Pertamina CEO to be replaced

Pertamina CEO to be replaced

The government is expected to reshuffle state-owned oil and gas
firm Pertamina's top management in the near future as part of a
program to privatize the national oil and gas company in 2006,
according to an official.

The official, who declined to be named, told Dow Jones
Newswires on Tuesday the management changes could be announced as
early as next week.

He added that Hary Purnomo, an ex-director at Pertamina, and
Iin Arifin Takhyan, who now serves as oil and gas director
general at the Ministry of Energy and Mineral Resources and also
briefly sat on Pertamina's board of directors, are tipped to
replace Baihaki Hakim as president.

President Megawati Soekarnoputri in June signed a decree
transforming Pertamina into a limited liability company to help
it compete with foreign oil and gas companies as the government
had ended Pertamina's monopoly in Indonesia's oil and gas
industry in late 2001.

An audit conducted at Pertamina after President Soeharto's
fall in May 1998 found corruption and inefficiency caused the
company an estimated US$4.7 billion in losses from 1996 to 1998.

Rumors that Baihaki would be replaced had emerged since the
past year since the former president of PT Caltex Pacific
Indonesia undertook a major reform program to boost efficiency at
Pertamina.

According to one theory, businesspeople who stand to lose
profitable rent-seeking businesses in the reform drive launched
by Baihaki have been lobbying for the change.

Another possibility is that Megawati simply is not
comfortable with Baihaki, who was appointed in 2000 by then
president Abdurrahman Wahid.

Reports earlier said that State Minister for National
Development Planning Kwik Kian Gie was the only member of
Pertamina's board of commissioners who wanted Baihaki to maintain
his job. But the reshuffle is the prerogative of the President.
-- JP