Three ministers recommend Perta Oil to import crude from Iraq

The president of state oil firm Pertamina, Baihaki Hakim, revealed on Tuesday that three ministers, namely the mines and energy minister, the foreign minister and the industry and trade minister, had recommended Pertamina to appoint Perta Oil as the sole importer of crude from Iraq under the United Nations' oil for food program.

"True, there were recommendations from three ministers, but it was Iraq that decided to chose which trader it wanted," Baihaki told reporters on the sidelines of a hearing with the House of Representatives' Commission VIII on mines and energy.

Besides Perta Oil, Baihaki said that the government also presented a list of other traders. But he refused to name them.

Pertamina normally uses only two big crude oil traders, namely Perta Oil and Permindo. As Permindo has been dissolved, Perta Oil is practically the sole oil trader for Pertamina.

Perta Oil, Baihaki claims, is currently totally controlled by Pertamina after the state oil firm bought out shares owned by former president Soeharto's family members, including son Bambang Trihatmodjo and cousin Sudwikatmono.

Baihaki said Iraq chose Perta Oil because there was Pertamina standing behind the company. So, there would be a guarantee from Pertamina that the crude oil from Iraq would be delivered and sold on time to Indonesia.

Meanwhile, Minister of Industry and Trade Luhut B. Panjaitan acknowledged that he had recommended Perta Oil, arguing that the company was the most capable crude trading company in Indonesia among about 20 trading companies filing their proposals to import crude from Iraq.

"There are no corruption, collusion and nepotism indications in the appointment (of Perta Oil)," Luhut said angrily. "What's tender for? Now, everything has been transparent, if it is capable why not."

Luhut said that the government would try hard to increase the value of barter trade with Iraq under the UN's oil for food program to $1 billion next year. (*)