TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Analysis: Political appointees helm Pertamina amid grandiose energy ambitions
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
(Photo: Courtesy of Pertamina)
G
erindra politician Simon Aloysius Mantiri was recently appointed as the new CEO of state-owned oil and gas holding company Pertamina, followed by two other Gerindra politicians on the board of commissioners, one of them as chief commissioner. Their appointments reflect a change of Pertamina’s leadership from being led by professionals to now being dominated by political figures, which raises concerns as Pertamina faces heavier challenges with declining oil production amid President Prabowo Subianto’s energy self-sufficiency target.
Simon, Gerindra deputy secretary and also deputy treasury of the Prabowo-Gibran Rakabuming Raka campaign team (TKN) for the 2024 presidential election, replaced Nicke Widyawati who had served as Pertamina CEO for six years. Before being appointed as CEO, Simon had been Pertamina’s chief commissioner since June 2023, replacing Basuki “Ahok” Tjahaja Purnama who stepped down from the position to campaign for rival presidential candidate Ganjar Panowo of the Indonesian Democratic Party of Struggle (PDI-P).
After Simon got promoted as CEO, Pertamina’s president commissioner position was given to another Gerindra politician Mochamad Iriawan, a retired police commissioner general and a former chief of the Indonesian Soccer Association (PSSI), and a member of the Prabowo-Gibran TKN advisory board. In addition, Prabowo-Gibran TKN deputy strategic coordinator Condro Kirono was appointed as Pertamina’s independent commissioner.
The appointment of politicians, especially those of the ruling Gerindra Party has raised concerns among analysts as Pertamina is currently under great pressure to support Prabowo’s energy self-sufficiency target. During his inaugural speech, President Prabowo asserted his administration would achieve energy self-sufficiency by increasing the use of biofuels, a blend of fossil fuels with plantation products like crude palm oil (CPO), cassava, corn and sugarcane. Prabowo did not mention reversing the declining oil and gas production, though.
To achieve the target, Prabowo will focus on strengthening two state-owned enterprises (SOEs), Pertamina and state-owned electricity company PLN. While Pertamina is led by Gerindra politicians, PLN is led by PDI-P politician Darmawan Prasodjo, who was appointed by president Joko “Jokowi” Widodo, who was then a member of the PDI-P. Like Jokowi, Darmawan may not anymore be affiliated with the PDI-P.
Regarding PLN, Prabowo sees no problem in meeting electricity needs as the country has abundant coal and renewable energy sources, especially hydro and geothermal. As for Pertamina, Prabowo sees the problem in the high imports of oil and liquefied petroleum gas (LPG). Therefore, Prabowo told Pertamina to reduce and eventually stop importing oil by increasing production of biofuels and seeking alternative financing without relying on fiscal incentives and debts.
Indonesia has been a net oil importer since early 2004, when oil output was at 1.13 million barrels per day (bpd). Since then Indonesia’s oil lifting has been declining consistently to only 576,110 bpd in the first half of 2024. In fact Indonesia’s oil output has been declining since 1991, when output reached one of its peaks at 1.67 million bpd. While Indonesia’s oil lifting has been declining, domestic demand for fuels has increased, resulting in the higher demand for crude, now at 1.6 million bpd, most of which is imported.
