July 3, 2008

Indonesian Anti-Graft Body to Investigate Management of Oil, Gas Sector

Text of report in English by influential Indonesian newspaper The Jakarta Post English-language website on 2 July

[Unattributed article: "KPK ready to unveil covered management of oil and gas sector"]

The Anti-Corruption Commission (KPK) will cooperate with other related institutions to unveil the management of the oil and gas sector.

KPK's Vice Chairman for Prevention, Haryono, said on Wednesday [2 Jul 08] that the anti-graft commission would help to find a solution so the oil and gas sector could be managed better.

"In the near future we will communicate with the Energy and Mineral Resources Department and the Oil and Gas Supervisory Agency (BP Migas) for clarification," Haryono said.

Haryono said oil lifting should be supervised by BP Migas, as the government's representative, and should not be contracted to private consultants.

"It is too risky," Haryono said.

He criticised the government's ability to recover costs in the sector, which he claimed had the potential to squander the state's money.

Since 1981, he said, Indonesia covered 100 per cent of its oil and gas exploration costs, including costs for exploration assets. However, the value of these assets has decreased over time.

"The problem is that the management of the oil and gas sector tends to be hidden," Haryono said.

He said reports into the sector were always closed and confidential.

Originally published by The Jakarta Post website, Jakarta, in English 2 Jul 08.

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