VZCZCXRO4209
RR RUEHCHI RUEHDT RUEHHM
DE RUEHJA #3162/01 0690020
ZNR UUUUU ZZH
R 100020Z MAR 06
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 0910
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHKO/AMEMBASSY TOKYO 9675
RUEHBY/AMEMBASSY CANBERRA 9178
RUEHBJ/AMEMBASSY BEIJING 3313

UNCLAS SECTION 01 OF 02 JAKARTA 003162 
 
SIPDIS 
 
DEPT FOR EAP/IET, EB/ESC/IEC 
DEPT PASS OPIC, EXIM, TDA 
DOE FOR CUTLER/PI-32 AND NAKANO/PI-42 
COMMERCE FOR USDOC 4430 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EPET ENRG EINV PREL PINR ID
SUBJECT: INDONESIA - GOI FINALLY PURGES PERTAMINA BOARD 
 
 
¶1.  (SBU) On March 8 the Government of Indonesia (GOI) 
replaced the head of state oil and gas company Pertamina 
after more than a year of unfulfilled promises to shake up 
Indonesia's most powerful state-owned enterprise.  Ari 
Sumarno succeeds Megawati-era appointee Widya Purnama as 
President Director.  Sumarno, formerly director of trade and 
marketing, has won the respect of colleagues throughout the 
industry.  One expatriate oil executive told us that he is a 
"straight shooter" and someone with whom foreign energy 
companies can do business.  The change at the top is a clear 
signal that the GOI wants to break the four-year stalemate 
with ExxonMobil over the Cepu oil and gas field in Central 
Java, according to many local observers.  Sumarno told the 
local press shortly after his appointment, "The most 
important thing is to increase the Cepu block production." 
Iin Arafin Takhyan, the top civil servant for oil and gas in 
the energy ministry, moves over to be number two at 
Pertamina as part of the leadership changes. 
 
¶2.  (U) Below is a list of the new management at Pertamina 
and biographic information for the key newcomers. 
 
Pertamina New Management 
------------------------ 
 
Table 1: New and former Members of the Board 
-------------------------------------------- 
                                      Former 
Position              New Officer     Officer 
--------------------------------------------- ----- 
President Director    Ari H Sumarno  Widya Purnama 
Vice President        Iin Arifin     Mustiko Saleh 
                      Takhyan 
Directors 
- Upstream            Sukusen        Hary Kustoro 
                      Soemarinda 
- Refining            Suroso         Suroso 
                      Atmomartoyo    Atmomartoyo 
- Trade and Marketing Achmad Faisal  Ari H Sumarno 
- General Affairs and Sumarsono      Suprijanto 
  Human Resources 
- Finance             Frederick ST   Alfred 
                      Siahaan        Rohimone 
 
 
Pertamina also has a Board of Commissioners, who represent 
the GOI's ownership interest in the firm and act as advisors 
to the directors.  The GOI made only one change to this 
board with the appointment of J. Purwono, a staffer at the 
State-owned Enterprise Ministry for investment to replace 
Iin Arifin Takhyan. 
 
Biographic Information 
---------------------- 
¶3.  (U) Ari Sumarno, former Director of Marketing and 
Trading for Pertamina, replaced Megawati-era appointee Widya 
Purnana.  Sumarno is the son of General Sumarno, former 
Jakarta governor in the 1960s and older brother of former 
Minister of Industry and Trade Rini Soewandi.  Sumarno 
worked as an engineer at the Bontang Liquified Natural Gas 
(LNG) plant in East Kalimantan for 16 years before moving to 
Pertamina's headquarter as a special staffer in the 
downstream directorate in 2001.  He was appointed president 
director of the company's Hong Kong-based trading 
subsidiary, Pertamina Trading Ltd (Petral) in October 2003. 
Sumarno was promoted to Director of Marketing and Trading in 
¶2004.  He was born in Yogyakarta in 1948 and holds a degree 
in chemical engineering from Aachen University, Germany. 
¶4.  (SBU) Local magazine Kompas reported in 2004 that 
Sumarno received a reprimand in the form of a salary cut in 
1995 for violating bidding regulations when he was chairman 
of the bidding team for the Bontang LPG Plant project. 
According to this story, an audit conducted by the Finance 
and Development Control Agency BPKP) revealed that Pertamina 
incurred Rp 1.2 billion in losses (approximately USD 
130,000) from the bids in question.  Sumarno's former deputy 
at Petral, Zainul Arifin, has been detained on corruption 
charges since December 2005. Zainul allegedly deposited USD 
9 million of company funds in a Singapore Bank without board 
approval.  Zainul has alleged that Sumarno was fully aware 
of Zainul's actions, a charge Sumarno strongly denies. 
 
JAKARTA 00003162  002 OF 002 
 
 
¶5.  (U) Iin Arifin Takhyan was the Director General of Oil 
and Gas in the Ministry of Energy and Mineral Resources and 
a Pertamina commissioner before his appointment as vice 
president replacing Mustiko Saleh.  From 1998 to 1999, 
Arifin was the Director of Exploration and Production at the 
Directorate of Oil and Gas and Indonesian representative to 
the Organization of Petroleum Exporting Countries.  In 2001, 
he was promoted to director of Production Sharing Contracts 
(PSC) management in Pertamina.  He became Director General 
of Oil and Gas in 2004. Arifin was born in Tasikmalaya, West 
Java in 1952.  He has a degree in petroleum engineering from 
Bandung Institute of Technology.  He also studied geothermal 
energy technology and environmental economics at the 
University of Auckland, New Zealand. 
 
PASCOE