Pertamina begins probe into Caltex dealings

Pertamina begins probe into Caltex dealings

JAKARTA (JP): State oil and gas company Pertamina's
inspectorate has started investigating a questionable deal made
by oil company PT Caltex Pacific Indonesia for the development of
its US$190 million cogeneration plant in the province of Riau.

A Pertamina official who requested anonymity told The Jakarta
Post on Wednesday that Pertamina's inspectorate had been
collecting and checking documents related to the project
following the instructions of Minister of Mines and Energy
Kuntoro Mangkusubroto on Monday.

"The inspectorate is moving very fast. I've never seen such a
quick investigation by this company," the source said.

He said several legislators had also asked for documents
related to the project.

Meanwhile, Caltex canceled its plan to present the project to
reporters on Wednesday due to the investigation.

"We were informed by Pertamina's office for the supervision of
foreign contractors and the directorate general of oil and gas
(at the Ministry of Mines and Energy) that the investigation into
the cogeneration plant project ordered by Minister of Mines and
Energy (Kuntoro Mangkusubroto) has started,"

"As such, we have to cancel the technical presentation of the
cogeneration plant project which we planned for Wednesday," AR
Chaidar, Caltex's vice president for corporate public affairs,
said in a statement.

Caltex has been under fire for awarding the contract for the
development of the 300-Megawatt cogeneration plant in 1997 to its
sister company PT Mandau Cipta Tenaga Nusantara without
competitive bidding. Mandau Cipta is allegedly linked with the
then president of Pertamina, Faisal Abda'oe.

The plant, which is currently under construction, will support
Caltex's oil operation in its Duri oil fields in Riau.

Caltex said Mandau Cipta was 95 percent owned by United States
energy companies Chevron and Texaco, while the remaining 5
percent was held by PT Nusagalih Nusantara.

Sources said Nusagalih was partly owned by the Serangan Umum 1
Maret foundation, which was formerly chaired by Faisal Abda'oe
and was linked to former president Soeharto.

Caltex president and chairman of the managing board, Baihaki
Hakim, admitted that Caltex had awarded the contract without
competitive bidding, but he insisted the deal had Pertamina's
prior approval.

He also denied the Serangan Umum 1 Maret foundation had any
stake in Nusagalih. (jsk)