Pertamina signs contracts with foreign firms
Pertamina signs contracts with foreign firms
JAKARTA (JP): The state-owned oil company Pertamina yesterday
signed two production-sharing oil contracts and two agreements to
set up asphalt and lube oil blending plants worth $75 million
with foreign and local companies.
The first oil contract was awarded to Overseas Petroleum and
Investment Corp., a subsidiary of the Taiwanese state-owned
company China Petroleum Corporation (CPC), and Treasure Bay
Enterprises.
CPC's president, Alex T. Y. Chang, said after the signing
ceremony that the contract requires the contractor to spend at
least US$70 million on exploration during the first ten years.
"Based on the contract, the two companies will explore 5,252
square kilometers in the Peudada block in the sea off Aceh
province," he said.
According to Chang, CPC and Treasure Bay Enterprises have 65
percent and 35 percent interests respectively in the concession.
The second oil contract was awarded to Premier Oil Pangkah
Limited, Seafield Resources (Indonesia) LLC and Amerada Hess
(Indonesia-Pangkah) to explore 3,500 square kilometers in the
Pangkah block in the sea off East Java province.
Premier has a 40 percent interest in the block, Seafield a 24
percent interest and Amerada a 36 percent equity.
During the first 10 years, Premier and its partners will have
to spend $27.1 million on exploration.
Joint ventures
Chang noted that under the other agreements his company CPC,
together with Pertamina and PT Graha Centermine, which is owned
by Bambang Trihatmodjo of the Bimantara Group, will set up two
joint ventures to establish lube oil blending and asphalt plants.
In the two joint ventures, Pertamina will have a 40 percent
stake, while CPC and Graha Centermine will each have a 30 percent
equity.
The establishment of the lube oil blending plant, which is
located in the South Sulawesi capital of Ujungpandang, will need
an investment of $50 million.
He said the lube plant, to be designed with an annual capacity
of 50,000 liters, will procure its lube base from Pertamina and
foreign suppliers.
"We'll start production in two years," he said, adding that
the company's production will be both for export and the domestic
market.
Chang said that the asphalt plant project in Balikpapan, East
Kalimantan, will need an investment of $25 million.
He noted that the plant, scheduled to come on stream in 1998,
will have a production capacity of 400,000 tons a year.
"Our asphalt production will be for export and for the
domestic market," he said, adding that the planned asphalt plant
will procure short residue raw materials from Balikpapan oil
refinery II in East Kalimantan.
Speaking to reporters after witnessing the signing of the oil
contracts, Minister of Mines and Energy I.B. Sudjana made it
clear that the government has no intention in the near future of
giving new incentives to oil contractors in the eastern part of
Indonesia.
He said that the government considers the current incentives
attractive enough to encourage foreign investors to explore for
oil in the eastern region.
Meanwhile, Antara reported yesterday from Medan, North
Sumatra, that Pertamina temporarily closed its asphalt plant in
Pangkalan Susu, Langkat district, which had been in operation
since 1966 with a daily capacity of 120 tons.
"We have to close the plant as it is no longer efficient and
is financially burdensome to Pertamina's Unit I in Medan," said
Warnaedy, the chief of Pertamina's district office in Pangkalan
Brandan. (13)