Baihaki defends Pertamina's purchase of giant oil tankers
Baihaki defends Pertamina's purchase of giant oil tankers
The Jakarta Post, Jakarta
Baihaki Hakim, former president of state oil and gas firm PT
Pertamina, defended on Monday the company's earlier purchase of
two giant oil tankers, saying it was a profitable long-term
investment.
He said the two very large crude carriers (VLCC), which are
being built by South Korea's Hyundai Heavy Industries, could save
transport costs by up to US$7 million per year.
"When we made the decision, the plan to buy the tankers were
economically viable," Baihaki told reporters before a hearing on
the matter with House of Representatives Commission VIII, which
oversees mining and energy-related issues.
Baihaki added that Pertamina had obtained a relatively low
price for the tankers, as the order was made in 2002, when many
shipping yards were suffering a decline in business volume.
The hearing was called because Pertamina president Ariffi
Nawawi, who succeeded Baihaki last October, planned to sell the
two VLCCs.
The shipbuilding contract for the VLCCs was signed in March
2003 and the vessels are scheduled to be completed this July.
Each vessel has a capacity of 260,000 deadweight tons and can
carry up to 2 million barrels of crude.
The purchase of the two VLCCs was part of the company's plan
to expand its tanker fleet and boost efficiency, under which
Pertamina is to buy 38 tankers by 2007. Pertamina currently owns
30 tankers and charters 113.
Pertamina had bought six tankers before the new management
under Ariffi canceled the purchasing contract for the remaining
tankers.
Ariffi has argued that the purchase of the two VLCCs, worth
$131 million, was unprofitable, pointing out that operating a
VLCC would cost Pertamina $45,000 a day, while leasing the same
vessel cost about $20,000 a day.
According to consultant firm Japan Marine Science, however,
the operating cost of a VLCC is only $27,697 per day.
Pertamina has opened a tender for the sale of the two vessels,
to which 60 interested parties have responded. Goldman Sachs has
been appointed as consultant to the tender.
Otto Diwara, chairman of the Pertamina workers union,
suspected corruption to be the motive behind the VLCC sales plan,
and reported the case to the government-sanctioned Corruption
Eradication Commission (KPK).
"We have asked the KPK to order Pertamina's board of directors
to stop the sales process," Otto said in a press release on
Monday.
The union's suspicion was founded on an audit result by the
Development Finance Comptroller (BPKP) and Japan Marine Science
on the VLCC purchase.
The comptroller said the purchase was an appropriate step and
was made at a reasonable price.
It also said an expansion and rejuvenation of Pertamina's
vessel fleet was a must to ensure a secure domestic supply of
crude, and that owning their own VLCCs would leverage the firm's
bargaining power in the international crude market.