INDONESIA - Purnomo Yusgiantoro.

The Energy and Mineral Resources Minister since Abdurrahman Wahid reshuffled the cabinet on Aug. 23, 2000, Purnomo succeeded Rtd. Gen. Susilo Bambang Yudhoyono who then took a far more powerful position (see Gas Market Trends). Purnomo was retained under Mega's presidency and Susilo's presidency. But the powers of this ministry, which used to be extensive, have been reduced in favour of local provincial governments following devolution.

Mining companies in Indonesia can no longer negotiate their contracts with the Ministry. Instead they have to deal with the top local official in the area in which their mine is located. Tax rates in Indonesia are already so high that no significant new mining investment has been made since early 1998. Experts had warned since early 2001 that the mining industry could shrink by 30% within this decade.

Purnomo is among technocrats who favour keeping Indonesia within OPEC. He agrees with analysts that, if E&P terms improved further so that they compare favourably with those on offer in neighbouring countries, foreign investment will increase and so will Indonesia's oil and gas reserves.

Born in 1951 in Semarang, Java, Purnomo graduated from Bandung's prestigious Institute of Technology, where he received a scholarship from Total of France. He then pursued a doctorate at the world-renowned Colorado School of Mines and now is regarded as one of the faculty's distinguished alumni.

Purnomo began his career at the Ministry of Energy and Mineral Resources as an expert staffer. From 1990 to 1992 he worked as an energy consultant at the World Bank. He was also an energy consultant to the Asian Development Bank. Later he rejoined the Ministry and in 1996 he became Indonesia's governor at OPEC, a position he held until 1998. Later he became adviser to then Energy and Mineral Resources Minister Kuntoro Mangkusubroto (who later became CEO of the state-owned power company PLN).

Late in 1999 Purnomo joined the military think-tank, National Resilience Institute (Lemhanas), as its deputy head. His work impressed the political leadership and caught then President Wahid's attention. Shortly after his appointment as energy and mineral resources minister, Purnomo began studying the Oil and Gas Bill submitted to parliament, under which Pertamina was to lose control over E&P negotiations with other companies and production sharing contracts (PSCs) as well as its monopoly in the downstream sector. He met with Pertamina's high executives and discussed the future of the company. Then President Mega signed the bill into law in November 2001, after this was passed by parliament in the previous month.

Under the law, control over E&P negotiations and PSCs went from Pertamina to state E&P regulator BP Migas, which was formed in August 2002. BPMigas is partly an evolution of the Ministry's General Directorate for Oil and Gas, although this directorate remains under the Ministry's Luluk Sumiarso who heads the petroleum sector.

Until early 2003, Pertamina helped BP Migas in offering new E&P blocks, the drafting of PSCs and negotiations with foreign and local companies. Since April 2003, Pertamina has been a limited liability company owned by the state. But Pertamina has retained its monopoly over much of the downstream sector, owning and running the country's oil refineries and major petrochemicals plants. Pertamina is to be privatised eventually.

Purnomo has encouraged BP Migas to offer E&P investors more incentives but within the law of late 2001, believing this is vital to attract more capital and the latest technology into the petroleum sector. With their help, he says, Indonesia's capacity to produce oil and condensates could rise to more than 1.2m b/d "within a few years". In 2003 he backed BP Migas' offer to raise the oil production share of foreign firms in PSCs from 15% to 25%.

Purnomo earlier this year said the government had rejected a proposal to sign a new gas export agreement with Singapore and Malaysia. He said: "The rejection is in line with the government's policy of giving priority to growing domestic consumption... Under the government's previous policy, gas from all major reserves was appropriated for exports, but now large reserves will also contribute to domestic consumption".

The minister explained that, while the existing contracts will remain valid, they will no longer be renewed. He said: "Singapore will continue to be supplied from the Natuna Block A operated by ConocoPhillips, Premier Oil and Star Energy, transported via submarine pipeline".

Malaysia's contracts through Sembawang Corp, for the supply of gas from the Koridor Block of Suban 1 and Suban 2 fields in South Sumatra, also remain valid. The gas is transported through a pipeline run by the state-controlled gas utility, PT Perusahaan Gas Negara (PGN), which runs through Jambi, Panaran, Singapore and Malaysia.