After installing a new president director at one of the weakest links in the chain of state firms, PT Perusahaan Listrik Negara (PLN), the government is set to replace top executives at the biggest contributor to state revenues, oil and gas producer PT Pertamina.
The State SOE Minister Mustafa Abubakar confirmed the plan on Monday, saying that the process to replace Pertamina executives was under way. The reshuffle may include a replacement for president director, Karen Agustiawan.
There is media speculation that Pertamina’s finance director Ferederick S.T. Sihaan is the strongest contender to replace Karen, who only been in the top seat since February last year.
Ferederick holds a master’s degree in business management from the Asian Institute of Management, Manila, in the Philippines.
His previous working experience included a period as a project engineer with Unocal Indonesia, as Vice President of investment banking for PT Sigma Batara, associate director for PT Dinamika Usaha Jaya and managing director of investment banking for Indo Premier Securities.
The minister acknowledged that there were 24 candidates for Pertamina director posts taking part in a series of tests, and the results would be announced this month. However, he refused to comment on the speculation.
“No, it is still ongoing. The current president director is still active. Please, do not speculate,” Mustafa told reporters.
Karen is the first woman to lead the oil and gas company. She is a reform minded leader and is known for her uncompromising principles in sticking to the rules, considered ideal for a company planning to go public and enter the bourse.
She became famous for infuriating members of the House of Representatives after she sent a letter – only a few weeks after she was elected as president director -- to the House commission overseeing the energy sector, questioning the efficiency of a session between the lawmakers and Pertamina.
Ugan Gandar, president of Pertamina’s workers union, said the government had to appoint new directors in order to support Karen’s agenda to improve the company.
“If the government keeps these directors, it will be difficult for Karen,” he said as quoted by Antara state news agency.
Ugan argued that Pertamina’s performance weaknesses were obvious at the financial, operational and administrative levels, including its industrial relations.
He also said new directors must uphold “clean corporate values”.
“Lately, the performance of the directors has not projected Pertamina as a world-class company,” he claimed.
Pertamina is easily the country’s most profitable state company, contributing about half of the total dividends collected from all state companies annually. The company is expected to pay Rp 13 trillion in dividends to the government from its 2008 performance.
Pertamina relies heavily for revenue on its two upstream subsidiaries, Pertamina EP and Pertamina Hulu Energi, which manage and develop the company’s oil and gas upstream portfolios through various commercial partnership schemes.
