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