Gas and Oil Contracts with MNCs Cause Financial Losses
Thursday, 04 September, 2008 | 18:28 WIB

TEMPO Interactive, Jakarta: The state could be incurring losses valued at hundreds of trillions of rupiah because of oil and gas agreements with some foreign contractors, reported the Supreme Audit Agency (BPK) to the House of Representatives’ (DPR) Inquiry Committee, yesterday.

According to BPK member Udju Jauhari, their audit found a number of problems in the upstream section of the national oil industry. The contracts include the supply of electricity and steam (cogen) supply by US-based PT Chevron Pacific, which had signed an agreement to collaborate with PT MCTN until 2013. “If they go on with the contract, Indonesia could incur losses up to US$ 1,2 billion,” cautioned Udju. He said the cogen project was made without going through a tender and it could have involved a conflict of interest. “Chevron Pacific and MCTN are both owned by Chevron Corp,” he added.

The BPK also found an accelerated depreciation claim and a miscalculated credit cost in the Conoco Philips’ Block B Natuna contract.

Another problematic contract involves ExxonMobil Oil Indonesia Inc, which, according to Udju, is in arrears amounting to US$ 32.500 for failing to pay their tax, dividends, interest and royalty.

ExxonMobil Indonesia’s spokesperson, Deva Rachman, said the company will study the audit results. “We have always paid our obligations on time,” she claimed, noting that ExxonMobil does not pay royalties as it is not a mining company.

BPK also audited the Upstream Oil and Gas Business Office regarding their internal control and compliance towards regulations, where they found a number of violations which could incur losses to the state worth US$ 24.3 billion and Rp 30.5 trillion during 2006.

BPK chairman, Anwar Nasution submitted the BPK’s findings to the Corruption Eradication Commission (KPK), the Attorney General Office’s (AGO) and the police. “I’m not the police, nor a prosecutor nor a KPK member,” he said, “I’m just the investigator.”

At a separate occasion, Energy and Mineral Resources minister, Purnomo Yusgiantoro left his fate on President Yudhoyono’s hands. He said whether or not he must resign as a minister is fully up to the president. However, he questioned the authority of the State Assets Recovery Committee which had urged the government to dismiss him. The committee held Purnomo responsible for offering China a cheap price for the supply of Tangguh gas.

ALI NUR YASIN | CORNILA DESYANA | GUNANTO | ANTON APRIANTO