Pertamina loses $30.7m in production stoppages
Pertamina loses $30.7m in production stoppages
JAKARTA (JP): State oil and gas company Pertamina said on
Tuesday it had suffered a loss of US$30.7 million over the past
four years due to production stoppages at its giant refinery in
Balongan, West Java.
Pertamina president Soegianto said the refinery's residue
catalytic cracker (RCC), which produced liquefied petroleum gas
(LPG) and the Premium, Super TT and Premix gasoline brands, had
stopped production for a total of 249 days since it started
operating in late 1994, due to technical problems.
In addition to losing potential sales of US$30.7 million,
Pertamina had also been forced to spend $2.2 million plus Rp 4.8
billion on repairing the cracker, Soegianto said.
"But, we and our consultants have completed the technical
audit on the refinery and we hope to thoroughly repair the
refinery during its overhaul in July 1999," Soegianto said during
a hearing between the Ministry of Mines and Energy and House of
Representatives Commission V for mines and energy, industry and
trade, investment, cooperatives, manpower and the environment.
Pertamina's consultants are the United States designing and
engineering company Universal Oil and British Petroleum.
The US$2.45 billion Balongan refinery was built by Pertamina
with contractors JGC Corporation of Japan and the U.S.'s Foster
Wheeler from 1990 to 1994.
Project financing was provided by Java Petroleum Investment
Co. Ltd. -- a consortium grouping Mitsui Corp. Marubeni Corp.
Sumitomo, Itochu and 20 Japanese banks.
The refinery was initially designed to supply export markets,
which is why it is also called the Exor (export oriented) I
Balongan refinery.
Designed with a processing capacity of 125,000 barrels per day
(bpd) of crude oil, the refinery has two production units: the
so-called crude distillation unit (CDU) and the RCC.
The CDU processes crude oil into naptha, kerosene, automotive
diesel and residue; and RCC turns the residue from CDU into LPG
and Premium, Super TT and Premix gasoline.
The refinery's RCC is billed as the world's biggest with a
processing capacity of 83,000 bpd, compared to other RCC units in
the world which have a capacity of between 30,000 and 40,000 bpd.
But the number of breakdowns has led analysts to speculate
that its construction is off-spec.
They believe Pertamina's officials marked up the prices of
materials used for the refinery's construction.
Soegianto explained the refinery's RCC first experienced
failure on Dec. 27 1994, several days before it was scheduled to
be inaugurated by former president Soeharto.
The failure forced the refinery to stop production for 96
days.
The cracker stopped production again for 26 days from Feb. 6,
1997 and for 127 days from February this year.
According to its design, the cracker should be able to operate
for two years before taking a scheduled 40-day break.
Minister of Mines and Energy Kuntoro Mangkusubroto has
requested the Attorney General and the State Comptroller Agency
to conduct a legal and financial audit respectively on the
refinery.
Kuntoro recently said both agencies were expected to submit
the results of their investigations to him next month. (jsk)