Oil watchdog chief arrested

The arrest of Rudi Rubiandini, chief of upstream oil and gas regulator SKKMigas, dealt another blow to oil and gas executives in Indonesia, with the industry still recovering from the 2012 disbandment of the previous regulator BPMigas.

Less than eight months after his appointment by President Susilo Bambang Yudhoyono, Rudi was arrested by investigators of the Corruption Eradication Commission (KPK) for allegedly accepting bribes from executive of PT Kernel Oil Pte Ltd, a local arm of Singapore-based Kernel Oil, focusing on oil and oil product trading.

SKKMigas was created as a temporary replacement for BPMigas. 

SKKMigas deputy chief Johanes Widjonarko was appointed on Wednesday to assume the leadership of the oil and gas watchdog following Rudi’s arrest.

Energy and Mineral Resources Minister Jero Wacik said on Wednesday that according to regulations issued as a legal basis for SKKMigas, the deputy chief must assume leadership should the chief be “unable to do his tasks”.

“He [Widjonarko] will serve as the acting chief of SKKMigas for the time being,” Jero said, while Widjonarko could not be reached for comment.

The Indonesian Petroleum Association (IPA) chairman Lukman Mahfoedz, also chief of the country’s biggest publicly listed oil and gas company, PT Medco Energi Internasional, said on Wednesday that projects would require direct approval from SKKMigas chief and would make the appointment of an acting chief crucial.

Other oil and gas executives in the country have expressed their concerns about the industry following the arrest of Rudi, who was finally named a suspect by the KPK for bribery allegations.

 

Operators hope there are no disruptions

Erwin Maryoto, the local spokesman for American oil and gas giant ExxonMobil, which operates the Banyu Urip oil field in East Java, said his company hoped Rudi’s detention would not harm its operations.

“We do not expect disruptions to the ongoing business process,” he said.

Separately, Dony Indrawan, the spokesman of US-based Chevron’s local subsidiary, Chevron Pacific Indonesia, the largest oil producer in Indonesia, said the company “expects SKKMigas to operate normally in managing the oil and gas industry in Indonesia and in supporting the committed work programs”.

Komaidi Notonegoro, an energy analyst with the Jakarta-based think-tank ReforMiner Institute, said Rudi’s arrest would further send negative signals to foreign investors because corruption had entered the heart of the upstream industry.

“Foreign investors now see that in Indonesia, the problems are very complex and thus they will perceive Indonesia to be an unfavourable place to invest their money,” he said.