Strategic Investment Analysis for the Gas Station Projects Using Build Operate and Transfer (Case Study: PT Pertamina, Besakih Bali)

: One of deployment planning from Pertamina is Besakih area in Bali. In this simple requirement, Pertamina need a further study to plan which type of gas stations will be implemented, COCO (Company Own Compant Operate) or DODO (Dealer Own Dealer Operate). COCO was found to be the viable option because DODO facing a major challenge based on the PESTLE and SWOT which is an issue related to government attitude towards greener technology such as electric vehicle. A several options for funding have been identified and well documented with several restrictions which are equity, loan, venture capital, and build operate transfer. If Pertamina need a new gas stations in terms of only 20% coming from capital (80% loan). Pertamina is not entitled to fund by venture capital as Pertamina is a state own company with rigid regulation. For the deployment of new gas station, the most expensive part is the land, therefore searching the solution through land funding is the most viable option. It was found that the strategy build, operate, and transfer (BOT) is a very interesting option. For the Pertamina, it erases the necessity for buying the land, on the other hand, for the land owner, it is better that their land could be useful for them in the next 15 years before they are getting all the facility transferred. The payback period is only 3,36 years with the IRR of 27,03% which is higher than the WACC. In case of Pertamina taking 80% loan and 20% equity, the NPV will return in the 5 th year in start of the investment or 4 th year in start of the operation. This strategy opens up new opportunities and solution for the business because it writes out land CAPEX necessity.


INTRODUCTION
A staggering 23 million kiloliter of fuel has been consumed in Indonesia at 2021 only (Ridwan, 2022).This can be proven by the causalities between the price of fuel and rate of inflation.A 5 to 10% raise of fuel affect food and beverage price by 20 to 30% increase (Safitri, 2012).More than 90% of gas stations are corelated with PT Pertamina, the major government owned company managing the business of oil and gas.The total number of SPBU in Indonesia is 7455 in which 51% of total located at Java, Madura, and Bali.Particularly there are up to 162 corporate owner corporates operate (COCO) gas stations and 6,864 dealer owner dealer operate (DODO) gas stations.There is a significant difference between COCO and DODO in terms of investment and profit distribution.COCO is fully invested by Pertamina through their subsidiary which is Patra Niaga and Pertamina Retail.Therefore, all the costs and profit are subject to Pertamina.On the other hand, DODO is invested by private with a certain mechanism to divide their fuel profit depends on the fuel sales.Looking through the background above COCO and DODO differences may impact Pertamina in different way.Focusing more on the growth of COCO may require continuous high capital expenditure (CAPEX), on the other hand, focusing the growth of DODO may decrease the profit gained by the Pertamina.In addition, a relatively smaller gain for the NFR business since COCO get the most of NFR.Moreover, the number of DODO is projected to be declining because some of the owner argued that the business other than gas station is having more profit potential (Christianta, 2022).Based on the statement above, there is a necessity for Pertamina to review and adjust their strategy in terms of determining their focus for growing COCO or DODO gas station in Besakih area Bali.A step-by-step approach required from determining the framework (Ivey, 2015), collecting the data by available sources and interviews, making analysis through available framework, doing the financial analysis (Myers, 1984), and combining the analysis to make a good strategic recommendation.

BUSINESS OVERVIEW AND ISSUES EXPLORATION
Pertamina is a State-Owned Enterprise that has changed its name to PT. Persero, which is engaged in energy, petrochemical, and other businesses that support Pertamina's market-oriented domestic and international operations (P.Pertamina, 2021).which conducts business in the retail sector as a distributor of fuel at gas stations.Their activities include the management, development, new partnerships, and sales synergies between Pertamina businesses units and customers.PT Pertamina Retail has helped provide profit (profit) to its parent company and continues to grow until now (P.Pertamina, 2021).
Pertamina have an imbalance number of COCO and DODO in which DODO are the majority.This situation raises questions about how to manage the number for optimizing profitability while ensuring sustainability of the company.According to the interview (Christianta, 2022), there are many DODO gas stations are closing or planned to be closed because their profit margins is not adequate due to expensive land or another business opportunity.COCO gas stations in the other hand require extensive CAPEX upfront.The necessity is to review these two-business model, compare their profitability, and analyze the business driver and limitation.A step-by-step approach required from determining the framework (Ivey, 2015), collecting the data by available sources and interviews, making analysis through available framework, doing the financial analysis (Myers, 1984), and combining the analysis to make a good strategic recommendation.

