Pertamina leadership overhauled in effort to reduce Indonesian oil imports

JAKARTA (Bloomberg) - Indonesian President Joko Widodo ordered an overhaul of the management of state-owned oil giant PT Pertamina, as the former OPEC member seeks to reduce crude oil imports to rein in the current-account deficit.

Former Jakarta Governor Basuki Tjahaja Purnama, who served a two-year prison term on blasphemy charges, will become president commissioner of Pertamina, while Emma Sri Martini, chief executive officer of state-owned PT Telekomunikasi Selular, will be chief financial officer, according to State-Owned Enterprises Minister Erick Thohir.

Purnama, known as Ahok, fit Widodo’s criteria of someone who can help Pertamina’s board of directors reduce oil and gas imports, Thohir said. A meeting Monday of Pertmina’s shareholders is set to ratify the executive changes, which will also see SOE Deputy Minister Budi Gunadi Sadikin appointed Pertamina’s vice president commissioner, Tempo reported.

Widodo has ordered his cabinet to take steps to process more resources domestically to boost export revenue and, within three years, plug a current-account deficit hovering near 3% of gross domestic product. That gap widened to a four-year high last year and remains a key vulnerability for Southeast Asia’s largest economy.

The world’s largest palm-oil producer also has raised the required blend of palm biodiesel to 30% from 20% starting next year, which should help lower imports of fossil fuel. Indonesia’s production of oil and gas has been dropping as fields age and the country struggles to attract foreign investment.

In recent years Pertamina has focused on taking over oil and gas fields from foreign firms whose licenses have expired, in addition to spending hundreds of million of dollars drilling new wells. The company plans to build about a half-dozen new refineries over the next decade to double refining capacity and trim imports of oil products.

Indonesia’s daily crude oil production is about 750,000 bbl, while total consumption is estimated at 1.3 MMbbl to 1.4 MMbbl a day, government data show.

As part of the Pertamina reshuffle, Finance Director Pahala Mansury will be moved to state-owned lender PT Bank Tabungan Negara as president director, the SOE ministry said. Chandra Hamzah, former chief of Indonesia’s anti-corruption agency, was named as the lender’s new president commissioner.