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Former Jakarta governor makes comeback in prominent Pertamina role

Nikkei Asian Review - November 22, 2019

Shotaro Tani and Erwida Maulia, Jakarta – Basuki Tjahaja Purnama, the former governor of Jakarta who was jailed for blasphemy, looks set to take on the role of president commissioner at Indonesian state-owned oil company Pertamina, following an announcement on Friday by the minister of state-owned enterprise, Erick Thohir.

Whether the former governor, popularly known as Ahok, actually takes up the role will depend on the approval of Indonesian President Joko Widodo and will be decided after a forthcoming meeting of ministries which hold shares in Pertamina. The company is 100% owned by the state. President commissioner is the head of the board of commissioners, which supervises and advises the board of directors.

The appointment marks a huge turnaround for the former Widodo protege – he was Widodo's deputy governor for two years, then replaced him as governor when Widodo became president in 2014 – who suffered a huge fall from grace in 2017.

Purnama was Jakarta's first Christian governor since the 1960s and the first of Chinese ancestry. He was widely credited with taking a hard line against bureaucratic corruption and for his programs to ease Jakarta's traffic problems. However, his outspokenness, as well as his Christianity, was also a source of controversy.

In 2016 he was accused of blaspheming against the Islamic holy text the Quran. The accusation led to massive Muslim rallies later that year, which played a significant part in Purnama losing the Jakarta election to an opposition-backed candidate the following year.

He was subsequently jailed for blasphemy for nearly two years, before being released earlier this year.

Announcing the appointment on Friday, minister Thohir said: "We need someone who is able to break through... We need a break through figure [at Pertamina]".

Purnama will be expected to stamp out corruption at the wealthy and powerful company that was once considered "a state within a state," which previously held the right to grant oil and gas concessions to other companies.

In September, Indonesia's Corruption Eradication Commission (KPK) named a former managing director of Pertamina's trading arm as a suspect in a graft case linked to oil trading.

Indonesia's largest company, long seen as a cash cow for the government, especially during the 1967-1998 era of strongman leader Suharto, has often been criticized as an oversized and ineffective bureaucracy.

It needs reforms now more than ever as Indonesia's oil and gas sector is faced with a crisis over depleting oil reserves, while in the short term the Widodo administration wants to curb costly fuel imports to quell Indonesia's persistent trade and current account deficits against the backdrop of the U.S.-China trade war. The state-run company relies on crude and petroleum products from abroad.

In the meantime, Pertamina faces the huge task of implementing a single-price fuel policy for the entire Indonesian archipelago, as well as acquiring oil and gas blocks in the country from foreign counterparts whose contracts have expired or will do soon.

The company is also involved in the development of mega refinery projects in Indonesia comprising upgrades of four existing refineries and the development of two new ones – with partners including Saudi Aramco, Russia's Rosneft and Oman's Overseas Oil and Gas. These projects are expected to more than double Pertamina's current refinery production capacity from 900,000 barrels per day to 2 million barrels per day.

Source: https://asia.nikkei.com/Politics/Former-Jakarta-governor-makes-comeback-in-prominent-Pertamina-role