Strategic Energy Portfolio Optimization for National Oil Company amidst Uncertainties and Climate Change

Abstract

Facing oil price volatility, loss profitability during COVID-19 pandemic in the year 2020, technological advancement and the declined cost of renewable energy, countries increasing commitment towards net-zero emission target, ESG investment trend, and oil reserves structural declined projection, Indonesia National Oil Company will require strategy to optimize its energy portfolio to enhance resiliency, agility and flexibility to unlock new value and bigger impact for the stakeholders. Optimizing the company’s alreadydiversified energy portfolio as an adaptive strategy will enhance the company resiliency in facing the uncertainty of oil price volatility, technological advancement in new and renewable energy that can increase disruption risk to the company’s current strategy as well as to reduce GHG emission, where the scenario simulation shows that gradually optimizing 10-25% new and renewable energy portfolio will enhance company profitability in the longrun, by building strong-integrated energy network from upstream to downstream to provide low-carbon energy solutions align with government regulations support, demand-side efficiency as well as carbon market price implementation that expected to reach minimum ?US$ 5075/tonCO2eq to reduce GHG emission as a contribution to climate change mitigation.

Keywords: Strategy, Energy, Optimization Scenario, National Oil Company, Uncertainty, Climate Change.