9 trading firms appointed to import crude from Iraq

Minister of Industry and Trade Luhut B. Pandjaitan said the government had appointed nine local companies besides PT Petra Oil to participate in the next phase of the importation of crude oil from Iraq for a barter deal under the UN's oil for food program.

The nine firms are PT Concord Perdana Indonesia; PT Gemilang Energindo Sentosa; PT Srimukti Gas Corp.; Golden Spike Energy Indonesia Ltd; PT Utama Bressindo Persaja; PT Istana Karang Laut; PT Accia Nusantara; PT Ramada Agung Internasional; PT Swadaya Sarana Berlian.

"Only local companies can participate in the program. They must first acquire the UN's approval before being able to export their goods to Iraq," he said at a hearing with the House of Representatives' Commission V on trade and industry.

The government has also received proposal from around 140 companies to participate in the next phase of the barter deal to export Indonesian food and medicines to Iraq. Luhut said that he would allow as many exporters as possible to use the opportunity to export products to Iraq.

Under the latest contract, the government appointed only Petra Oil to import crude from Iraq, that sparked protests from various quarters, and 15 companies to export Indonesian products to Iraq.

Petra, Luhut said, had only imported $68 million worth of crude from Iraq, while the 15 companies managed to export about $11 million worth of food and medicines - still far below the agreed barter value of $500 million for this year.

Nevertheless, the 15 exporting companies had secured a $99 million worth contracts with Iraq importers.

"We're under-capacity to meet the target. It's so sad that we can't fully take advantage of such a good opportunity," he said.

The minister also revealed that the Iraq government had agreed to increase the value of the barter deal to $1 billion next year.

"We must catch this as an opportunity to boost our non-oil exports, and at the same time import crude from Iraq that we still need," Luhut said.

Luhut also refuted accusations of corruption, collusion and nepotism, locally known as KKN, in the appointment of Petra Oil as the sole importer of crude oil from Iraq under the latest barter contract.

"There is no KKN in the implementation of the oil for food program. Everything we have done has been pursued transparently, including the decision taken by the three ministers to implement this program," Luhut said.

The three ministers that given their recommendations for Petra Oil include Luhut, Foreign Minister Alwi Shihab and Minister of Mines and Energy Susilo Bambang Yudhoyono.

"There is a misunderstanding about the joint decree signed by the three ministers," Luhut said. The decision taken by the three ministers because all the three were directly responsible with the deal. It involves the foreign minister because it deals with the UN, it involves the mines and energy minister because it deals with oil, and it involves the industry and trade minister because it deals with international trade.

Petra Oil is currently controlled by state oil firm Pertamina. It used to be owned by members of the former president Soeharto family. (*)