Indonesia Widens $17-Billion Corruption Probe Into State Energy Firm

Indonesia’s attorney general’s office has widened the corruption investigation into oil procurement involving state oil and gas firm Pertamina, which is alleged to have cost $17.6 billion (285 trillion Indonesian rupiahs) in economic losses to the country.

In a follow-up to the probe, Indonesia has named nine more suspects in the graft case involving the procurement of crude and oil products. Six of the newly named suspects are former executives at units of the state oil and gas firm, and three are from private companies. These are a former manager at commodity trading giant Trafigura, a former executive at shipping company PT Mahameru Kencana Abadi, and a beneficial owner of fuel terminal PT Orbit Terminal Merak, according to Abdul Qohar, a director at the Attorney General’s Office.

The nine new suspects are accused of irregular procurement of oil and irregularities in tanker and terminal leasing deals between 2018 and 2023.

Earlier this year, Indonesia arrested three executives at Pertamina units over alleged corruption in oil imports. Riva Siahaan, chief executive of Pertamina Patra Niaga, the CEO of Pertamina International Shipping, Yoki Firnandi, and Sani Dinar Saifuddin, a director at Kilang Pertamina Internasional, were arrested in February.

Back then, the Indonesian prosecutors said the corruption had cost the country about $12 billion. Now the figure has been bumped up to the equivalent of more than $17 billion.

While an investigation into one of Indonesia’s biggest corruption cases ever is ongoing, Pertamina and the government are looking to boost oil production from Southeast Asia’s biggest economy.

Currently, Indonesia produces about 600,000 barrels per day (bpd) of crude oil. Its goal is to boost the output levels to 1 million bpd by 2030.

Earlier this year, Indonesia awarded five strategic oil and gas blocks to international and domestic players in a bid to reverse its decade-long production decline and bolster national energy security.

By Tsvetana Paraskova for Oilprice.com

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