Selasa, 26 Agustus 2008

AUDITORS TO INVESTIGATE RI-CHINA LNG CONTRACT

By Andi Abdussalam

       Jakarta, Aug 16 (ANTARA) - As liquefied natural gas (LNG) prices are soaring in  domestic and global markets to about US$20 per mmbtu, Indonesian state auditors are planning to investigate a seven-year old LNG contract with China where the price was set at US$3.3 per mmbtu.

        Auditors from the State Audit Board (BPK) will begin the investigation next month on the Tangguh gas field contract which was signed for a 20-year period in 2002.

        "We will not cover up the results of our audit. We will make public what we have found in the investigation," BPK Deputy Chairman Udju Juhaeri said.

         Oil and gas observers were of the view that the contract greatly harmed the interest of Indonesia.

        "The contract on export of LNG from the Tangguh field to Fujian province in China greatly harms Indonesia's interests," Vice President Jusuf Kalla said last week.

         Under the contract, LNG from the Tangguh field was priced at US$3.3 per mmbtu, well below the international price of US$20 per mmbtu, he said. Therefore, he added, the Indonesian government wanted to renegotiate the contract with the Chinese authorities.

         He said it was Indonesia that proposed the contract be linked to global crude prices. And the proposal was acceptable to all countries so that they now used the formula.

        "But the contract on  the export of LNG from the Tangguh field to Fujian province deviates from the formula," he said.

         Therefore, the vice president himself expressed hope that the House of Representatives (DPR) would investigate the Tangguh LNG export contract with China which he believed was the worst contract of it kind so far.

         "So, the DPR should also investigate (through its right of inquiry)  the Tangguh LNG export contract because it greatly disadvantaged Indonesia. This is the worst contract to date," Kalla said during a visit in  Beijing on  Sunday.

         He said LNG exports from the Tangguh field  in Papua to China's Fujian province had caused a great loss to Indonesia.

         The BPK investigators are expected to cooperate with an inquiry committee of the DPR in auditing the contract. Several months earlier, the DPR had set up a fuel oil price inquiry committee tasked to investigate the government policy in raising fuel oil prices in May.

         "We are preparing materials for a meeting with the DPR inquiry committee," BPK chairman Anwar Nasution said referring to his agency's plan to audit the government's polices in the oil sector.

         Mahfudz Siddiq of the Prosperous Justice Party (PKS) said he supported the idea if the DPR's inquiry committee was involved in the auditing of the Tangguh contract.

         "The energy crisis has taken place for eight years so that investigation should not be carried on the present government only but also on officials of the previous government," he said.

         He said that the inquiry committee could ask explanations from former president Megawati Soekarnoputri and her officials.

         "But there is no need to form a separate inquiry committee for that purpose. It is enough for the DPR to use its fuel price hike inquiry committee," he said.

         BPK chairman Anwar Nasution said the BPK would be prepared to cooperate with and submit the auditing results of the oil/gas sector, and the Tangguh field  gas sales contract to the House of Representatives.

         "Everything is being prepared,  and I have especially come to the House. The auditing of Tangguh, will be completed some time in the future," He said.

         In the meantime, Energy and Mineral Resources Minister Purnomo Yusgiantoro said on Tuesday he was ready to accommodate the  investigation into the LNG sales contract with China.

         "I will say, go ahead and investigate it because the contract was concluded at that time transparently," the minister said after opening a business forum themed "Reinventing the Oil And Gas Sector: Responding to the National Energy Policy," here on Tuesday.

          He said the oil sector in Indonesia, particularly the Tangguh LNG contract, had come under pressures with political nuances.

         "The oil/gas sector is colored by pressures with high political nuances so that it is hard for it to develop," the minister said.

         He said he had examined the contract chronology but had not found any problem in it because it was all done transparently.

         Yusgiantoro said the price in the contract was based on the Guangdong price which at that time was set based on the result of a tender among six participants.

         Referring to the low price while at present the world crude price is moving upward, the minister said nobody at the time could  predict that the world crude price would soar to over US$100 per barrel.

         "At that time, the cost with regard to the Tangguh contract was lower. The logic is that if it was not profitable, no one would  sign a contract," he added. (T.A014/A/HAJM/A/S012) 26-08-2008 21:31:38

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