RESEARCH QUESTION
The goal of this research, referring to the proposed question, its elaborate as the following: This research aims to answer the following research questions:  What is the profitability of COCO?  What is the profitability of DODO?  Which is the best profitability and capital liquidity? What is the business situation affecting COCO and DODO at Besakih area? What is the recommendation strategy for PT Pertamina Retail to maintain sustainability and optimizing profit?

RESEARCH FRAMEWORKS
The analysis path of this research will be based on the conceptual framework at figure II.1.The path after analyzing the general business of Pertamina would be determining the business of DODO and COCO for their differences, the method for a deeper understanding can be done with interview.After the business has been identified, then the profitability of each model will be defined.Only then the data is enough to do a deep analysis based on other supportive analysis framework such as porter five, SWOT, PESTLE, and Business model canvas.With these analyses and combined with finance and funding analysis the complete strategical approach can be fully determined.Using qualitative and quantitative following steps were taken in this research: identifying problems, conducting literature studies related to related problems, formulating problems, determining research objectives, conducting data collection, data processing, and analysis of the results using the Investment Criteria method, drawing conclusions and making recommendations for improvement.

B. Current Business Situation Analysis
The first step of strategic analysis is to determine the current situation by analyzing the business using BMC and interviews, making a global assessment using PESTLE analysis, competition and risk analysis based on porter's five, and financial review.

BUSINESS SOLUTION
Expert respondents were determined by the purpose sampling method consisting of 2 people from PT Pertamina Retail    There is a strong interconnection between fuel business and Indonesia and political.Fuel is highly subsidized by the government.Government believe that rising fuel prices affect translates to inflation rise (Winarto, 2012).Based on this condition, the owner of DODO gas station authority is very limited.Pricing will be coming from the government especially for subsidized fuel.Operation wise, because gas stations are dealing with dangerous highly flammable substances there are various standards need to be implemented.Even Pertamina also restrict which non-fuel businesses can be implemented inside of the gas stations (Christianta, 2022).On the other hand, for consistency, everything applied for DODO is also applied for COCO to make healthy competition.This is implying that the rise of world pricing for fuel will make instability for political conditions, moreover, not much Pertamina Retail and private gas stations owner can do about this condition.

Economical
Fuel is vital for Indonesian economy as logistic is very important factor because Indonesia consist of huge territory with thousands of islands.For now, logistic need fuel, and failure in fuel distribution or rising price will translate to inflation (Marvy, 2014).Indonesia is high in gross domestic product (GDP) and Indonesia is a member of highest GDP countries (G20) (Salim, 2011).
There is some level of uncertainty in the business of gas station in Indonesia because the limited economic power of the society.If the price is going up to high, then there will be portion of the society that would not afford to buy fuel.This will directly hit the gas station owner COCO and DODO.

Social
Indonesia has an enormous population size currently more than 200 million lives and expected to have more than 300 million lives in 2035 (Indonesia, 2013).The age demographic is more inside the productive range in which have heightened mobility which contributes for fuel usage, assumed start as early as 17 until 65 Indonesia demographics serve as a perfect recipe for fuel huge market potential.It is a rare sight that a gas station is empty except in productive hours.Mass transportation in Indonesia is still at under develop level except at the growing capital Jakarta.But even in this case, traffic jam is still major problem in Jakarta (Endarnoto, Pradipta, Nugroho, & Purnama, 2011).

