Diversification incl. Power Sector 13.9% 10.4% 9.5% 6.1% 4.4% 4.2% 3.5% 2.2% 2.4% 0.6% 0.4% 0.1% 0.04% 9 *) Data as of December 2016/ 12M-2016

Opportunity in Price Advantage 35 HSD vs Natural Gas 16000 PGN Average Natural Gas - avg PGN 8.55 Selling Price 14000 30 LPG - 3 kg (Subsidized) 7.10 12000 25 MFO 180 12.25 10000 LPG - 50 kg USD/mmbtu 12.36 20 Rp/USD 8000 Kerosene 15.17 15 6000 IDO/MDF/MDO 15.58 10 4000 Gasoline 88 15.66 5 2000 LPG - 12 kg 17.47 HSD 0 0 17.53 USD/MMBTU HSD Unsubsidized Price Natural Gas PGN Price Exchange Rate Note: Fuel price Pertamina as of December 2016 Exchange rate USD 1 = IDR 13,436 * Subject to ICP 10

Transmission Performance 877 845 854 852 PGN 2% 789 795 KJG (MMscfd) 12% TGI 86% 2011 2012 2013 2014 2015 2016 Note: *) As of January 1, 2015, PGN adopted PSAK 65 (Indonesian Statements of Financial Accounting Standards) regarding consolidated financial statements whereby it reassessed its control over its entities and requires PGN to unconsolidate PT Transportasi Gas Indonesia (TGI). 11

Consolidated Statements of Comprehensive Income In USD Million December 31, 2016 December 31, 2015 Revenues 2,934.8 3,068.8 Cost of Revenues 2,047.8 2,105.7 Gross Profit 886.9 963.1 Operating Income 444.2 557.2 EBITDA 807.4 951.2 Net Income 304.3 401.2 12

Consolidated Statements of Financial Position In USD Million December 31, 2016 December 31, 2015 Current Assets 2,124.7 1,722.5 4,709.5 4,772.5 Non Current Assets Total Assets 6,834.2 6,495.0 Current Liabilities 815.3 667.3 2,848.6 2,804.9 Non Current Liabilities 3,170.2 3.022.8 Total Equity 6,834.2 6,495.0 Total Liabilities And Shareholders Equity December 31, 2016 December 31, 2015 Ratios 0.5 0.5 Net Debt / Equity 6.1 8.8 EBITDA / Interest Expense 13

Loan Composition As of December 31, 2016 Credit Rating 2016 Wtd Avg (after tax) Baa3 4.53% Fixed Float BB+ Total Loan 63% 37% USD 2.77 billion BBB- USD JPY AAAid 87% 13% Long-term loan sourced from developmental banks, bond proceeds and commercial banks. 14

Upstream Assets C I H K D F F E G G J A B A Contract Asset % WI Operator Area (Km2) Status Expiry A Pangkah 100 SEI 784 Production 2026 Ketapang 20 Petronas 885 Production 2028 B Strategic Benefits Salamander C Bangkanai 30 1,395 Development 2033 South Sesulu 100 SEI 625 Exploration 2039 D • Increased security of gas supply in Fasken (Texas) 36 Swift Energy 8,300 acres Production 2050 Indonesia’s supply-constrained gas E market SES 8.9 CNOOC 6,082 Production 2018 F F • Future gas volume contribution from Muriah 20 Petronas 2,823 Production 2021 G projects coming online will drive gas G distribution volume and revenue H West Bangkanai 30 Salamander 5,463 Exploration 2043 growth • Natural hedge against future gas I Muara Bakau 11.7 Eni 1,082 Development 2032 price hikes and stronger pricing power with gas suppliers Wokam 100 SEI Exploration J 15 Sanga-sanga 37.81* SEI & Vico 1,075 Production 2018 K

Upstream Assets Portfolio Strategy Building a portfolio of opportunities Field Step Out Surrounding South East Sumatra PSC Discovery Exploration Acreage Offshore South East Sumatra Add value through Low risk exploration Add value through FASKEN development / using subsurface development / Eagle Ford, Texas commercialization knowledge commercialization Pangkah PSC DEVELOPED/DISCOVERED RESOURCES  Enhanced technical insight Offshore East Java  Operational flexibility  Financial synergies Ketapang PSC Offshore East Java Muriah PSC Offshore East Java Bangkanai PSC Onshore Kalimantan South Sesulu PSC Offshore East Kalimantan Wokam II PSC Muara Bakau PSC Offshore Papua Offshore East Kalimantan West Bangkanai PSC Onshore Central Kalimantan 16 RESERVOIR MATURITY