Muklis Ali, Jakarta – Indonesia said on Friday it had found evidence of corruption in deals between state oil firm Pertamina and 159 companies – most linked to the family and friends of former President Suharto – and may renegotiate them.

The Mines and Energy Ministry said stamping out corruption in Pertamina would save the company $64.7 million in dollar expenses and 313.3 billion rupiah ($34.8 million) in rupiah costs.

"Pertamina has evaluated which projects indicate corruption, collusion and nepotism. The results of the evaluation have been reported to the minister of mines and energy and there are 159 companies that fall into this category," Djoko Darmono, the ministry's secretary-general, told reporters. The suspect projects and contracts included deals in oil exploration, gas purchasing, gasoline additives and the procurement of catalysts for Pertamina refineries, the ministry said.

Pertamina exploration director Priyambodo Mulyosudirdjo said the firm had appealed to foreign oil companies operating in Indonesia to take over shares owned by the Suharto family in joint projects. "We appeal to foreign oil companies to take over the shares owned by the family because of the smell of collusion," he said. "We will renegotiate contracts with those companies which won privileges or got contracts through malpractice."

Mulyosudirdjo said Pertamina had in the past been forced to give production sharing contracts (PSCs) and technical assistance contracts (TACs) in the exploration sector to Suharto associates without putting them to tender. "We will abolish the privileges and will bring back the standard procedures and rules, that is through tender," he said. "Pertamina will open tenders for contracts, including in exploration and procurement for refineries or exploration equipment," Mulyosudirdjo said.

According to the ministry, eight PSCs and six TACs were categorised as suspect. One of the PSCs involved the onshore and offshore Kangean block in East Java which is operated by ARCO of the US in a joint venture with PT Bimantara, controlled by Suharto's second son Bambang Trihatmodjo.

Pertamina was also renegotiating the tariffs for chartering tankers from Humpuss, controlled by Suharto's youngest son Hutomo "Tommy" Mandala Putra, the ministry said. It said Pertamina had cancelled plans to co-operate with companies controlled by Suharto's family and associates in the proposed construction of private refineries. PT Asia Pasific Petroleum, controlled by Trihatmodjo, and PT Buana Ganda Perkasa, controlled by Suharto's half-brother Probosutedjo, had both planned plan to build 300,000 barrels per day (bpd) refineries in East Java in co-operation with Pertamina.

Pertamina said the government audit body was investigating Indonesia's eighth liquefied natural gas plant project in Bontang, East Kalimantan. The plant is currently under construction by contractor PT Inti Karya Persada, controlled by Bob Hasan, a close associate of Suharto.