Technology
Oil and gas industry technology is already at a mature state.The technology step based on the supply chain is exploration, extraction, refinery, and logistic handling is mature.However, the technology is growing at the digitalization especially at the operation and retail for end customer in which directly connected to COCO and DODO (Kusuma, Suryoko, & Pradhanawati, 2022).

Legal
Gas stations is the last place where fuel reach end customers in which has been elaborated before as highly political business.In this case nothing much to discuss in legal aspect besides their heavy legal bounded terms and conditions for deploying COCOs and DODOs.

Environment
The environmental aspects of oil and gas business is a very hot topic to discuss.Recently, the government pushing towards greener alternative than fossil fuels.Fossil fuel has been accused of pollution resulting for health risks and global warming (Blumer & Sass, 1972; Bose, 2010; F. Perera & Nadeau, 2022;Smith, 1993).In this case, government is pushing towards the usage of electric vehicles (Asfani et al., 2020).This is a contra productive initiative with gas stations which caused uncertainty for the business.This strategy provides amazing result in which the payback period is only 3,36 years with the IRR of 27,03%.In case of Pertamina taking 80% loan and 20% equity, the NPV will return in the 5 th year in start of the investment or 4 th year in start of the operation.This case is also providing the best US index of 2 out of other strategy.For the land owners, 20% of the profit per year is already a good deal provided the land have no other usage, in addition, the gas station facility will be theirs after 15 years of service.

CONSLUSION
After review, it can be concluded that DODO is not a viable option as the SWOT and PESTLE shown major challenge as the government going towards electric vehicle make businessman hesitating for spending huge capex due to uncertainty.The next challenge is new land acquisition which is not easy to find and expensive.Therefore, as the necessity for gas station is high, implementing COCO is the only way out.The essential aspects that will considerably influence on SPBU Besakih are the selection of land, selection of funding, selection of strategy.
The clear winner of the alternatives is COCO with BOT in which Pertamina can have a short payback period under 5 years.This is also a viable option provided the land have no other use in which usually the case.It is a good bargain for the land owner because the gas station facility will be handed over to the owner after 15 years of service.The second best is renting the land, however, the NPV still show the return more than 5 years even the payback period stating 4.02 years.The first two option with buying the land with or without loan is not advisable because both of the payback period and NPV showing more than 5 years for return.
Consists of LPG (Liqueifield Petroleum Gas), BBG (Gas Fuel), Misicool (Eco-Friendly CFC Substitute).a) Fuel Gas b) Liquid Petroleum Gas (LPG) Duty diesel Engine Oils Industrial And Marine Engine Oils c) Industrial and Hydraulic Oils d) Oassenger Car Oils e) Powershift will have an easier time getting a comprehensive understanding of the state of the company's business if they use a BMC analysis as their method of choice.In addition, the PT Pertamina Coco and Dodo business model canvas (BMC) has been broken down and analyzed further down in this paragraph.a)BMCSPBU Global Scale PT.Pertamina

Figure 0 . 2
Figure 0.2 Demographic Fuel User in Indonesia

3404 Figure 0.1 Conceptual Frameworks A. Research Method
Mr. Prama Christianta as a Head of Marketing Pertamina Retail and 1 consultant from the Integrated Mr. Bramantyo as a Vice President PT.Istana Kohinoor: a. Identifying the PT.Pertamina Coco & DODO business model through the analysis of nine elements of the business model canvas consisting of, customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure.

PERTAMINA WITH BUILD OPERATE AND TRANSFER STRATEGY 2) COCO with Build Operate and Transfer (BOT) Strategy that perfomed is doing collaboration with land owners in which deal would be 20% profit sharing and a 15 years operation.
After 15 years of operation the whole facility will be given to the land owners.This method will obliterate the needs of land investment which is the major component of CAPEX. ISSN:

Table 0 .
7 US' INDEX Coco with BOT