Pertamina takes Nusamba's 35% stake in TPI

JAKARTA (JP): State oil and gas company Pertamina has acquired PT Nusantara Ampera Bhakti's (Nusamba) 35 percent stake in insurance company PT Tugu Pratama Indonesia (TPI).

The deal, which increases Pertamina's ownership in the insurance company to 80 percent, was approved during the state oil company's shareholders meeting on Friday, Pertamina spokesman Ramli Djaafar said in a statement.

He did not disclose the value of the transaction but said Pertamina's pension fund holds the remaining 20 percent share.

Ramli added the meeting also accepted the retirement of the insurance company's president, Sonni Dwi Harsono, and commissioner Mohamad "Bob" Hasan.

Pertamina will appoint its employees to Tugu's new board of directors and commissioners, he said.

Nusamba is 80 percent owned by the Dakab, Dharmais and Supersemar foundations linked to former president Soeharto. Hasan, a golfing partner of Soeharto, has a 10-percent stake in the business group and the remaining 10 percent is held by Soeharto's eldest son Sigit Hardjodjudanto.

Assets of the three Soeharto foundations were recently taken over by the government.

Founded in 1981, Tugu has become the country's largest insurance company, mainly due to its monopoly of indemnity insurance in the oil and gas sector for more than a decade.

Hasan controlled the insurance company during Soeharto's era despite his position as a minority shareholder.

Under Hasan's control, the company reportedly charged Pertamina marked-up premium rates.

Ramli said Tugu, under pressure from Pertamina, was ready to reduce the premium rate by 41.3 percent for the operation of foreign oil and gas contractors, by 66.4 percent for Pertamina's aviation company Pelita and by 30 percent for Pertamina's own operation.

"Pertamina is still negotiating for a lower premium rate with excellent claim service," Ramli said.

Pertamina's newly appointed president Martiono Hadianto was recently under fire for extending contracts with Tugu for the operation of foreign oil and gas contractors despite his predecessor Soegianto's promise to put the contracts up for bidding.

Martiono defended his move by arguing that foreign insurance companies would most likely edge out their local counterparts, which lack expertise in oil and gas indemnity insurance, in open bidding.

Legislators ultimately accepted Martiono's move on the condition Pertamina acquired Nusamba's shares, replaced the company president and allowed other local insurance companies to obtain contracts from the country's oil and gas industry. (jsk)