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)