Indonesia's Pertamina replaces 'problematic people' amid graft probe: oil min

[JAKARTA] Indonesia's Pertamina has replaced "the problematic people" at its oil trading unit, the energy minister said on Wednesday, as the state oil and gas company looks to restore its image amid a corruption investigation.

The country's anti-graft agency, the Corruption Eradication Commission, has launched a preliminary investigation into Pertamina's trading arm, Petral, after an independent audit earlier this month revealed clear signs of fraud.

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. "Pertamina must clean it up and they have already done a lot. Problematic people have been replaced," energy minister Sudirman Said told reporters.

Pertamina, which is in the process of dismantling Petral, suspended four of the unit's employees this week for alleged misconduct, CEO Dwi Soetjipto said on Monday, without providing any names.

A spokesman for the Petral unit could not immediately be reached for comment. At the time that the disbanding of Petral was announced in May, Petral officials denied any wrongdoing.

Petral, which until this year had assets of US$2 billion, held a near monopoly on the trading of crude and oil products in and out of the country, keeping Indonesia supplied with about a third of its daily oil needs. "The aim of the Petral audit was an internal clean-up and if there are indications of violations they must be punished," Said said.

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 Soetjipto said earlier this month, without naming any specific countries or companies.

The audit's results will be presented to parliament next week.

Pertamina's new vehicle for oil purchasing, the Integrated Supply Chain, has yielded more competitive pricing, with efficiency savings of US$103 million at the end of the third quarter, the company has said.

REUTERS