Indonesia Confirms Pertamina CEO As State Firm Pressed To Curb Imports

JAKARTA, Aug 29 (Reuters) – Indonesia’s government on Wednesday confirmed Nicke Widyawati as the permanent chief executive of Pertamina and picked a new upstream director amid pressure on the state-owned energy firm to curb imports, boost refining capacity and biodiesel use.

Widyawati became the acting chief executive officer (CEO) in April after Elia Massa Manik was fired after repeated clashes with the government over fuel price controls, criticism over his handling of an oil spill and for failing to meet mandates on fuel sales.

Widyawati, a former human resources director at the company, is the third CEO at Pertamina in just three years.

“There are three mandates from the government – reduce imports, start development of refineries and implement the B20 biodiesel project,” Widyawati told reporters at a press conference at the State-Owned Enterprises Ministry after her appointment by Indonesian President Joko Widodo.

The B20 project starting next month will require all diesel fuel to contain at least 20 percent biocontent, typically palm oil, to boost palm oil consumption, slash fuel imports, and narrow a yawning current account gap.

Indonesia, one of Southeast Asia’s biggest fuel importers, also aims to reduce its import bill by improving its ageing domestic refineries, but some projects have been delayed because of financing issues.

The government also appointed Dharmawan Samsu, the country head of BP Plc’s Indonesia unit, as Pertamina’s upstream director.

Indonesia was once a major crude oil producer and exporter, and a member of the Organization of the Petroleum Exporting Countries, with output reaching more than 1.6 million barrels per day (bpd) in 1995.

Since then, the international oil majors that had dominated the country’s oil development have scaled back their operations because of uncertainty around regulations. The lack of investment in new reserves and rising fuel demand has caused Indonesia to become a net oil importer.

Pertamina is due in 2021 take over as operator of the Rokan block, Indonesia’s second-largest oilfield, from Chevron , though production is falling.

Tanri Abeng, Pertamina’s president commissioner, told reporters that Samsu was appointed because there was a need for someone with experience from a multinational.

“Blocks that have been given to Pertamina are not easy, very difficult tasks but also an opportunity for us. We will be able to increase our production which is only about a third of the domestic output,” said Abeng.

Pertamina said this week it aims to lift overall oil output to 407,000 bpd in 2019, up from 2018’s goal of 400,000 bpd. Abeng urged the government not to keep shaking up management at Pertamina, which faces frequent interference from the government due to its importance on the economy, particularly at a time when the rupiah currency is under pressure.

(Additional reporting by Bernadette Christina Munthe; Writing by Ed Davies; Editing by Richard Pullin and Christian Schmollinger)

 

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