Indonesian oil and gas: Gusher

Nguồn tin: nguontinviet.com

AT THE end of the Muslim holy month of Ramadan it is traditional for Indonesians to ask one another for forgiveness. Rudi Rubiandini, chairman until last week of the country’s oil-and-gas regulator, must be hoping for some seasonal clemency. On August 13th the anti-corruption commission, the KPK, arrested Mr Rubiandini after catching him pocketing $400,000 from a Singaporean energy firm, Kernel Oil. The money is allegedly the second instalment of a bribe worth $700,000. Mr Rubiandini has admitted accepting gifts but denies corruption, as does Kernel Oil.

Another scandal is the last thing the country’s beleaguered energy industry needs. Last November the Constitutional Court dissolved the previous regulator. Many interpreted this as evidence of creeping economic nationalism in Indonesia. The court sided with a group of petitioners who claimed that the 2001 oil-and-gas law which established the regulator was in violation of the constitution. This insists that natural resources remain under “the powers of the state”. Within days the government established a new regulator, now called SKK Migas.

Whereas its predecessor was an independent watchdog, SKK Migas sits under the energy ministry. That may make it more prone to corruption, says Kevin O’Rourke, a political-risk consultant. After Mr Rubiandini’s arrest, the KPK searched the offices of the ministry’s top bureaucrat, where it seized another $200,000 as part of the widening investigation. The energy minister, Jero Wacik, is a senior member of the Democratic Party of President Susilo Bambang Yudhoyono. Mr Wacik denies any involvement by his party, and Mr Rubiandini himself has said that the money from Kernel Oil was not meant for the minister. Still, the scandal has raised questions about party financing ahead of elections due next year.

Indonesia’s oil industry has been in decline for decades, with crude-oil production almost halving since the mid-1990s. The country’s proven reserves of 4 billion barrels are likely to be sucked dry by the mid-2020s. A dozen foreign oil-exploration firms have spent nearly $2 billion between them drilling for new reserves in the past five years, but have found nothing much. Meanwhile, Indonesia is struggling to attract investors to tap undersea reserves in the east of the archipelago that are hard to get at.

Scandals such as the latest one will not help boost the industry. Mr Yudhoyono suspended Mr Rubiandini on August 14th, less than eight months after the regulator took up his post. Officials stress that Kernel Oil, a subsidiary of a parent company registered in the British Virgin Islands, is involved in neither oil exploration nor production in Indonesia. Rather, it is one of 40-odd firms licensed to bid for petroleum products not used by Pertamina, the state-owned oil firm. Still, these attempts at reassurance may not be enough for investors. It is the first time that the KPK has properly investigated the oil-and-gas business, worth almost $70 billion annually. More revelations are likely as the probe continues.

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