Welcome back to Pertamina

Martiono Hadianto, the former short-lived president director of PT Pertamina, the state oil and gas company (14 months since 1998) has recently been elected as the chief commissioner of this company, replacing Laksamana Sukardi, the former state minister of state-owned enterprises (The Jakarta Post, Feb. 2).

The election of Martiono has, at least, two meanings. Firstly, it shows how serious President Susilo Bambang Yudhoyono is about restructuring and rejuvenating state companies and ensuring they work with their resources for the sake of the national interest. And secondly, it gives the chance for PT Pertamina to, as present state enterprises minister Sugiharto said, raise itself to become a world-class integrated oil and gas company (Republika, Feb. 2).

Nearly every Indonesian knows that state companies are normally treated as cash cows by those in power -- for private, not public, gain -- especially by government ministers.

Years of this abuse of power has made the company grow unhealthily and it has been slow to develop and compete with other foreign oil companies, like, for instance, Malaysia's Petronas.

Petronas, once considered by many to be Pertamina's younger sibling has now grown to become a world-class company. Since 2002 it has enjoyed remarkable profits; it became the seventh top world oil and gas company in 2003 and raked a profit of US$5 billion in 2004 (Media Indonesia, Dec. 21). Petronas' strength is conspicuously shown in its headquarters -- the twin towers in Kuala Lumpur; one of the tallest buildings in the world.

Meanwhile, one of the important tasks of its board of commissioners is to direct and supervise the board of directors on the running of the company.

Martiono, and commissioners Umar Said and Muhammad Abduh, as industry insiders will know about the good corporate governance principals applied in Malaysia's Petronas. With this experience, they will hopefully work to make Pertamina profitable and internationally competitive.

It will be interesting to see what happens to Pertamina in the near future in the hands of a new and fresh board of commissioners and an energetic minister.

M. RUSDI, Jakarta