Arcandra Tahar Talks About PGN Will Use Key Performance Indicators For The Performance Of Directors And Employees

JAKARTA - PT Perusahaan Gas Negara Tbk (PGN) President Commissioner Arcandra Tahar said the company will focus on efficiency and return on investment because of the certainty of gas supply, infrastructure development and increasing demand for gas.

He added that PGN must also take initiatives and various breakthroughs in order to be able to carry out this strategic role and encourage various efficiency policies.

"This is done to ensure that every policy taken is able to be carried out optimally and provide optimal business benefits to the company in a sustainable manner," Arcandra said in Jakarta, quoted from the Facebook account @arcandra.tahar, Thursday, June 3.

The owner of five oil and gas patents exemplifies the efficiency in the Rokan oil pipeline project which is about 360 kilometers long. The project was transferred to Pertagas and PGN with a proposed capital expenditure of US$450 million.

After being reviewed, the project can run with a capital expenditure of US$300 million so that the company can save US$150 million or around Rp2 trillion.

According to him, the efficiency space includes technology, working methods, and also how to manage projects.

"So the three main aspects of efficiency are technology, human resources, and business processes that are made efficiently," said Arcandra.

The Company also seeks to make various other improvements, including key performance indicators (KPI) of the performance of employees and directors.

If previously the KPI at PGN was calculated based on how much investment was made, then the KPI was changed. Currently the KPI calculation is based on how much profit is generated from an investment, so it is no longer oriented to the amount of investment.

"It is better if the KPI measured at PGN is not the amount of investment, but the return that must be obtained from an investment. In the oil and gas industry the average internal rate of return from an investment is at least 15 percent," said Archandra.

In the first quarter of 2021, PGN posted revenues of US$733.15 million. Meanwhile, the net profit that can be distributed to the owners of the parent entity was recorded at 61.5 million US dollars. This amount increased compared to the same period the previous year of 47.7 million US dollars.