Pertamina president director Nicke Widyawati, left, again skipped questioning on Thursday (03/09) in a high-profile graft case involving the Riau-1 coal-powered power plant project. (Antara Photo/Pertamina/Adityo Pratomo)

Gov't Appoints New Pertamina CEO, Presses to Curb Oil Imports

AUGUST 30, 2018

Jakarta. The government on Wednesday (29/08) appointed Nicke Widyawati as chief executive of Pertamina and picked a new upstream director amid pressure on the state-owned oil company to curb imports, boost refining capacity and biodiesel use.

Nicke became the company's acting chief executive in April after Elia Massa Manik was fired, following repeated clashes with the government over fuel price controls, his handling of an oil spill and failing to meet mandates on fuel sales.

Nicke, a former human resources director at the company, is the third chief executive 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," Nicke told reporters at a press conference at the State-Owned Enterprises Ministry after her appointment by Indonesian President Joko "Jokowi" 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's Indonesia unit, as Pertamina's upstream director.

Indonesia was once a major crude oil producer and exporter, 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 Dharmawan was appointed because there was a need for someone with an international experience.

"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 Tanri.

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.

Additional reporting by Bernadette Christina Munthe.