Newspaper article International Herald Tribune

Oil Regulator Arrested in Indonesia ; Bribery Case Is New Blow as Country Struggles to Right Its Energy Sector

Newspaper article International Herald Tribune

Oil Regulator Arrested in Indonesia ; Bribery Case Is New Blow as Country Struggles to Right Its Energy Sector

Article excerpt

Rudi Rubiandini, who took over the Special Task Force for Upstream Oil and Gas Business Activities in January, was detained for questioning by the independent Corruption Eradication Commission.

Indonesia's anti-corruption agency has arrested the head of the country's oil and gas regulatory authority in connection with a bribery investigation following a raid on his home, officials said Wednesday, in the latest black eye for the country's troubled energy sector.

Rudi Rubiandini, a former deputy energy minister who took over the Special Task Force for Upstream Oil and Gas Business Activities in January, was being detained for questioning by the independent Corruption Eradication Commission, known as the KPK, after being arrested Tuesday night, said Elan Biantoro, a spokesman for the task force.

"They are still questioning him and we don't know the progress," he said. "The KPK came to our offices this morning and sealed off Mr. Rudi's private office. We're guessing they will visit again and search for evidence" related to the bribery case.

On Tuesday evening, KPK investigators went to Mr. Rubiandini's house in South Jakarta and found him with $700,000 in cash, Johan Budi, a KPK spokesman, told reporters. Two men later identified as representatives of an oil trading company named Kernel Oil were at Mr. Rubiandini's home at the time of the raid and were also arrested, he said.

Mr. Elan said the Upstream regulatory body had no official relationship with Kernel, as it is a foreign trading company and not involved in oil exploration or production in Indonesia. A person who answered the phone at Kernel's office in Singapore refused to comment or forward any calls.

The arrest of Mr. Rubiandini is the latest in a series of problems that have increased uncertainties for foreign investors in Indonesia at a time when the country is hoping to bolster oil production, which has plummeted during the past decade.

Last November, Indonesia's Constitutional Court shocked the sector by dissolving the Upstream agency's predecessor, an independent state body known as BPMigas, after a legal challenge by figures related to the country's leading Islamic-based political parties. …

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