Pertamina told to check contract irregularities<\/p>\n
JAKARTA (JP): Minister of Mines and Energy Kuntoro
\nMangkusubroto has called on state oil and gas company Pertamina
\nto check possible irregularities in oil and gas contracts awarded
\nto foreign companies in joint ventures with former president
\nSoeharto's family and cronies.<\/p>\n
\"Pertamina should check if the contracts contain irregular
\nclauses regarding production splits between the government and
\ncontractors, taxation or contract duration,\" Kuntoro said on
\nFriday.<\/p>\n
He said if no \"irregular clauses\" were found in the contracts,
\nthe government would not interfere in the deals, including the
\nacquisition of shares owned by Soeharto's family and cronies by
\ntheir foreign partners.<\/p>\n
But, he said, if the contracts contained irregular clauses
\nthat caused losses for the government, the government would take
\nover the shares owned by Soeharto's family and cronies and ask
\nforeign contractors to deal with the government rather than
\nSoeharto's family and cronies in any possible share acquisitions.<\/p>\n
\"The foreign contractors should give the payment to the
\ngovernment if they want to buy shares which smack of KKN,\"
\nKuntoro said at a weekly press conference.<\/p>\n
KKN is the Indonesian acronym for corruption, collusion and
\nnepotism.<\/p>\n
Several foreign contractors have acquired or are seeking to
\nacquire the shares owned by Soeharto's family and cronies in
\ntheir joint ventures in order to comply with Pertamina's advice
\nto sever such ties.<\/p>\n
Pertamina's director of exploration and production, Priyambodo
\nMulyosudirdjo, has said that the advice was given to foreign
\ncontractors to prevent their operations from being troubled
\nbecause of the involvement of Soeharto's family and cronies in
\ntheir companies.<\/p>\n
Atlantic Richfield Indonesia Inc. (ARII), a subsidiary of
\nUnited States energy company Atlantic Richfield Company (ARCO),
\nand its partner British Petroleum have taken over the 10 percent
\nstake owned by the Bimantara group in a production sharing
\ncontract (PSC) for the Kangean block in East Java. Bimantara is
\nlinked to Soeharto's son Bambang Trihatmodjo.<\/p>\n
ARII president Leon Codron earlier said that the company had
\ngiven Bimantara an option to buy a 10 percent stake in the block,
\nbut Bimantara never exercised the option.<\/p>\n
Codron cited a clause in PSC contracts awarded from the late
\n1970s saying that foreign oil and gas contractors had to offer
\nnational companies an option to buy a 10 percent stake in the
\ncontract areas at the beginning of production.<\/p>\n
Under such contracts, Pertamina has the right to appoint a
\ncompany to buy the shares, and if the company does not exercise
\nthe option within three months the option is eliminated.<\/p>\n
\"Bimantara had been given the option to buy our shares but it
\nhas never exercised that option,\" Codron explained.<\/p>\n
Unocal Indonesia Company, a subsidiary of U.S. energy company
\nUnocal Corp., is seeking to buy the 10 percent stake owned by PT
\nNusamba in the Rapak and Ganal PSC block in East Kalimantan.
\nNusamba is linked to Soeharto's golfing partner Muhammad \"Bob\"
\nHassan.<\/p>\n
U.S. company Mobil Corp., through its Australia-based
\nsubsidiary Ampolex (CEPU) Pty Ltd., is also seeking to acquire
\nHumpuss Patragas' 51 percent stake in the Cepu block bordering
\nCentral and East Java. Humpuss is controlled by Soeharto's son,
\nHutomo Mandala Putra, also known as Tommy.<\/p>\n
Kuntoro said that thus far Pertamina had only found irregular
\nclauses in the contract awarded to Humpuss Patragas.<\/p>\n
\"As such, if Ampolex (which has a 49 percent stake in the
\nblock) wants to buy Humpuss' stake in the block, the company
\nshould give the money to the government, not to Humpuss,\" Kuntoro
\nsaid.<\/p>\n
Kuntoro, however, did not reveal the alleged irregular clauses
\nin Humpuss' contract.<\/p>\n
According to data from Pertamina, Humpuss signed a technical
\nassistance contract (TAC) with Pertamina in 1990 to develop the
\nstate company's 1,670 square kilometers oil and gas block in Cepu
\nand neighboring areas.<\/p>\n
Under the TAC contract, Humpuss, which was to develop areas
\nalready explored by Pertamina, had to give Pertamina 65 percent
\nof the block's oil output and 70 percent of its gas output.<\/p>\n
In comparison, PSC holders, which have to develop unexplored
\nareas, must give Pertamina 85 percent of their oil output and 70
\npercent of their gas output. (jsk)<\/p>",
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