Pertamina should no longer handle production contracts

The appointment of Baihaki Hakim, the former chairman of PT Caltex Pacific Indonesia (CPI) at the helm of Pertamina has brought new hopes for the rebirth of the state oil company into an independent, professional and respectable oil giant in the region.

Arifin Painogoro, the chairman of Medco Energi Corporation, sees Baihaki as the right man to change the image of the state oil company, once known as the symbol of corruption in the country, lead its way to become a business oriented corporation.

For the purpose, according to Arifin, who is also a senior executive of the Indonesian Democratic Party for Struggling (PDI-P), Pertamina should focus its activities on oil and gas exploration and production. The company's role as the sole representative of the government in awarding oil and gas production contracts and in supervising foreign and local oil contractors should be immediately abandoned.

"If Pertamina quits all its non-business oriented job such as in the contract awarding activities, Baihaki will be able to free him self from being trapped in another cronyism. Being a former president of Caltex, Baihaki will face tough time whenever it deals with the oil giant, which controls most of the oil reserves in the country. Charges of being biased and partial could not therefore be avoided," he said.

Former Minister of Mines and Energy Kuntoro Mangkusubroto submitted a new oil bill to the House in early 1999 to lift all the privileges so far given to Pertamina. But unfortunately, the bill was turned down. (*)