ARCO's deal with Circle questioned

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)