ARCO denies deal with U.S. Circle group

ARCO denies deal with U.S. Circle group

JAKARTA (JP): The Indonesian arm of American oil and gas firm
Atlantic Richfield Company (ARCO) has denied signing a deal with
American service contractor Circle International Group Inc., a
spokesman of state oil and gas company Pertamina said on Friday.

Spokesman for Pertamina's foreign contractors management body
Sidick Nitikusuma said ARCO admitted there was a deal between
ARCO International and Circle for the provision of transportation
and logistics for ARCO's international upstream oil and gas
operations.

But ARCO Indonesia, which is on a Pertamina production sharing
contract, said it was exempted from the deal.

"The deal does not bind and/or oblige ARCO Indonesia to use
Circle services," Sidick said.

Circle did not consult with ARCO before releasing a press
statement claiming ARCO Indonesia's operations were covered in
the deal, he said.

"Circle issued the press release prior to a consultation with
ARCO," he said.

Circle was quoted by Dow Jones last Friday as saying in the
United States that it had a multiyear contract with ARCO to
provide full-service global transportation and logistics services
for ARCO's upstream international oil and gas operations.

It said the contract would generate four million kilograms of
ocean freight, 750,000 kilos of air freight and customs brokerage
and logistics services revenue annually.

The company claimed it had begun managing the movement of
materials and equipment to ARCO's field operations in Algeria,
and it would add services to China, Indonesia and other sites in
the coming months, as well as managing the import of geological
samples.

In response to the report, Pertamina sent a letter to ARCO
asking for clarification of whether the contract had been awarded
to Circle according to regulations.

Presidential Decree No. 16/1994 on the spending of the state
budget stipulated that oil and gas contractors should hold
tenders for their projects in Indonesia.

Foreign companies are allowed to participate in the tender
process but priority is given to Indonesian companies and foreign
companies which have representatives in the country.

Sidick said he was not aware that Circle had a representative
in Indonesia. (jsk)