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Mon, 07/28/2008 - 00:30
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By Andi AbdussalamJakarta, July 27 (ANTARA) - State-owned oil company, Pertamina, is preparing itself to face auditors tasked to investigate alleged misappropriations in the country's oil business.

Auditors from the Supreme Audit Board (BPK), the Corruption Eradication Commission (KPK) and the House of Representatives' Special Fuel Oil Price Hike Inquiry Commission (Pansus Angket) are all set to probe into the allegations.

"Pertamina is ready 'to disclose everything' with regard to the country's crude and fuel oil imports to the House's inquiry committee," Pertamina President Director, Ari Soemarno, said on Thursday.

Calls for investigation into the oil business have been raised by many quarters in society of late.

Executive Director of ReforMiner Institute Pri Agung Rakhmanto said on Sunday that the inquiry committee must look comprehensively at the procurement of crude, both from domestic sources and from imports.

The Indonesian Corruption Watch (ICW) recently called on the KPK to investigate an alleged corruption case in the oil and gas sector which had the potential to inflict Rp194 trillion in losses to the state.

Firdaus Elyas of the ICW said based on data it had collected, the ICW had found indications of irregularities in the past seven years and could have caused Rp194 trillion in losses to the state.

According to media reports, the Indonesia Corruption Watch (ICW) has received a copy of a BPK audit report which indicated misappropriations of oil and gas proceeds amounting to Rp120.3 trillion.

The BPK itself is still focusing its auditing activities in the second semester of this year on the oil and gas sector.

"We will audit the oil and gas sector by evaluating the propriety of the selling prices of LNG (liquefied natural gas), procurement of crude and refined oil products," BPK Chairman Anwar Nasution said.

In the meantime, the Corruption Eradication Commission (KPK) is also now turning its attention to people in the oil and gas sector. KPK Deputy Chairman Haryono said recently that it was believed the results of the official oil and gas lifting calculations so far were contradictory to the facts on the ground.

While Deputy Chairman of Fuel Oil Price Hikes Inquiry Committee, Sutan Bhatoegana, promised the committee would work professionally and look at the problem comprehensively. The committee would summon all parties -- companies and institutions-- involved in the fuel oil price hikes.

ReforMiner Institute Director Pri Agung Agung said if the inquiry committee is serious in its investigation; it would not face too many difficulties in proving irregularities in the crude procurement.

The inquiry committee was formed by the House of Representatives in its plenary meeting last June 24, 2008 to inquire the government's policy to increase fuel oil prices by an average of 28.7 percent.

Data submitted by Pertamina to a hearing with the DPR's Energy Commission on June 25, 2008, showed that domestic crude procurement reached 65 percent while its imports were 35 percent, of which 68 percent were long-term contracts and 32 percent were spot (incidental) contracts.

In 2007, Pertamina purchased 855,000 barrels per day of crude to meet the need of its refineries. It consisted of 534,040 barrels per day of domestic purchase worth US$13.877 trillion and 320,960 barrels per day of imports valued at US$8.729 trillion.

Of the imports, some 218,250 barrels per day, or 68 percent, were purchased through long term contracts while 102,710 barrels per day were bought through spot contracts.

According to Ari Soemarno, Pertmaina is "to disclose everything" with regard to the country's crude and fuel oil imports.

Speaking in a public discussion organized by the Energy and Mineral Resources Journalist Forum (FWESDM) here this week, Soemarno said Pertamina was currently transforming itself into a more efficient business entity.

"It includes efficiency in the procurement of crude and fuel oils," he said, adding that Indonesia still needed to import crude because its own crude production was not enough to feed domestic refineries.

He said it was more efficient to export some of Indonesia's crude production so that domestic refineries would only process certain types of imported crude.

Soemarno said imports were needed because production and the capacity of refineries at home were not able to fully meet demands for domestic consumption which continued to increase.

The domestic oil refineries at home were only able to produce 855,000 barrels per day of its full capacity of 1.028 million barrels of oil and other products per day.

"For fuel oils, they only produce 652,000 barrels per day or only about 75 percent of their designed capacity while domestic needs reached one million barrels per day. This means we still need to import about 300,000-350,000 barrels per day," the Pertamina president director said.