ARCO's deal with Circle questioned

JAKARTA (JP): State oil and gas company Pertamina said on Friday it would question the Indonesian unit of American oil and gas company Atlantic Richfield Company (ARCO) over the transportation and logistics contracts it awarded to American service company Circle International Group Inc.

"We shall check with ARCO to see if it awarded the contract in a process consistent with prevailing regulations," the spokesman for Pertamina's foreign contractors management body, Sidick Nitikusuma, told The Jakarta Post on Friday.

Sidick said presidential decree No. 16/1994 on the implementation of the state budget stipulated that oil and gas contractors should hold tenders for their projects in Indonesia.

Under the presidential decree, 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.

"The question is, does Circle have representative here," Sidick said.

Dow Jones reported on Friday that Circle received a multiyear contract from ARCO, one of Pertamina's foreign partners, to provide full-service global transportation and logistics services for ARCO's upstream international oil and gas operations.

Circle said in a press release that the contract would generate four million kilograms of ocean freight, 750,000 kilos of air freight and customs brokerage and logistics services revenue annually.

Circle 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. (jsk)