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Sudirman shakes up notorious energy oversight
Sudirman Said
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Sudirman Said. JP/Jerry Adiguna
When President Joko 'Jokowi' Widodo announced the appointment of ex PT Pindad president director Sudirman Said as his energy and mineral resources minister, he said: 'He is a reliable business manager and an anti-corruption activist ['¦] This [energy and minerals] is a big sector, I leave this strategic sector to you.'
The oil and gas sector accounts for about 15 percent of the country's gross domestic product (GDP) and more than 20 percent of the state's revenues last year, quite apart from mining, which also falls under the jurisdiction of the Energy and Mineral Resources ministry. But the sectors are notorious for corruption. Indeed previous minister Jero Wacik has been declared a suspect in a number of alleged graft cases involving the ministry and former Upstream Oil and Gas Regulatory Task Force (SKKMigas) chief Rudi Rubiandini was caught red-handed accepting bribes.
Restoring public trust in his tainted ministry was the main item on Sudirman's agenda during his first days in office. As he said: 'Enough is enough. Let's end the improper things of the past. Do not disturb my team. We are here to clean up.' In the second week of his tenure he sacked the oil and gas director general, who was believed to be delaying some strategic decisions. He also introduced an auction-like mechanism to apply for top positions at the ministry and for the position of National Energy Council secretary-general.
During his first few weeks Sudirman also established an independent team to assess all the details of the oil and gas industry that have hampered potential growth and efficient expansion in the net oil-importing country, which was once a member of the Organization of the Petroleum Exporting Countries (OPEC).
The team, dubbed the 'oil and gas reform team', is chaired by outspoken economist Faisal Basri, and has recommended eliminating the usage of RON 88 gasoline (Premium) and structural reform of the function of Pertamina Energy Trading Limited (Petral). It is currently working on recommendations to reform SKK Migas.
Sudirman was also involved in many strategic decisions, which included scrapping the ballooning fuel subsidies that have resulted in almost Rp 200 trillion savings in the state budget for infrastructure projects, inking an oil import, export and refinery deal with Angola and the installment of many new faces in the energy sector.
Former senior official at the Corruption Eradication Commission (KPK) Amien Sunaryadi was appointed as SKKMigas chief; former Semen Indonesia president director Dwi Soetjipto as Pertamina's new president director; as well as former head of the nation's most profitable bank BRI, Sofyan Basir, as new president director of PLN; and former KPK leader Chandra Hamzah as president commissioner of PLN; among others.
In the upstream oil and gas sector, Sudirman also managed to decide on four expired or soon-to-be expired oil and gas block contracts. The ministry has also made the decision in principle that the Mahakam block, which is operated by Total E&P Indonesie, will be handed over to Pertamina. Expiring blocks have been an issue in the industry because the previous administration created uncertainty by making decisions only on the day that the contracts expired.
Despite all of his achievements, Sudirman, the co-founder of the Indonesia Transparency Society (MTI), needs to prove further that his moves, including changes in top posts in his ministry, are effective and influential.
'We have not seen significant results. He has appointed new faces but they have no experience in their respective sectors. They have the integrity but still need to show achievements in the new posts like they have shown in the past,' energy and mining law expert Bisman Bhaktiar said. 'Also, at the beginning of the establishment of the oil and gas team [headed by Faisal Basri], discussions on the oil and gas mafia were very loud. However, we haven't heard any further updates or moves on the issue,' he added. ' JP/Raras Cahyafitri
