Indonesia says audit of Pertamina trading arm to begin soon

JAKARTA: Indonesia will soon launch an investigation of Pertamina’s oil trading arm, the energy minister said on Friday, adding that reforms of state-owned energy firm’s operations had saved US$98mil (RM350mil) in the first quarter.

Pertamina is in the process of dismantling its trading arm, Petral, amid widespread speculation it was used as a vehicle for graft. The administration of President Joko Widodo hopes the clean-up will improve investment in South-East Asia’s biggest crude producer after a series of scandals.

Earlier this week Pertamina said Petral and its subsidiaries would be liquidated by April 2016 at the latest.

“(The audit) can begin as soon as Pertamina has appointed a team of investigators,” Energy and Mineral Resources Minister Sudirman Said told reporters after meeting the president, referring to moves proposed by Widodo’s energy team in September.

“The investigations must continue because this is a way to end speculation,” he said, adding that if evidence of violations emerges the government will take swift legal action.

Referring to allegations that Petral bought crude at a US$1.30 (RM4.64) per barrel discount and savings were diverted to top officials, the minister said: “There is a question of where this went. The investigative audit will prove this.”

In the first three months since Pertamina ended Petral’s monopoly on oil purchasing, savings of US$22mil (RM78.4mil) had been achieved, the minister said, out of a total of US$98mil saved from various programme to improve Pertamina’s efficiency over this period.

“This is excellent progress whereby the supply chain is managed with professionalism, straight and honest, without vested interests and by people with credibility, and Pertamina can work better, transparently and provide benefits for the whole community.”

Pertamina, which is considered by critics to have been a cash cow for successive governments for decades, has frequently faced management shake-ups. - Reuters
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