Indonesia energy regulator arrested by anti-graft agency
By Fergus Jensen and Andjarsari Paramaditha, ReutersJAKARTA--Indonesia's anti-graft agency on Wednesday arrested the head of the energy regulator to probe allegations he took more than half a million dollars from an oil firm, piling more uncertainty on energy policy in Southeast Asia's biggest economy.
August 15, 2013, 12:07 am TWN
The arrest is a new blow to Indonesia's attempts to attract more investment from international energy companies, several of which have threatened to scale back operations due to uncertainty about the investment environment.
The former OPEC member's oil output is declining, and the country has faced criticism for unclear regulations and complaints about a nationalist stance on resources.
Indonesia's Corruption Eradication Agency (KPK) caught SKKMigas Chairman Rudi Rubiandini taking around US$400,000 in a black brief case and ownership documents for a BMW motorcycle from two people employed by a private company, KPK officials said. An additional US$190,000 was found in the chairman's residence.
KPK officials refused to name the private firm involved, only giving the initials “KOPL.” SKKMigas spokesman Elan Biantoro said it was an oil company that he was not familiar with.
Rubiandini could not be reached for comment.
Finance Minister Chatib Basri told Reuters that while the government was committed to zero tolerance of corruption the case did send a “bad signal to investors.”
The oil and gas sector is politically crucial, accounting for about a fifth of Indonesia's government revenue.
Indonesia was once self-sufficient in oil and gas but has been struggling for years to attract investment to halt declining output from a peak of around 1.6 million barrels per day in 1995. Indonesia produced an average 831,000 bpd in the first half this year.
Rubiandini was appointed in January to head SKKMigas after the independent industry regulator BPMigas was declared unconstitutional. Some experts say the motivation was to gain greater control over the sector after SKKMigas was placed within the energy ministry.
SKKMigas denied the arrest would damage Indonesia's oil operations. The agency has existing contracts with oil majors including BP PLC, Chevron and Exxon Mobil.
“Operations will continue to run. There is no impact,” Biantoro said.
Energy Minister Jero Wacik said Rubiandini has been temporarily suspended as SKKMigas chairman and would be replaced by Vice Chairman Johanes Widjonarko.