Laksamana gives go-ahead to Pertamina tanker sale

Laksamana gives go-ahead to Pertamina tanker sale

Fitri Wulandari, The Jakarta Post, Jakarta

State oil and gas firm PT Pertamina may go ahead with the
controversial sale of its two giant tankers, said State Minister
of State Enterprises Laksamana Sukardi.

Laksamana, who is also president commissioner of the company,
said on Thursday that the sale was part of the company's
corporate action to return to its core business, and there was no
need for the government to intervene.

"It should be made clear whether Pertamina is a large shipping
line with all the attendant risks and overheads, or is it an oil
and gas company? We'll return to our core business," Laksamana
said.

Laksamana added that proceeds from the tanker sale would help
significantly to resolve Pertamina's cash flow problems.

"It is of paramount importance for Pertamina to survive," he
said.

The House of Representatives earlier recommended the
government cancel the plan, saying that keeping the tankers would
be more beneficial for the company in the longer term.

Owning the vessels would be profitable for the company as a
looming shortage of double-hulled, Very Large Crude Carriers
(VLCC) such as those owned by Pertamina is likely to lead to an
increase in leasing fees in the future.

Pertamina is in the process of selling its two VLCCs, which
were bought by the previous management in 2002 to reduce fuel
transportation costs. But the current management has said that it
wants to sell the tankers to raise cash and improve its cash flow
situation.

Norway-based Frontline Ltd has claimed it has bought the
tankers for US$184 million, although Pertamina has said the deal
has yet to be finalized.

Each vessel has a capacity of 260,000 deadweight tons and is
able to transport some 2 million barrels of crude oil. Both
vessels are still under construction by Hyundai Heavy Industries
and will be delivered in July and September.

But the sale plan has raised suspicion that rent-seekers
aiming to exploit Pertamina by leasing tankers at high prices are
behind the sale plan.

Laksamana dismissed this rumors as baseless. "The process is
open to audit. It is an open bid and transparent," he said.

Meanwhile, a senior government official confirmed that despite
the cash flow problem, Pertamina had decided to increase the
salaries of its board of directors and commissioners by more than
50 percent.

Roes Aryawijaya, a commissioner at Pertamina and also deputy
at the Office of the State Minister of State Enterprises, said
that the salary increase was in appreciation for the hard work of
the Pertamina directors in managing the company.

"The new directors have run the company well. So, it is to be
expected that their salary is increased as a token of
appreciation," Roes said.

The president director of Pertamina will take home some Rp 150
million (US$16,000) per month, while other directors will pocket
about Rp 140 million per month.

The president commissioner will receive Rp 75 million, while
other commissioners will get Rp 60 million.