Zatapi case the 'tip of Pertamina iceberg'

Alfian ,  The Jakarta Post ,  Jakarta   |  Mon, 10/20/2008 11:24 AM  |  Business

As police continue investigating state oil firm PT Pertamina over allegations it imported a sub-standard oil type called Zatapi last year, a lawmaker and an observer say the case may be one of many.

Legislator Zulkfili Hassan, who heads the House of Representatives inquiry committee, which was set up recently to study the management of oil and gas in the country, said the committee uncovered similar cases over the weekend.

"The inquiry committee has found some other irregularities concerning Pertamina's other crude and fuel imports. The committee findings cannot be published to the public, but we will definitely report them to law enforcers," Zulkifli said.

He said the committee would summon Pertamina again for questioning this Thursday.

Last year, Pertamina imported an average of 321,000 barrels per day (bpd) of crude and between 300,000 and 350,000 bpd of fuel last year to help meet domestic demand of 1 million bpd of fuel.

Pri Agung Rakhmanto, executive director of the Reforminer Institute said it was quite possible other such incidences had occurred.

"Pertamina has more than 50 partners for importing crude and fuel products. However, only five of them repeatedly win the import tenders. It's very possible that a case like Zatapi also occurred in other import deals," Pri Agung said Saturday.

According to Pri Agung, Singapore-based company PT Gold Manor International, which won a Pertamina-sponsored tender to provide 600,000 barrels of Zatapi crude oil to Indonesia, is one of the few companies that consistently wins oil supply tenders.

Gold Manor won the tender to supply Zatapi crude in December last year, and began shipping the oil to a refinery in Cilacap, Central Java, in February 2008.

In the same month, legislators of the House of Representatives Commission VII overseeing energy and mineral resources revealed that Gold Manor's proposal to compete in the tender was incomplete as it did not include a detailed breakdown of the contents of Zatapi oil.

The Attorney General Office began investigating the case on Mar. 2 this year.

Last month, the police named four Pertamina staff members, including a vice president and a former director, as suspects in the case.

Law enforcers searched Pertamina offices last week as part of the ongoing investigation.

Pertamina president director Ari Soemarno has repeatedly denied there have been irregularities in the makeup of imported Zatapi crude and that the imports have not caused state losses.

"In fact, Pertamina benefits from the lower price of Zatapi. We saved US$5.5 on each barrel of Zatapi we imported. Thus, in total, we saved $3 million on 600,000 barrels of Zatapi oil," Ari said.

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