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pstream oil and gas regulator BPMigas said on Thursday that the government would halt cost recovery payments to PT Chevron Pacific Indonesia (CPI) should the company be proven to have committed illicit practices in its bioremediation project at its oil fields in Riau.

“If we find any misconduct by CPI in the project, we’ll immediately stop the cost recovery payments for the project. We have to secure the state money until CPI can prove that it’s not guilty,” BPMigas head Raden Priyono said at his office in Jakarta on Thursday.

“If the court rules that CPI isn’t guilty, we’ll pay back the money,” he said.

The Attorney General’s Office (AGO) has accused CPI of appointing incompetent companies — PT Green Planet Indonesia and PT Sumigita Jaya — to run the project from 2003 to 2011. Both companies, according to the AGO, were not certified for waste treatment work.

Based on those allegations, AGO concluded that the project might be fictitious and therefore might have caused state losses totaling Rp 200 billion (US$21.74 million).

Priyono reported that the project had been planned to run for a 10-year period at an estimated total cost of $23 million. So far, the project has cost around $14 million.

Bioremediation is a method in which microorganism metabolism is used to remove pollutants for environmental purposes. The process aims to normalize soil that has been contaminated by waste from oil production activities.

“But we’re sure that all oil companies in the country execute each project prudently and BPMigas has also supervised the implementation of each project,” Priyono said.

Separately, CPI spokesperson Donny Indrawan claimed his company always operated within all prevailing laws and regulations, including the production sharing contract signed between the company and the Indonesian government.

Commenting on the legal process on the bioremediation project, he said CPI was committed to cooperate with law enforcers and follow all legal procedures to prove that the company had done nothing against the law.

“We’ll prepare and disclose all data and documents related to the project so that the AGO can see them whenever they need,” he said over the phone.

Earlier, CPI claimed that the PT Green Planet Indonesia and PT Sumigita Jaya had fulfilled all technical requirements for the bioremediation project and they had offered the cheapest prices.

The AGO has identified seven suspects in the case as ER, W, K, AT and BAF from Chevron and H and RP from the contractors. All seven suspects have been barred from leaving the country.

On Tuesday, the prosecutors summoned the suspects, but only RP, an executive of Green Planet
Indonesia, attended the questioning session.

As of early March, CPI, the biggest crude oil producer in Indonesia, was producing 351,660 barrels of oil per day (bpd), below the target of 357,200 bpd, BPMigas’s data showed. Last year, the company’s oil output was 356,606 bpd.