Indosat CEO named new Pertamina president

Indosat CEO named new Pertamina president

Fitri Wulandari, Jakarta

The government appointed on Wednesday Widya Purnama as the new
president director of the embattled state oil and gas firm PT
Pertamina, in what appears to be a damage control measure amid
recent scandals that may affect incumbent President Megawati
Soekarnoputri's reelection bid.

Widya, who was the chief executive of publicly listed
telecommunications firm PT Indosat, succeeds Ariffi Nawawi, who
has led Pertamina for a tumultuous 11-month period. All the
other members of the company's board of directors were also
replaced except for finance director Alfred Rohimone.

"This (reshuffle) is part of a restructuring program. It is
expected to boost the transparency and performance (of
Pertamina), and make the management more solid," a deputy at the
Office of State Minister of State Enterprise Roes Aryawijaya said
after the induction ceremony.

State Minister of State Enterprises Laksamana Sukardi made the
restructure public a week ago. He is also planning to change the
management of flagship carrier Garuda Indonesia.

Pertamina, which for decades has been the biggest money-making
machine for corrupt government officials and politicians, has
been mired in financial difficulties and scandals during the past
few months, with cash flow difficulties, the controversial sale
of its two giant oil tankers, well-publicized fuel shortages in
some parts of the country, and cases of alleged corruption. Some
analysts say these high-profile business problems could affect
the reelection bid of Megawati, who has been trailing behind her
former chief security minister Susilo Bambang Yudhoyono ahead of
the September runoff.

Megawati has so far scored low in several opinion polls due to
her poor performance in combating deep-rooted corruption.

The move by the previous Pertamina management to sell two Very
Large Crude Carriers (VLCCs) in June for US$184 million to the
Norway-based Frontline Ltd. drew protests from several parties,
including lawmakers and company employees, who said the company
would have benefitted more if it owned its own tankers to ship
the oil. But Pertamina management has insisted leasing the
vessels from third parties would be cheaper, something challenged
by some independent experts.

The Anticorruption Commission (KPK) is currently investigating
alleged irregularities in the transaction.

During the past couple of months, Pertamina has also been
under attack for fuel shortage problem plaguing some regions.
This is a politically sensitive issue particularly during the
current election year.

Widya said after the appointment ceremony his immediate
priority was to secure fuel distribution in the country.

"If there are any perpetrators smuggling fuel (out of the
country), we'll just shoot them!," Widya said.

The rampant smuggling of the heavily subsidized fuel to
neighboring countries has been blamed for fuel shortages at home.

"I have come here to improve Pertamina. I will make Pertamina
the best company in this region (Southeast Asia)," Widya said,
who said he had learned of his appointment via a hand phone text
message from Laksamana.

After losing its decade-long monopoly and regulatory role,
Pertamina recently changed its status into a limited liability
company and will eventually compete with private industry in the
oil and gas sector.

Widya, 50, started his career as a low-ranking employee at
Indosat before becoming president of the company in 2002. He is
the second president of Pertamina to come from outside the
company.

Other new members appointed to the Pertamina's board are
Muskito Saleh, in the new post of vice president, Hari Kustoro,
the upstream director, and Suprijanto, the human resources and
general affairs director.

Suroso Atmomartoyo and Arie Soemarno have been appointed as
processing director and marketing director respectively. Arie,
who is the brother of Minister of Trade and Industry Rini M
Soewandi, is the president of Petral, the Singapore-based trading
arm of Pertamina.