Changing of the Guard at Pertamina

Jakarta Globe, Yessar Rossendar, February 19, 2010

Indonesian State Enterprises Minister Mustafa Abubakar on Friday retained Karen Agustiawan as the head of a new board of directors for PT Pertamina and tasked the state-owned oil and gas company with boosting output to help the country meet its rising fuel needs.

The vice presidential position was scrapped in the new lineup and several new members, mostly from within the company, now sit on the board. A new directorship to handle investment planning and risk management was also created.

“We hope that the new board of directors under Karen will be more solid and able to adapt to the demands of the industry,” Mustafa said after the board’s inauguration on Friday.

He said the new board should prioritize three programs, all aimed at increasing energy production. It should find as many new fields as possible, acquire existing ones and rejuvenate Pertamina’s refineries and downstream infrastructure.

Pertamina’s former finance director, Ferederick Siahaan, is the new director in charge of investment planning and risk management.

Karen said the position was needed to support the company’s operations with well-managed investment and risk management.

“We will make many acquisitions, especially in the upstream sector,” she said.

Mustafa said he was confident that under Ferederick, “Pertamina’s investment will not be misplanned in the future.”

He said the new director would function like the government’s National Development Planning Agency (Bappenas).

Fabby Tumiwa, the executive director of the Institute for Essential Services Reform, saw the establishment of the new director position as a positive sign, because previously the work had only been handled by a unit in Pertamina and not at the board level.

“With a higher position to handle the task, I think Pertamina’s investments will be better,” Fabby said.

The company filled the previously vacant upstream director position with Bagus Setiardja, who was formerly the president director of subsidiary PT Pertamina Hulu Energy.

The previously combined general and human resources directorship has been separated, with Rukmi Hadihartini as director for human resources and Waluyo as general resources director.

Edi Setianto becomes director for processing, replacing Rukmi, while Djaelani Sutomo, the president director of another Pertamina subsidiary, PT Pertamina Tongkang, is now director for marketing and business.

Ferederick’s former position as finance director was filled by an outside appointee — M Afdal Bahaudin, previously the president director of insurer PT Tugu Pratama Indonesia.

The position of president commissioner and one of the regular commissioner positions remain unfilled.

“It is our plan to prioritize and assign the board of directors first, but we will appoint the people for the positions as soon as possible,” Mustafa said.

Fabby said the position of president commissioner should be filled by someone who understands the oil and gas industry, has good integrity and who does not have any conflicts of interest.

“Pertamina is a company that handles trillions of rupiah, so the position is crucial,” Fabby said.