Pertamina dismisses CEO of PT Pertamina Geothermal Energy
Tigalingga, North Sumatra, indonesia (source: flickr/ rio gonzales, creative commons)
Alexander Richter
3 Apr 2013
Quoting delay in geothermal development as main reason, Pertamina has dismissed four executives, among them the CEO of Pertamina Geothermal Energy as reported from Jakarta, Indonesia.
Reported this morning from Jakarta, the Ministry of State-owned Enterprises of Indonesia as sole shareholder of Pertamina has announced the dismissal of “four senior executives due to poor performance by the company’s Board of Executives.”
Among the dismissed executives is the CEO of PT Pertamina Geothermal Energy (PGE),
The other executives were president director, planning and development director, operations director and finance director of Pertamina.
According to Minister Dahlan Iskan, “The four executives had been “slow” and “disappointing” in leading the company, highlighting the stalled development of the Sarulla geothermal power plant in North Sumatra as a key example.
Pertamina Geothermal is a subsidiary of the state-owned oil and gas company Pertamina, which – so the Minister – has failed to meet expectations to constructing geothermal power plants in Indonesia. Slow decision making by the four executives were mentioned as key concerns that lead to the dismissal.
Reported by the Jakarta Post, it is described that “setbacks surrounding the Sarulla project began in 1993 with major issues surfacing regarding its shares and contract ownership in the geothermal power plant, which will have a capacity of 3×110 megawatts (MW), making it one of the largest geothermal plants in Asia.
US-based Unocal North Sumatra Geothermal Ltd. previously held the contract to develop the Sarulla project under a joint operation contract (JOC) with Pertamina, before Unocal was suspended in 1997.
In 2004, PT Geodipa Energy, a joint venture between Pertamina and state electricity firm PT PLN, were selected to lead the
Sarulla project but in the following few years, its bidding was terminated after disagreements over the contract.
In 2007, the Sarulla assets previously belonging to Pertamina were granted to a private player, Sarulla Operation Limited.
Medco Power Indonesia, which is 49 percent owned by publicly listed Medco Energy (MEDC), holds a 37.25 percent participating interest in Sarulla Operation Limited.
Medco Power’s partners in the consortium include US-based Ormat (2.75 percent); Japan’s Itochu (25 percent); and Japan’s Kyushu Electric (25 percent).
To date, the JOC between the consortium and PGE as well as the energy sales contract between Sarulla Operation Limited and PLN have yet to be concluded.
PGE is still demanding incentives from the government for its assets in Sarulla, delaying the discussions as the request is still being reviewed by the Finance Ministry.
“Currently, Pertamina’s upstream director, M Husein, also chief commissioner of PGE, has the duty of leading the company,” Adiatma said in a telephone interview. Commenting on this, Dahlan said that he would let Pertamina, as PGE’s parent company, make the decision over a new director for its subsidiary, but urged them to find “new blood” that would accelerate the company’s performance.
Established in 2006, Pertamina Geothermal currently operates 14 geothermal working areas, of which nine are operated by the company alone, while the other five are run through the JOC mechanism. Of the 1,341 MW of geothermal power plants in Indonesia, more than half are operated by state-owned Pertamina.”
Source: The Jakarta Post
