Indonesia energy graft scandal ensnares 3 more officials

JAKARTA Fri Aug 16, 2013 7:25am EDT

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JAKARTA Aug 16 (Reuters) - A graft scandal engulfing Indonesia's energy regulator widened on Friday, with three top officials suspended and barred from travel, as media speculated the revelations could further damage the ruling party of President Susilo Bambang Yudhoyono.

The latest suspensions came just hours after Yudhoyono told parliament in an annual address that his government would keep up its battle against Indonesia's endemic corruption.

The Corruption Eradication Agency (KPK) slapped a travel ban on three senior officials of SKKMigas, which regulates Indonesia's huge oil and gas industry. The regulator then suspended them.

On Wednesday, regulator chairman Rudi Rubiandini was arrested on bribery charges, heightening the uncertainty over energy policy in Southeast Asia's biggest economy, where oil and gas production contribute a fifth of government revenue.

The heads of the regulator's crude and natural gas commercial divisions, Agus Sapto Raharjo and Popi Nafis, and the chief of operations support, Iwan Rahman, were placed on temporary leave, said interim Chairman Johanes Widjonarko, who replaced Rubiandini.

"To support this legal process at the KPK ... SKKMigas has taken steps to grant (leave) for these three," Widjonarko said.

The regulator, which has named temporary replacements for the impugned officials, said the scandal would not affect oil operations. It has existing contracts with oil majors including BP Plc, Chevron and Exxon Mobil.

Rubiandini was arrested after he was caught taking around $400,000 and a BMW motorcycle from a top official of Singapore energy trader Kernel Oil. A further $190,000 was found at his home, in the biggest cash seizure by the anti-graft agency.

After his arrest, Rubiandini told domestic media he had not engaged in corruption but may have been involved in what he described as a "gratification issue".

Kernel Oil, a small company that trades in crude and oil products from Asia, the Middle East, the Mediterranean and West Africa, has denied any involvement.

Domestic media said the scandal could deal another blow to the troubled ruling Democratic Party, which is already reeling from separate corruption cases involving several senior members, and which have contributed to a slump in its popularity ahead of next year's parliamentary and presidential elections.

Regulator SKKMigas forms part of the energy ministry, headed by Energy Minister Jero Wacik, a senior Democratic Party member.

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