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Jakarta Post

Pertamina chief resigns for Harvard job

  • Khoirul Amin and Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Tue, August 19, 2014   /  08:31 am

Galaila Karen Agustiawan always wanted to pursue a career in academia, but fatherly advice prompted her to shift course and jump into the oil and gas industry, where she eventually became the first woman to lead state oil and gas firm Pertamina.

Having served as Pertamina'€™s president director since 2009 Karen, is also the firm'€™s longest running president director. Just halfway through her second term, however, she decided to accept a position at Harvard University, one of the world'€™s most prestigious universities.

Karen, who will turn 56 in October, will officially retire from Pertamina on Oct. 1, or three weeks before the next government takes office, according to State-Owned Enterprises Minister Dahlan Iskan. Dahlan read on Monday Karen'€™s resignation letter, which stated that she needed to leave her post to focus on taking care of her family and preparing for her Harvard professorship.

'€œShe has repeatedly asked for my permission to resign, but I always rejected her requests and kept her in the company'€™s top position. ['€¦] this time I couldn'€™t keep her any longer,'€ he said, referring to Karen'€™s initial request to forgo a second term. '€œI decided to give her a chance to lead the company for a second term because I believed that it took a longer time for a big company to form a corporate culture of success.'€

Dahlan brushed off speculation that Karen'€™s resignation had any relationship to tension within the government, which under the leadership of President Susilo Bambang Yudhoyono rejected Pertamina'€™s recommendation to increase the price of non-subsidized 12-kilogram liquefied petroleum gas (LPG) canisters.

'€œ[Harvard] has asked her to start teaching soon,'€ Dahlan said.

On Harvard University'€™s website, Karen is listed as one of the experts at the Belfer Center for Science and International Affairs, a permanent research center within Harvard'€™s John F. Kennedy school of government.

Some observers were disappointed with the resignation, saying they would have liked to see Karen partner with the new administration slated to take office on Oct. 20 to design energy sector policies. Pertamina manages the controversial and ballooning fuel subsidies.

'€œThere'€™s got to be something [going on] if she resigns in the middle of her tenure. It is likely related to issues [that came up] during the presidential campaign, when a candidate established an interaction with Bu Karen saying that she would be fired,'€ said Marwan Batubara, an observer at energy think tank IRESS.

Marwan declined to disclose the name of the presidential or vice-presidential candidate he was referring to.

'€œBu Karen might be thinking that it is better to resign now rather than be fired later,'€ he added.

Pertamina spokesman Ali Mundakir rebuffed such speculation, saying that Karen'€™s reasons were personal. '€œShe wants to slow down for now and wants to take care of her family,'€ he said, adding that the resignation letter had been on file since August.

'€œThis is her second term on Pertamina'€™s board of directors and she thinks that this is the right time for regeneration,'€ Ali added. Commissioners will appoint an acting president director who will assume Karen'€™s post until shareholders decide who will become the next president director.

Under Karen'€™s leadership, Pertamina booked a record high revenue of US$71.1 billion last year and a net profit of Rp 25.89 trillion ($2.67 billion) while being ranked one of the world'€™s 500 biggest firms by Fortune magazine.

'€œAs a company running a strategic business, Pertamina has to move on. It is the government'€™s duty to ensure that Pertamina will move on during this critical period when the new government will take office and inherit a state budget with a huge energy subsidy,'€ said Satya W. Yudha, a member of the House of Representatives'€™ Commission VII overseeing energy.


Notable achievements during Karen Agustiawan'€™s six years at PT Pertamina:

* She became Pertamina'€™s first female boss

* In March 2013, Karen was approved for a second term as CEO, making her the first Pertamina CEO for decades to lead the company beyond a single term. Most of her predecessors were replaced before they completed their first five-year term.

* In 2012, Pertamina booked Rp 25.89 trillion (US$2.67 billion) in net profits, up 18.4 percent from a year earlier, which was the highest-ever level in the company'€™s history.

* In 2013, Pertamina became the first Indonesian company to be featured in Fortune magazine'€™s annual Fortune Global 500 list. The list, which ranks global corporations by revenue, placed Pertamina 122nd out of 500 companies after it booked revenue of $70.9 billion in 2012.

* In 2012, Forbes put Karen at the top of its '€œAsia'€™s 50 Power Businesswomen'€, while in 2013, Fortune Global put her in sixth place on its '€œ50 most powerful women in business'€ list.