Kardaya told to improve BPMIGAS

Indonesian oil and gas industry put high hopes on Kardaya Warnika, the newly installed BPMIGAS chief to enhance Indonesian upstream investment climate by improving service, cutting red tape and building mutual trust between the agency and industry.

Industry players that were contacted by Petromindo.Com said that Karadaya had a tough job to enhance investment climate amid Indonesia?s continually dwindling oil production.

? Kardaya must be able to cut unnecessary red-tape in BPMIGAS that gives headache to contractors,? said Supramu Santosa, president of local firm Star Energy, which operates a producing block and interest in several exploration blocks in Indonesia.

He added that Kardaya must be able to build trust between BPMIGAS and contractors. ?Contractors are BPMIGAS business partner, BPMIGAS should trust the contractors and not hassling them with supervision of minor details that often resulted costly delay in decision making and operations,? he said. ?Kardaya has the capacity and ability to make the change in BPMIGAS,? he added.

Another industry source which has been involved in Indonesian oil and gas industry for more than 20 years said that BPMIGAS had been unable to function properly as regulatory and supervisory body due to lack of decision making, coordination and political interest that often cloud BPMIGAS? judgments.

?Thus far, BPMIGAS has failed to create efficiency in the industry, instead, the body is creating more unnecessary red tape. The decision making process in BPMIGAS is also very unclear and often meddled by political and economic interest of some people who have power in the government and parliament,? said the source who declined to reveal identity. ?Pertamina MPS was much better compared to BPMIGAS. Instead of streamlining the organization BPMIGAS adds more and more unqualified personnel,? he said. Pertamina MPS was Indonesian upstream supervisory body prior to BPMIGAS formation in 2002.

The source also citing lack of coordination and rivalry among BPMIGAS? top personnel. ?A deputy was more powerful than BPMIGAS chairman or vice-chairman that he can annul a decision that had been made,? the source said.

The source agreed that Kardaya might be the right man to fix the problem. ?He is smart and ready to make unpopular decision. He has thorough understanding about the industry. But will he be brave enough to make radical change within his organization at the risk of conflicting with powerful people?? said the source.

The answer to that question remains to be seen. (alex)