Iraq's oil-for-food program spark controversies

The selection of oil trading company Perta Oil, a subsidiary of state oil and gas company Pertamina, as the coordinator of Indonesian companies in handling the oil-for-food barter between Iraq and Indonesia has caused controversies.

Director general of oil and gas at the Ministry of Mines and Energy Rachmat Sudibyo told Petromindo.Com on that Perta was appointed based on its experience in oil trading.

The company had proved its capability to lift Iraq's oil in the first phase of the barter program.

"Lifting the oil is not easy, should be done by an experienced company. Who will take responsibility for any failure in the oil lifting?" Rachmat said.

The oil-for-food barter program is part of Iraq's oil-for-food scheme approved by the United Nations to alleviate the hardship experienced by the Iraqi people following the economic embargo imposed on the country. The embargo was imposed after Iraq lost the war against the United States and its allies.

Rachmat said the selection of Perta was conducted by the so-called Indonesian Task Force or Indonesia-Iraq Chamber of Commerce based on the recommendation from Minister of Mines and Energy, Minister of Foreign Affairs and Minister of Industry and Trade.

Minister of Foreign Affairs Alwi Shihab said in a seminar on Thursday Perta Oil would coordinate 20 companies involved in the project.

However, Kontan weekly tabloid, in its latest edition published on Saturday, quoted an official of the Indonesian Task Force as saying that the task force was not involved in the pre-qualification process of the companies which were interested in the project.

Thus, the selection of Perta smacked collusion, nepotism and corruption, Kontan said.

Kontan further speculated that former President Soeharto's crony Muhammad Bob Hasan and Soeharto's son Hutomo Mandala Putra, still had stake in Perta Oil.

But Pertamina's president Baihaki Hakim insisted that Perta Oil is now wholly owned by Pertamina.

Pertamina bought the total 51 percent shares of Bob Hasan and Hutomo in the oil trading company in 1998, Baihaki said. (*)