Pertamina criticizes World Bank proposal<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
State-owned oil and gas company Pertamina criticized a
\nproposal from the World Bank for the government to sell off its
\nBalikpapan refinery in East Kalimantan and the Cilacap refinery
\nin Central Java.<\/p>\n
Pertamina's president Baihaki Hakim said Tuesday that the
\nstate company suspected the proposal was aimed at reducing
\nPertamina's refinery assets in a bid to weaken its
\ncompetitiveness in the country's fuel market when the government
\nliberalized the sector in 2005.<\/p>\n
"We have rejected the proposal," Baihaki was quoted by Antara
\nas saying.<\/p>\n
Baihaki did not give details of the proposal, but a report in
\nKontan weekly last week said the proposal was contained in a
\nletter sent by former World Bank country director in Indonesia
\nMark Baird in May this year.<\/p>\n
Baihaki said he believed certain parties, both locals and
\nforeigners, were using the World Bank to divide Pertamina up into
\nmany small companies so that Pertamina's competitors could buy up
\ntheir assets and control the country's fuel market.<\/p>\n
The Cilacap and Balikpapan refineries, which respectively have
\na capacity of 348,000 barrels per day and 260,000 barrels per
\nday, are the largest owned by Pertamina. The state company also
\nhas seven other small refineries located in Pangkalan Brandan,
\nNorth Sumatra; Dumai and Sungai Pakning, Riau; Balongan, West
\nJava; Kasim in Irian Jaya; and Cepu in Central Java. Overall, the
\nrefineries have a combined capacity of 1.05 million barrels per
\nday.<\/p>\n
Under the new oil and gas law which took effect last year, the
\ngovernment is to open up the fuel sector to competition in 2005.
\nStarting that year, private companies will be free to build
\nrefineries and sell their fuel products here.<\/p>\n
A government team is reportedly drafting a ruling to regulate
\nthe sector and the World Bank proposal is one of the inputs being
\nconsidered by the team.<\/p>",
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