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Freeport’s Contract Extension Case and the ‘Gasoline Godfather’

At the center of the case is the allegation by Energy and Mineral Resources Minister Sudirman Said that House of Representatives (DPR) Chairman Setya Novanto had intensively approached PT-FI’s top executives and discussed efforts to extend the firm’s contract.



“They have sown the wind, and they shall reap the whirlwind,” says a proverb.

This admonition could suitably apply to any parties involved in the burning case of the contract extension of copper and gold mining giant PT. Freeport Indonesia (PT-FI).

At the center of the case is the allegation by Energy and Mineral Resources Minister Sudirman Said that House of Representatives (DPR) Chairman Setya Novanto had intensively approached PT-FI’s top executives and discussed efforts to extend the firm’s contract.

In his written report to DPR’s Ethics Council (MKD) on Monday (11/11), Minister Sudirman said Setya Novanto had in his discussions with PT-FI executives demanded it to award its shares to President Jokowi and Vice President Jusuf Kalla if the two state leaders support its contract extension.

On Tuesday (12/11), Setya Novanto publily admitted that he had met three times with PT-FI president director Maroef Sjamsoeddin, which further fired up public hullabaloo. The House speaker fully denied however that he had demanded PT-FI shares for the President and Vice President, which some people doubted.
Meanwhile, amid the mounting public debates and all the confusions caused, the public is now keeping a close eye to any new steps to be taken by Minister Sudirman, the House’s Ethics Council, PT-FI, Setya Novanto, and possibly law enforcement authorities.

And, the one man the public no doubt does want to miss out in PT-FI’s contract case at the moment is the unexpected emergence of Reza Chalid.
Widely known in the business community but quite less popular in Indonesia’s public at large, Reza had a couple of times joined Setya Novanto to meet with Maroef Sjamsoeddin and other top officials of PT-FI. Reza’s attendance in those meetings, which was admitted by Setya Novanto, raised many eyebrows.
Setya Novanto this week referred to Reza as ‘my friend’. According to the House Speaker, Reza was capable to help him counter the maneuvers of PT-FI’s officials by persuading them to honor Indonesian laws about contract extension. PT-FI’s contract with the Indonesian government for its Grassberg mining operation in Papua will expire in 2021 and negotiations for contract extension can be conducted two years before it.

Then, who is Reza Chalid actually? Some local media call him the ‘Gasoline Godfather’ who owns Singapore-based Global Energy Resources and several subsidiaries and allied firms. While he is said to have links to the ‘Oil Mafia’, Reza is listed as the 88th wealthiest man in Indonesia, according to Globe Asia magazine.
Energy Resources sold oil to Singapore-based Petral which is a subsidiary of state oil and gas firm Pertamina.

Reza, 55, was known to be close to Hatta Rajasa who was the running mate of Prabowo Subianto in last year’s presidential election. In the election, Prabowo and Hatta narrowly lost to Jokowi and Kalla. Reportedly, Reza was and is still close to many well-placed government officials and politicians in Indonesia.
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