Pertamina denies corruption allegations
Fitri Wulandari, Jakarta
State oil and gas company PT Pertamina dismissed on Sunday allegations it had entertained a number of legislators on tours to Hong Kong and South Korea in order to gain their approvals for the planned sale of two giant oil tankers.
Pertamina's spokesman Hanung Budya Yukyanta confirmed the legislators were touring the two countries but it was funded by the state rather than Pertamina.
The tour was aimed at allowing the members of the House of Representatives' Commission VIII, which oversees energy affairs, to get information from South Korean shipbuilder Hyundai Heavy Industries, which is building two Very Large Crude Carriers (VLCC)
"The visit, which started on June 13 is part of transparency in the process to invest in the two VLCCs. It is part of the implementation of good corporate governance," Hanung said in the press statement.
The legislators also visited Hong Kong to be debriefed by Goldman Sachs, Pertamina's consultant for the planned sale of the two tankers, on the latest situation of the global tanker market, Hanung said.
The tour is the latest issue surrounding the controversial sale of the company's two giant oil tankers.
Kompas reported on Sunday that 30 legislators of Commission VIII, some with their spouses, accompanied by two House members and a senior official of Pertamina, took part in the tour. But, when contacted by cellular phone on Saturday, some of the legislators insisted they were still in Indonesia, rather than in Korea or Hong Kong.
Head of Pertamina's labor union Otto Gewa Diwara insisted that Pertamina entertain the legislators so that they would not block the planned sale of the two tankers.
Under the leadership of the former president Baihaki Hakim, Pertamina decided to buy two VLCCs for a total of US$130 million in 2002, each with a capacity of 260,000 deadweight tons and a capacity of 2 million barrels of crude. The tankers are scheduled to be finished next month.
Baihaki said by owning the two tankers, Pertamina would save fuel transportation costs by up to $7 million a year. Furthermore, it would provide Pertamina a stronger bargaining position in dealing with tanker owners, who often force Pertamina to pay very high leasing fees.
However, the new management, under president director Ariff Nawawi, has decided to sell the two tankers, citing cash flow problems, while arguing it was cheaper to transport crude oil and other fuel using leased tankers than the ones owned by Pertamina.
Operating a VLCC would cost Pertamina $45,000 a day while leasing a similar carrier would only be $20,000 a day, Ariffi said.
However, consultant Japan Marine has stated that the operating cost for a VLCC would be $27,697 per day and an audit by the State Comptroller (BPKP) has also said the purchase of the tankers was on "the right track".
The decision has sparked suspicions that the new management had hidden motives behind the planned sale, including that they want to continue enjoying commissions from tanker owners. Pertamina was known as one of the most corrupt companies during former President Soeharto's administration.
Hanung insisted on Sunday the decision to sell the tankers is a strategic one considering shipping is not the company's core business. Cash flow problems are also a factor behind the decision.
"As a limited liability company, Pertamina now focuses on gaining profit. The funds for the sale will be used to improve and develop core business apart from strengthening the domestic tanker fleet," he said.
The sale will be conducted based on cash-on-delivery. The prices will have to be above market price, Hanung said.
Pertamina operates 143 tankers. It owns 30 tankers while the remainder are leased.