KPK Thwarts Corruption in Oil and Gas Sector

KOMPAS/RADITYA HELABUMI

The deputy chairman of the Corruption Eradication Commission (KPK), Laode M. Syarif (left), accompanied by KPK spokesperson Febri Diansyah, stands up after speaking at a press conference regarding alleged bribery related to the trade in crude oil and products of the Pertamina Energy Service refinery at the KPK\'s headquarters in Jakarta on Tuesday (10/9/2019). The KPK named former Pertamina Energy Trading Ltd. (Petral) president director Bambang Irianto a suspect. He allegedly accepted a bribe of US$2.9 million for facilitating Kernell Oil to get an oil procurement project.

JAKARTA, KOMPAS — The Corruption Eradication Commission (KPK) has named as a suspect Bambang Irianto, the former president director of PT Pertamina Energy Trading Limited (Petral) and former managing director of PT Pertamina Energy Services (PES), for allegedly accepting US$2.9 million in bribes. Since June 2014, the KPK has been investigating the case that occurred in 2012.

The new suspect has only emerged now because of the long investigative process. Acting on a complaint, the KPK gathered information and documents, and interviewed 53 witnesses. The KPK also examined the records of institutions in several countries.

"Obtaining information from tax haven countries was complicated and time-consuming. This is why the suspect could only be named now," KPK deputy chairman Laode M. Syarif said on Tuesday (10/9/2019) at the KPK’s Jakarta headquarters.

Syarif said that the KPK had pursued this case to support the priorities of President Joko Widodo, whose declaration of war on the “oil and gas mafia” led to the dissolution of Petral in May 2015.

The investigation discovered that Bambang allegedly received bribes from Kernel Oil in connection with a shipment of refined oil products and crude oil to PES, a subsidiary of the now-defunct PT Pertamina subsidiary Petral, said Syarif.

The illicit money was allegedly transferred to Bambang through a bank account belonging to SIAM Group Holding that he had opened in the British Virgin Islands.

"We respect the ongoing legal process and the presumption of innocence," Pertamina vice president for corporate communication Fajriyah Usman said regarding the case.

KOMPAS/RADITYA HELABUMI

The deputy chairman of Corruption Eradication Commission (KPK), Laode M. Syarif, speaks at a press conference regarding alleged bribery related to the trade in crude oil and products of the Pertamina Energy Service refinery at the KPK\'s headquarters in Jakarta on Tuesday (10/9/2019). The KPK named former Pertamina Energy Trading Ltd. (Petral) president director Bambang Irianto a suspect. He allegedly accepted a bribe of US$2.9 million for facilitating Kernell Oil to get an oil procurement project.

Efficiency

The case dates back to 2009-2012, when Bambang was marketing vice president at PES and Kernel Oil was a PES partner in importing and exporting crude oil for PES/Pertamina.

In 2012, the President instructed Pertamina to improve efficiency in its crude and fuel imports by prioritizing direct purchases.

To meet this directive, PES was required to follow Pertamina’s guidelines on the priority order of companies invited to take part in competitive bidding or direct negotiations: national oil companies (NOCs), refiners/producers and potential sellers/buyers.

Companies that were permitted to partner with PES were limited to those that appeared on PES\'s selected business partners list (DMUT). However, Bambang and a number of PES officials allegedly preselected the DMUT companies that were invited to take part in its tenders and did not invite all DMUT companies.

Emirates National Oil Company (ENOC) was an NOC that was frequently invited to bid its shipping services. "It is suspected that ENOC was used as a cover to make it appear as though PES was cooperating with an NOC to comply with the procurement requirements, even though the oil came from Kernel Oil," said Syarif.

Bambang allegedly used his position to determine Kernel Oil’s shipment allocation in the procurement of crude and refined oil products. In return, Bambang received payment through a bank account located in a tax-haven country. (IAN/APO)