Indonesia names Pertamina officials, oil tycoons as suspects in an oil procurement probe

Indonesia's Attorney General's Office named seven individuals, including executives of state energy firm Pertamina as suspects in an alleged 'corruption investigation' related to crude oil acquisition.

Syarief Sulaemannahdi, Director of Investigations at the Attorney General's Office told reporters on Thursday night that the suspects are a vice president and a manager from Pertamina, as well as three Pertamina Energy Services officials.

The fugitive oil baron Riza Chalid is also a suspect, as he is the "beneficial owner" of three companies that are alleged to be the beneficiaries of dealings. Another suspect was a director of?one of these companies, Nahdi stated.

The purchase was made through Petral, another Pertamina division that was dissolved in 2015.

The seven suspects have been accused of violating Indonesia’s criminal code against corruption, which caused a loss for the state. This charge carries a maximum life sentence.

Nahdi claimed that Pertamina officials and its units were accused of manipulating tender processes, estimating costs and increasing gasoline prices. The prosecutors also claim that the suspects have leaked confidential data regarding demand for gasoline and crude oil.

"The procurement or tender process for crude oil results in a longer supply chains and higher prices. This is especially true for 88-octane and 92-octane gas, causing Pertamina to suffer losses," Nahdi stated.

Chalid, who police reported earlier this year as being at large in relation a separate 'case', "had influence on procurement or tender processes," the prosecutor said, without providing any further details.

Pertamina's spokesperson told the firm that it respected the process of law enforcement and encouraged all parties to maintain the presumption innocence until an official and binding court decision is made. Chalid was a suspect in a case involving the illegal leasing of fuel terminals and the illegal importation of crude oil. In that case, nine people were sentenced to prison in the first half of this year. Among them, two former Pertamina unit chief executives and Chalid's own son.

(source: Reuters)