JAKARTA -- Indonesia's Ministry of State-Owned Enterprises on Friday unexpectedly announced the dismissal of Pertamina's two top executives, including President and CEO Dwi Soetjipto.
The ministry said it was acting on a "leadership problem."
The ousters bring more uncertainty to the oil and gas giant, which is tasked with carrying out Indonesian President Joko Widodo's energy sector reforms. Pertamina, wholly owned by the government, is Indonesia's largest company. It had $26.62 billion in revenue for the first nine months of 2016.
Following a shareholders meeting on Friday morning at the ministry's headquarters in Jakarta, Gatot Trihargo, a deputy to the SOE minister, said Soetjipto will be immediately replaced by Yenni Andayani, director for gas and renewable energy. Andayani will hold the position for up to 30 days, in which time the government is to formally appoint a new leader.
Ahmad Bambang was named Pertamina's deputy president in October; the position is being abolished.
Tanri Abeng, Pertamina's president commissioner, said there had been "poor teamwork and communications" between the two top executives, resulting in important decisions on projects and appointments being put off.
The appointments include that of the president director of Pertamina's gas subsidiary, Pertagas. After being vacant for several months, the position was filled on Tuesday.
"Good teamwork is incredibly important," Abeng said. "We don't need just individuals good in what they're doing, we need faster decision-making."
Said Trihargo: "One thing that the minister and the board of commissioners observed is a leadership problem within Pertamina. [The company] will have to shoulder tremendous and strategic tasks; solid management [is essential]."
The move marks the first major management reshuffle since Soetjipto was appointed as part of a boardroom overhaul in November 2014, shortly after Widodo took office. Soetjipto had built a reputation as a clean executive during his tenure as president of Semen Indonesia, a state-owned cement maker. At the time, he was seen as a symbol of Widodo's determination to reform the energy sector.
Under Soetjipto, Pertamina successfully stopped operations of its Singapore trading arm, Pertamina Energy Trading Limited, or Petral, which was driving up prices for fuel imports and was suspected of graft.
Bambang had been a longtime executive at Pertamina, having previously been the company's marketing director. He was recently questioned by prosecutors over an alleged corruption case surrounding the procurement of vessels by a Pertamina subsidiary.
Nikkei staff writer Bobby Nugroho contributed to this story.
