Pertamina management reshuffles, Nicke remains at the top
Despite her failure in securing a partnership for the Cilacap refinery after Saudi oil giant Aramco walked away from the project, state-owned energy holding company Pertamina president director Nicke Widyawati has kept her position as the number one person in the company. State-Owned Enterprises (SOEs) Minister Erick Thohir told Nicke to sell Pertamina’s two upstream subholding companies through an initial public offering (IPO) of shares in two years.
Minister Erick in the latest Pertamina management reshuffle on June 12 slashed the number of directors in the company from 11 to only six. This is in line with the SOEs Ministry’s road map to make Pertamina function as the ultimate holding company for all state-owned oil and gas companies. The cut in the number of directors would improve the company’s efficiency by refocusing Pertamina’s management role on corporate management efforts while operations will be handled by the subholdings.
In the new board of directors, three directors keep their old position, namely Nicke, finance director Emma Sri Martini and human capital director Koeshartanto. The former logistics, supply chain and infrastructure director, Mulyono, and asset management director M. Haryo Yunianto stay as part of management, now as integrated logistics and infrastructure director and corporate services director, respectively. A newcomer on the board is strategy director Iman Rachman, former president director of state asset management firm PT Perusahaan Pengelola Aset (PPA).1
Soon after she was reappointed to her current position, Nicke appointed 36 directors in five subholdings on June 13 to accelerate the operational transition from Pertamina to the subholding companies. The former directors who are not in Pertamina’s current management are now directors and commissioners of the new subholdings.
Erick set the IPO of two upstream subholdings as Nicke’s key performance indicators for the next two years. The IPO is expected to collect funding that is much needed for upstream projects, such as Pertamina's takeover of the Rokan Block in Riau from United States oil giant Chevron, which is set to finish in 20212, including refinery development projects whose progress took a big hit after Aramco left Cilacap and Oman oil and gas company Overseas Oil and Gas LLC (OOG) left Bontang.
Following the SOEs Ministry’s road map to form an oil and gas holding company, Nicke on June 13 inaugurated five subholding companies along with their 36 directors. The subholding companies are upstream subholding PT Pertamina Hulu Energi, gas subholding PT Perusahaan Gas Negara, refinery and petrochemical subholding PT Pertamina International Refinery, power and new and renewable energy (NRE) subholding PT Pertamina Power Indonesia, and commercial and trading subholding PT Patra Niaga. In addition, there is also a shipping company, PT Pertamina International Shipping.
Former megaprojects and petrochemical director Ignatius Tallulembang is now the CEO of PT Pertamina International Refinery. He will be assisted by former refinery director Budi Santoso Syarif as deputy CEO. Meanwhile, former investment and risk management director Heru Setiawan is now the CEO of PT Pertamina Power Indonesia and former marketing director Mas'ud Khamid is now the CEO of PT Patra Niaga. Lastly, former upstream director Dharmawan H. Samsu and corporate marketing director Basuki Trikora Putra are now chief commissioners in the subholding companies.3
Before Pertamina's management change and restructuring was announced, a source said the fight for the number one seat in Pertamina had centered on a dispute between former president Megawati Sukarnoputri's second son Muhammad Prananda Prabowo and son-in-law Hapsoro “Happy” Sukmonohadi.
The source said before the management change, Happy had proposed Hanung Budya Yuktyanta, Pertamina’s former marketing and commerce director from 2012 to 2014. Hanung was also the president director of Petral, a subsidiary of Pertamina that handles oil imports. The endorsement of Hanung was also supported by former chief of the State Intelligence Agency (BIN) A.M. Hendropriyono.
Meanwhile, Prananda, through the Indonesian Democratic Party of Struggle’s (PDIP) secretary-general Hasto Kristiyanto, still backs Nicke to remain as president director. To secure Nicke’s position, Hasto reportedly called Pertamina chief commissioner Basuki “Ahok” Tjahya Purnama, the former governor of Jakarta.
A high-ranking government official said Nicke’s position remained safe because the SOE Ministry had not succeeded in finding an eligible replacement, either from inside Pertamina or from outside the company. The SOE Ministry decided to retain Nicke to avoid causing turmoil, as political parties and businesspeople have long sought to secure the position of president director in the state-owned company with the most assets in the country for their people. In addition, Erick said Nicke’s performance as president director had not been bad.
Other sources said Happy had still succeeded in securing a position for his man in a Pertamina subholding. The person he endorsed was Budiman Parhusip, who was appointed as CEO of upstream subholding PT Pertamina Hulu Energi. Budiman was previously the president director of PT Rukun Raharja, a company belonging to Happy.
Before Happy proposed Budiman, the candidate to become the CEO was Adriansyah, a former president of gas producer Pertamina EP. Adriansyah was supported internally within Pertamina because he used to be the president director of Pertamina EP Cepu in East Java. However, Adriansyah’s name was crossed off the list after Happy “assigned” Budiman.
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