UPDATE 1-CEO of Indonesia's oil firm Pertamina to stay for now

Tue Mar 5, 2013 4:46am EST

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By Fathiya Dahrul and Fergus Jensen

JAKARTA, March 5 (Reuters) - The chief executive of Indonesia's state-owned oil and gas company, Pertamina , has been asked to stay on after the expiry of her four-year term on Tuesday, a minister said.

Pertamina is one of Indonesia's most valuable state assets and sources of funding, and the process of choosing its leader is frequently embroiled in controversy and political feuds.

During the time Karen Agustiawan ran Pertamina as its first woman chief executive, Indonesia's second-biggest oil producer aggressively acquired oil assets both at home and abroad to boost profits and offset declining output.

"Now her time is up, but before a new CEO is appointed there must continue to be one," Dahlan Iskan, the minister for state-owned enterprises, told reporters.

"We're waiting for the decision of the final assessment team and they won't necessarily replace her. They may also not extend her tenure."

The company reported profits of more than 25.89 trillion rupiah ($2.67 billion) in 2012 and was expected to boost oil output by 5 percent to 244,000 barrels of oil per day this year.

"Mrs. Karen is pretty good. She's not that special, but she is pretty good," said Iskan, who along with President Susilo Bambang Yudhoyono makes the final decision on who will run Pertamina.

"Her profits were the largest in the history of Pertamina."

Agustiawan could not be reached for comment. A Pertamina spokesman declined to confirm the extension of her tenure.

Pertamina plans to spend up to $6.7 billion to boost production and expand infrastructure in 2013.

The company bought three Indonesian units of U.S. oil company Anadarko Petroleum Corp for an undisclosed price in December, followed by the acquisition of the Algerian unit of ConocoPhillips for $1.75 billion.

Last month, Pertamina scrapped its plan to buy the Venezuelan assets of Harvest Natural Resources Inc for $725 million.

Pertamina, which accounted for 17 percent of Indonesia's oil and gas output in 2012, is under pressure to improve oil infrastructure to prevent subsidised fuels from being sold illegally. Fuel subsidies gobble up around 15 percent of government spending, totalling 306.5 trillion rupiah last year.

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