The energy holding company, PT Pertamina, faced a lawsuit after cancelled the sale and purchase of liquefied natural gas with Mozambique with total valued Rp39.5 trillion (US$2.8 billion) - Photo by the Company

JAKARTA (TheInsiderStories) – The energy holding company, PT Pertamina, faced a lawsuit after aborted the sale and purchase of liquefied natural gas (LNG) with Mozambique worth of Rp39.5 trillion (US$2.8 billion). The issue was sticking out after the lawmakers asked the minister of energy and mineral resources (EMR), Arifin Tasrif, on the cases.

Based an agreement has been signed in February 2019, the state-owned firm agreed to buy 1 million tones per annum (MTPA) with Anadarko Petroleum Corp., from Singapore-based trading firm, Mozambique LNG1 Company Pte. Ltd. The contract valid for 20 years.

Initially, said former Pertamina‘ director, Basuki Trikora Putra, the purchase of LNG from Mozambique was aimed to fulfill the domestic needs and to anticipated the shortages of gas supply in the country. However, this projection missed because the supply was excessive and the import policies do not need to be implemented.

At the end of 2019, the government of Mozambique has wrote to the minister of EMR regarding the problem. They asked the buyer to immediately execute or the seller claimed for the compensation.

“Since February (2020), the board of commissioners has questioned it and asked the directors to resolve this problem properly,” said the chairman, Basuki Tjahaja Purnama last week by adding, Pertamina was also conducting an internal audit by appointing Pricewaterhouse Cooper.

Not only Mozambique, he adds, the commissioner also evaluating the purchase of LNG with American firm, Cheniere Corpus Christi, which was also dragged down. The LNG sale and purchase agreement took place in 2013 with total sizes 760,000 metric tones per year for 20 years.

Vaious cases has been hampered the state firm. As an example, Pertamina Energy Trading Ltd., (Petral) bribery case in crude oil and refinery products trading. The Corruption Eradication Commission has charged the CEO of Pertamina Energy Services Pte. Ltd., during 2009 – 2013 period, Bambang Irianto, as a suspect.

He was also served as president director of Petral before being replaced in 2015. The suspect, together with a number of the officials determined cooperated with the tender participants, one of them was the Emirates National Oil Co. Through the SIAM Group Holding Ltd., he was suspected having received at least $2.9 million for the assistance.

While, the former CEO, Karen Agustiawan, was sentenced to eight years’ imprisonment by the Jakarta Corruption Court on June 10, 2019, after being convicted in a case involving Pertamina’ investment in the Basker Manta Gummy Block in Australia.

The case began in 2009 when, the energy producer acquired a 10 percent stake of Roc Oil to work on the BMG Block through its subsidiary, PT Pertamina Hulu Energi. The company planned to produce up to 812 barrels of oil per day (bpd) from the block.

However, the block only produced an average of 252 bpd and resulting in state financial losses of Rp568 billion (US$40.28 million). Agustiawan was the first woman lead Pertamina and has more than 30 years of experience working in the field.

Anadarko is the first onshore LNG facility in Mozambique consisting of two initial LNG trains with a total capacity of 12.88 MTPA. Anadarko Moçambique Área 1 Lda, a wholly owned subsidiary of Anadarko, operates Offshore Area 1 with a 26.5 percent participating interest.

Co-venturers include ENH Rovuma Área Um, SA (15 percent), Mitsui E&P Mozambique Area1 Ltd (20 percent), ONGC Videsh Ltd., (10 percent), Beas Rovuma Energy Mozambique Ltd., (10 percent), BPRL Ventures Mozambique BV (10 percent) ), and PTTEP Mozambique Area 1 Ltd., (8.5 percent).

US$1: Rp14,100

Written by Editorial Staff, Email: theinsiderstories@gmail.com