The Oil and Gas Mafia is Stealing $4.2 Billion From Indonesia Every Year

In a land full of corruption, the most powerful criminals in Indonesia might be men and women that control the country’s oil and gas industries. According to one industry expert, they’ve cost the country around $42 billion dollars in lost revenue over the last ten years.

In an article from today’s Kompas entitled “Mafia Migas, Who Are They?” Erwin Usman, executive director of Indonesian Mining and Energy Studies, breaks down the history and impact of mafia migas (migas being short for oil [minyak] and gas) on Indonesia’s economy. He isn’t scared to name names either.

“The names Kuntoro Mangkusubroto, Purnomo Yusgiantoro, Ari Soemarni, Muhammad Reza Chalid, R Priyono and Karen Agustiawan are all on the list of names that we should never take our eyes off of when we question the incompetent governance of the Indonesian oil and gas sector at the downstream level,”

The people Erwin lists are among the most powerful in the country. Kuntoro Mangkusubroto is a former Minister of Mining and Energy who also served as the director of PLN from 2000-2001.  Purnomo Yusgiantoro was once the president-secretary general of OPEC and the Indonesian Minister of Energy for three presidents. Karen Agustiawan is the current president and CEO of Indonesia’s state oil and gas company Pertamina.

The mafia migas has been operating since the New Order era, with members of the cabal using Pertamina and its subsidiaries as their own personal cash comes. 

Erwin said the oil and gas mafioso were made up of members of multinational companies, bureaucrats and politicians, all working against the nations interests in order to line their own pockets. 

The mafia’s control over the country’s most lucrative industries also helped President Soeharto maintain his political supremacy. 

“The oil boom of the 80-90s, during which Indonesia was producing 1.6 million barrel per day, really gave the mafia a reason to celebrate,” Erwin said.

The fall of the New Order did not end the mafia’s control over the oil and gas industries. In fact, according to Erwin, the mafia increased its power during the reformation period after the passage of the 2001 Oil and Gas, which allowed them to rewrite the rules governing their industries to give them even more of a stranglehold.

The amount of money mafia migas has stolen from Indonesia is impossible to know for sure, but Erwin said the minimum loss had to be US $4.2 billion per year, so over the last ten years the country has lost out on some $42 billion in revenue.

“This is just the oil and gas,  it doesn’t include mafias from the food and other strategic industries. It is truly a pity for the people, especially the poor citizens, of Indonesia. The mafia and their puppets get to party, while the majority of Indonesians are forced to live in poverty and destitution,” Erwin said..

The one bright spot in the article is the fact that Erwin is a member of President-elect Jokowi’s transition team and Jokowi has said one of the goals of his presidency would be to take on the country’s various business mafias, especially the oil and gas mafia. Let’s hope he goes gangbusters on them.

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