Pertamina to scrap 159 dubious deals
JAKARTA (JP): State oil and gas company Pertamina said on Friday it would scrap 159 deals made with former President Soeharto's family, cronies and high-ranking officials.
The company said it would save US$64.7 million in dollar- denominated expenses and Rp 313.3 billion ($34.8 million) in rupiah-denominated expenses from discarding the deals, which it claimed were made under corrupt practices.
Pertamina's exploration director, Priyambodo Mulyosudirdjo, said the company had terminated some of the deals and sought to renegotiate others in an effort to stamp out elements of corruption, collusion and nepotism that had tarnished its image for decades.
"Pertamina is continuing to investigate other projects and contracts. So, the final figure could be higher than this," Priyambodo told a news conference.
Present at the conference were Ministry of Mines and Energy Secretary-General Djoko Darmono and the secretary-general of Pertamina's board of commissioners, Rachmat Sudibyo.
Rachmat said Pertamina had submitted preliminary results of its analysis into all of its deals to the government.
Coordinating Minister for Development and Supervision/State Administrative Reforms Hartarto Sastrosoenarto has given all state firms and government offices until this week to report all deals smacking of corruption, collusion and nepotism.
Priyambodo said the 159 deals covered a wide range of oil and gas activities, including oil exploration, fuel and crude oil imports, gas purchasing, the provision of gasoline chemicals and catalysts for Pertamina's refineries, liquefied natural gas (LNG) plant development and LNG shipping.
He said Pertamina had terminated several contracts for crude oil and fuel imports as well as the provision of chemical products for refineries.
The affected parties include PT Permindo Oil Trading, owned by Bimantara -- a business group founded by Soeharto's second eldest son Bambang Trihatmodjo -- and PT Perta Oil Marketing, which has links with Soeharto's youngest son, Hutomo Mandala Putra.
Priyambodo said the company would also renegotiate or put back into tender a number of contracts awarded to Soeharto's family and cronies without competitive bidding.
"We will abolish the privileges and bring back the standard procedures and rules, that is through a tender," he said.
He said Pertamina had in the past been forced to grant production sharing contracts (PSCs) and technical assistance contracts (TACs) in the exploration sector to Soeharto's family and associates without putting them to tender.
Priyambodo said Pertamina had also appealed to foreign oil companies operating here to take over shares owned by Soeharto's family and cronies in their joint projects.
There are currently eight PSCs and six TACs involving Soeharto's family or allies.
One of the PSCs is the onshore and offshore Kangean block in East Java, which is operated by ARCO of the United States in a joint venture with Bimantara.
Unocal of the United States has also been called on to take over the shares of PT Nusamba Kaltim Pratama, controlled by Muhammad "Bob" Hasan -- Soeharto's long-time golfing buddy -- in the offshore Rapak, Makasar Straits block in East Kalimantan.
Priyambodo also said Pertamina had canceled plans to cooperate with companies controlled by Soeharto's family and associates in the proposed construction of private refineries.
PT Asia Pasific Petroleum, controlled by Trihatmodjo, and PT Buana Ganda Perkasa, controlled by Soeharto's half-brother Probosutedjo, had both planned to build refineries with a 300,000-barrel-per-day (bpd) capacity in East Java in cooperation with Pertamina.
Priyambodo also said the state comptroller (BPKP) was investigating alleged corruption and collusion in the development of the country's eighth LNG plant project in Bontang, East Kalimantan. The plant is currently being constructed by PT Inti Karya Persada, controlled by Bob Hasan. (jsk)