Petral ... trading unit rapped for fraud

An investigative audit of Pertamina’s oil trading arm has revealed clear signs of fraud, CEO of the state-owned energy company said, amid an ongoing push to reform Indonesia’s oil sector.

Pertamina is in the process of dismantling its trading arm, Petral, which was widely suspected of being a vehicle for graft. The administration of President Joko Widodo hopes a cleanup of Indonesia’s oil and gas sector will improve investment in Southeast Asia’s biggest crude producer after a series of scandals.

The Petral audit – conducted by Australian forensic specialist KordaMentha – showed intervention by third parties resulted in Pertamina paying higher prices for fuel and crude imports, CEO Dwi Soetjipto told reporters, without naming any specific countries or companies. The audit also showed that traded volumes had been pre-arranged to limit competition, and that preference had been given to national oil companies, Soetjipto said.

“This needs a legal analysis for what steps must be taken next,” he said. The audit, which covered Petral’s operations from January 2012 until May this year, did not show how much had been lost during this period, he said.

At the time that the disbanding of Petral was announced in May, Petral officials denied any wrongdoing.

Simson Panjaitan, head of finance and general affairs at Petral, said he couldn’t comment on the findings of the audit because he hadn’t seen the report.

“We are supposed to get a fair treatment. Let’s see whether what has been reported in the media is correct. Many employees here will suffer because of this accusation if there is no evidence or any follow up,” he told Reuters.

Panjaitan said if there were clear signs of corruption that the evidence from KordaMentha should be handed over to Indonesia’s Corruption Eradication Commission (KPK). He said there were currently 45 employees with Petral, including 12 or 13 from Pertamina.