Pertamina cancels Soehartos' oil and gas contracts

JAKARTA (JP): State oil and gas company Pertamina annulled contracts with former president Soeharto's children and associates, and ordered them to sell their stakes in oil and gas projects as part of its continued drive to root out traces of corruption, collusion and nepotism.

The Ministry of Mines and Energy said in a statement on Friday Pertamina had ordered PT Humpuss Patragas, owned by Soeharto's son Hutomo "Tommy" Mandala Putra, to sell its 51 percent stake in the Central East Java oil and gas block in East Java to its Australian partner Ampolex Cepu Pty. Ltd., a subsidiary of American oil and gas company Mobil Oil Inc.

"(Pertamina) is awaiting the approval of Minister of Mines and Energy (Kuntoro Mangkusubroto) for the action," the ministry said.

Humpuss Patragas is one of 159 companies controlled by Soeharto's family and associates which were accused by the government last year of having secured contracts with Pertamina through their political connections.

Pertamina annulled or reviewed 152 contracts last year suspected of being tainted by corruption, collusion and nepotism.

Pertamina has taken action this year against seven contracts, including the oil exploration and production contract awarded to Humpuss Patragas.

The government could save Rp 212 billion and US$92.9 million by annulling and reviewing the contracts.

The ministry said Pertamina also forced Tommy to sell his stake in the Dwi Putra liquefied natural gas tanker to his Japanese partners, Mitsui OSK Lines and Nippon Yusen Kabushuki Kahisa.

PT Genindo EPS, a subsidiary of the Bimantara Group controlled by Soeharto's son Bambang Trihatmodjo, was forced to transfer its stake in the Sembakung oil and gas field in East Kalimantan to PT Equatorial of Canada.

Pertamina forced Soeharto's golfing partner Mohammad "Bob" Hasan to buy natural gas from Pertamina for his PT Kertas Kraft Aceh pulp and paper plant at the standard price of $2 million per million British thermal unit (MMBTU).

The ministry said that when Soeharto was still in power, Hasan paid Pertamina $1.5 million per MMBTU.

Pertamina also annulled a contract with PT Ogsipiras Basya Pratama, reportedly owned by the son of former minister of mines and energy IB Sudjana, for the development of a liquefied petroleum gas plant.

Pertamina also terminated a contract with PT Triharsa Bimanusa Tunggal, owned by Soeharto's daughter Siti Hardijanti Rukmana, for the development of a fuel pipeline across Java.

The ministry also said the Attorney General's Office was still investigating suspected corruption by Pertamina and government officials during the development of a refinery in Balongan, West Java.(jsk)