The Indonesian Forum for Budget Transparency has called for an investigation into an untendered office space procurement by state upstream oil and gas regulator BP Migas that it says could cost the state billions.

The budget watchdog, known as Fitra, accused BP Migas of bypassing tender procedures in signing a deal with the company Sanggarcipta Kreasitama for office space in South Jakarta at a cost of Rp 76 billion ($8 million).

Fitra questioned BP Migas' decision to procure the space for Rp 76 billion and pay Rp 300 billion in rent for five years, an amount it says is enough to build a whole new office space.

Uchok Sky Khadafi, coordinator of Fitra, said late on Friday that BP Migas did not negotiate the procurement price with Sanggarcipta as stated in standard government tender procedures.

"This procurement reeks of corruption. There was no tender. KPK must step in to investigate," Uchok said, referring to the Corruption Eradication Commission.

Fitra, citing the Supreme Audit Agency (BPK), said BP Migas started looking in September 2010 to move from its office space in the Patra Jasa building on Jalan Gatot Subroto in South Jakarta. BP Migas appointed property consultant Procon International to find a suitable building. Procon recommended the Wisma Mulia, another building on the same street.

Sanggarcipta, the operator of Wisma Mulia, agreed to the procurement arrangement with BP Migas in November 2010.

Sanggarcipta offered BP Migas an office space of 29,000 square meters, stretching from Wisma Mulia's 22nd floor to the 40th floor, to be leased for five years with a fee of Rp 345.9 billion, with an additional procurement fee of Rp 76 billion.

BP Migas negotiated the rental fee down to Rp 300 billion, but did not negotiate on the procurement fee.

Uchok said that BP Migas' lack of negotiation could cause a state loss of up to Rp 76 billion. "BP Migas did not carry out a price estimation before relocating its office. It skipped that process because the lease at Patra Jasa was running out," he said.

Uchok also questioned why BP Migas would spend Rp 300 billion to rent an office for five years when the money could be used to build a new building. As a comparison, the KPK requested a budget of Rp 200 billion from the House of Representatives to build a new building for its office space.

"This is clearly a waste of government money. It totally contradicts what the president said about saving the state budget," he said.

I Gde Pradnyana, the deputy of operation control at BP Migas, said that the company cooperated with BPK to carry out an internal investigation into potential corruption in the case last year. "Our internal affairs and BPK concluded that there was nothing wrong. No one was punished," Gde said.

Gde refused to comment when asked why BP Migas spent Rp 300 billion to rent a building. "We have explained our reasons to BPK," he said, without giving further details.

Gde said that BP Migas was ready to be questioned by the KPK. "Be my guest. We will explain everything to them," he said.