Govt to replace Pertamina directors before Cepu signing

Govt to replace Pertamina directors before Cepu signing

Rendi A. Witular, The Jakarta Post, Jakarta

The government will replace state oil and gas firm PT Pertamina's
management board later this month due to "poor performance".

The mass dismissal will take place prior to September's
signing of a contract between Pertamina and ExxonMobil Corp. on
the Cepu block.

"The Office of the State Minister of State Enterprises is
currently screening several candidates to fill in some posts at
the management. We expect the reshuffle within this month,"
Coordinating Minister for the Economy Aburizal Bakrie said at the
Presidential Palace on Wednesday.

He refused to elaborate on the reasons behind the replacement,
but State Minister of State Enterprises Sugiharto said it was
closely related to Pertamina's poor performance in addressing the
company's problems.

"The reshuffle should enhance Pertamina's performance, which I
believe is far below my expectations. It is not merely about the
Cepu contract, it is a combination of many things which I am not
happy about," he asserted.

Apart from recent fuel shortages, Pertamina's management had
refused to go along fully with a key memorandum of understanding
(MOU) signed between ExxonMobil and the government in developing
the oil-rich Cepu block, located on the border of Central Java
and East Java provinces.

Pertamina president director Widya Purnama earlier asked the
government to let Pertamina replace ExxonMobil as the operator of
the block for a bigger split of the output -- a violation of the
MOU agreed upon on June 25.

Exxon and a government-sponsored negotiating team agreed on
the deal that called for the stakeholders -- Pertamina, Exxon and
local administrations -- to split 15 percent of the output and
the government 85 percent if oil prices averaged over US$45 in a
year.

If oil falls to below $35 it would be a 30-70 split.

The MOU also marked the end of a four-year dispute between the
government and ExxonMobil.

Widya took over Pertamina's top job after being appointed by
then President Megawati Soekarnoputri a year ago to succeed
Ariffi Nawawi.

Although several names for the top jobs at Pertamina have
begun circulating around the Presidential Palace, neither
Aburizal nor Sugiharto would reveal the candidates, explaining
that the matter was deemed "sensitive".

The names include the Ministry of Energy and Mineral
Resources' director general of oil and gas Iin Arifin Takhyan,
Pertamina incumbent president commissioner Martiono and the Oil
and Gas Regulatory Implementing Body (BP Migas) chairman Tubagus
Haryono.

"The candidates will be from outside Pertamina or the
company's former top executives. We are still selecting them and
hope some names will be recommended soon to the final assessment
team (TPA)," said Aburizal.

The team is a special forum with its members comprising of
President Susilo Bambang Yudhoyono, Vice President Jusuf Kalla,
Chief of the National Intelligence Agency Syamsir Siregar,
Cabinet Secretary Sudi Silalahi and other related ministers.

Members of the TPA are selecting candidates for top jobs in
the government, the military, the police and state enterprises.