New Pertamina chief to be insider

The government will appoint an official from within state oil and gas firm PT Pertamina to replace current president Widya Purnama following his failure to restructure and reform the company, a top official says as reported by The Jakarta Post on Wednesday.

State Minister for State Enterprises Sugiharto told reporters Tuesday that this was unavoidable as their would be strong resistance to an outsider from the firm?s 20,000 employees.

?Ari Soemarno is one of the candidates,? Sugiharto revealed, referring to the firm?s trading and marketing director, who joined Pertamina in August 2004 after serving as chief executive of the country?s second biggest telecommunications operator, PT Indosat.

Another possible candidate for the top Pertamina post is chief commissioner Martiono, who served as president for 14 months from December 1998. Other names that have been mentioned include the Energy and Mineral Resources Ministry?s director general of oil and gas, lin Arifin Takhyan.

Sugiharto said that without reform, Pertamina?s competitiveness would continue to slide, as reflected in declining crude production.

?Pertamina?s restructuring has failed,? said Sugiharto, citing as examples a massive oil theft operation in Lawe-Lawe, East Kalimantan, the fuel scarcities that hit the country several times last year, and the late auditing of the company?s financial reports.

?The public?s disappointment with Pertamina is reaching a head,? he said, adding that the replacement plan had nothing to do with the deadlocked negotiations between Pertamina and U.S. energy giant ExxonMobil On the operatorship of the Cepu block.

The management reshuffle would take place after Sugiharto?s officials had reviewed Pertamina?s budget and work plan for this year, said Sugiharto

Speaking after the shareholders general meeting on Tuesday, the state minister?s deputy for energy, mining and strategic industries, Roes Aryawidjaja, said that the shake-up of the board of directors had not been raised during the meeting.

Instead, the meeting discussed Pertamina?s 2006 budget and work plan, both of which still needed some improvements, said Roes.

There will be an extraordinary shareholders meeting on March 15 to adopt or reject the work plan, which includes profit, investment and development targets, he added.

President Susilo Bambang Yudhoyono said on March 2 that Pertamina needed an ?overhaul? to increase its level of production and its contribution to the treasury.

Pertamina produced some 67,000 barrels of oil per day (bpd) on its own last year, although total production, if combined with that of its partners, reached some 136,000 bpd. The state firm aims to raise total output to 149,000 bpd this year.

This would account for less than 15 percent of the country?s total production.

Sugiharto was summoned by President Susilo Bambang Yudhoyono to the State Palace late Tuesday, according to sources, to discuss the planned Pertamina reshuffle. (*)