Govt may replace Pertamina management

The government is considering axing the board of directors and commissioners of state-owned oil and gas company PT Pertamina over the controversial sale of its two supertankers that resulted in a negative image for the company, a minister said on Monday.

State Minister of State Enterprises Laksamana Sukardi said that the government was currently evaluating Pertamina's board of directors and commissioners, and the result would be discussed in the next extraordinary shareholders' meeting.

"Changing the composition of the directors is a common measure during a transition period. If we consider them ineffective, we will fire them. We'll look into it," said Laksamana after a meeting with the Indonesian Chamber of Commerce and Trade (Kadin).

Laksamana, who is also Pertamina's chief commissioner, refused to disclose the new management composition or the date of the shareholders' meeting, pending the results of the evaluation by his office.

He explained that the evaluation followed Pertamina's recent controversial sale of its supertankers, and other complicated problems such as the oil subsidy, restructuring efforts and the lack of transparency.

Earlier this month, Pertamina sold its two tankers, known in the industry as Very Large Crude Carries (VLCC) for US$184 million to Norway-based Frontline Ltd. But the sale has not been without controversy.

While the company's management insists that selling the tankers was better for Pertamina, which is in dire need of cash, some observers and Pertamina's workers union believe otherwise. -- JP