After CEO Dwi Soetjipto and Deputy CEO Ahmad Bambang were removed from their posts at Indonesia's state-owned energy company Pertamina there was some confusion what the real reasons behind this move were. In some local media it was even speculated that the removal of both men was related to a corruption case (something that would not be unimaginable in the case of Indonesia, especially when it involves the government and natural resources). However, the real reason for the removal of Soetjipto and Bambang is, seemingly, simply because they couldn't get along with each other and their poor relationship started to impact on Pertamina's operations.
On Friday (03/02) Pertamina announced the management shake up and it will now wait for the shareholders (the government) to decide on the replacement of incumbent CEO Dwi Soetjipto. For the moment, Gas and Renewable Energy Director Yenni Andayani has been appointed acting CEO. The decision to remove both CEO and Deputy CEO originated from Pertamina's board of commissioners and the Ministry of State-Owned Enterprises. The board announced it will now review the management structure of Indonesia's biggest state-owned company over the next 30 days.
Based on reports in local media, CEO Dwi Soetjipto and Deputy CEO Ahmad Bambang had experienced a series of escalating disagreements over the past couple of months. These conflicts allegedly started to hinder the company's mega projects.
Tanri Abeng, President Commissioner at Pertamina, informed that the troubled relationship between both men was starting to affect operations of Pertamina. For example Deputy CEO Bambang signed a contract regarding gasoline (fuel) imports that was opposed by CEO Soetjipto. In fact, Bambang did not have the authority to sign that contract. However, to make matters more complicated, Bambang was supported by Indonesia's State-Owned Enterprises Minister Rini Soemarno as there had occurred a rift between the latter and Soetjipto.
Soetjipto was appointed as Pertamina's leader by Indonesian President Joko Widodo in 2014, a decision that met resistance because Soetjipto lacked experience in the oil and gas sector. Earlier, Soetjipto had success merging three state-owned cement producers into one entity (Semen Indonesia). This cement company is one of the Indonesian companies that looks beyond the Indonesian borders. In recent years it acquired overseas assets.
Pertamina posted profit of USD $2.83 billion up to the third quarter of 2016. Indonesia's energy sector is largely dominated by this energy company, which basically has monopoly on petroleum imports, while leading the domestic retail sales, as well as owning and operating Indonesia's main refineries. The company is also actively seeking and acquiring overseas assets.