The Jakarta Corruption Court’s decision to imprison executives from two of Chevron Pacific Indonesia’s (CPI) contractors for their roles in a corruption case involving the US-based oil company’s environmental project will harm the investment climate in the country’s oil and gas sector, the upstream oil and gas regulator has said.
“The case could upset the investment climate in the upstream sector, and ultimately delay the government’s campaign to increase production and find new hydrocarbon reserves,” said upstream oil and gas regulatory special task force (SKKMigas) spokesman Elan Biantoro on Thursday.
CPI, a subsidiary of US giant Chevron, is currently the largest crude oil producer in the country, ahead of Indonesia’s state-run Pertamina, with output of around 300,000 barrels per day (bpd) of oil, amounting to 40 percent of the
nation’s total oil production.
Elan added that the government had yet to reimburse the US$9.9 million spent by CPI on the project and, thus, there were no state losses in the case.
The regulator was referring to developments in the CPI case at the Jakarta Corruption Court.
The court sentenced on Wednesday the director of environmental services company PT Green Planet Indonesia, Ricksy Prematuri, and the director of construction services firm PT Sumigita Jaya, Herlan bin Ompo, to five and six years in jail, respectively, after finding both executives guilty of causing state losses.
Both Ricksy and Herlan must also pay resepctive fines of Rp 200 million ($20,600) and Rp 250 million, according to the court’s verdict.
Green Planet was ordered by the court to refund $3.089 million in state losses within a month or the court would confiscate the company’s assets, while Sumigita was ordered to reimburse $6.9 million in state losses.
The sentences were lighter than those sought by prosecutors from the Attorney General’s Office (AGO), who wanted Ricksy sentenced to 12 years in prison and a Rp 1 billion fine or another six months in prison, and Herlan sentenced to 15 years in prison and a Rp 1 billion fine or another six months in jail.
The two companies were hired by CPI to execute its bioremediation program from 2003 to 2011 at the company’s oil and gas field in Riau.
Bioremediation is a method in which metabolic microorganisms are used to remove pollutants for environmental conservation.
(source: The Jakarta Post)