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Wednesday
Aug212013

Indonesia petro-graft scandal deepens

A lawyer for Singapore-based energy trader Kernel Oil said Tuesday that a company official bribed a top Indonesia regulator to break into the country's oil industry.

Kernel Oil's Simon Gunawan Tanjaya allegedly paid two bribes totaling $700,000 to the head of SKKMigas, Rudi Rubiandini.

The payments allegedly went first to Rubiandini’s golf trainer, a man named Deviardi, according to an reports.

Rubiandini was arrested last Friday. Police found $400,000 in cash in his house when they arrested him.

SKKMigas was forced to suspend all public tenders for oil and natural gas sales following following the arrest.

A tender for the sale of 400,000 barrels of oil on Monday was postponed. Kernel Oil was supposed to participate in the tender, worth about $40 million based on July prices.

SKKMigas sells excess oil and gas that can't be used by state energy company Pertamina Persero.

About 40 firms are registered to buy oil and gas from SKKMigas.

Three other top SKKMigas officials were also arrested Friday by Indonesia's independent Corruption Eradication Commission (KPK).

In recent days, KPK investigators reportedly seized $300,000 in cash and gold from the office of a top energy ministry official. The ministry oversees all SKKMigas awards.

An industry report said the heads of SKKMigas’ crude and natural gas commercial divisions, as well as the chief of operations support, were all suspended from the agency and barred from travel.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.