Pertamina to ax insurance ties with Tugu Pratama
Pertamina to ax insurance ties with Tugu Pratama
JAKARTA (JP): State oil and gas company Pertamina will not
renew its insurance contracts with its affiliated insurance
company PT Tugu Pratama Indonesia as part of its commitment to
rid its business of corruption, collusion and nepotism.
Pertamina's president Soegianto said all the maturing
insurance deals with Tugu Pertama, which at present underwrites
all Pertamina's insurance contracts, would not be extended.
Tugu Pratama, established in 1981, is 35 percent owned by PT
Nusantara Ampera Bhakti (Nusamba), which is headed by former
president Soeharto's close associate Mohamad "Bob" Hasan.
Pertamina owns 45 percent of the company, with the remaining 20
percent held by Pertamina's pension fund.
"Actually, in our opinion, Tugu Pratama charges us a
competitive premium. But, we have decided not to extend the
contract with the company because Nusamba has stakes there,"
Soegianto said.
He said the indemnity insurance contract with Tugu Pratama is
valid for one year, but the contract was routinely extended in
the past.
The tender for the indemnity insurance will be held as soon as
the current contracts expire, Soegianto said, but he did not
reveal a schedule.
The contracts would be then offered to local insurance
companies under an open tender, he said.
Seventy percent of Tugu Pratama's insurance ventures involve
the country's oil and gas industry. It also insures other
industries like aviation and marine transportation.
The company insures Pertamina against loss during exploration,
exploitation, storage and transportation.
One of the country's leading insurance firms and one of the
most profitable subsidiaries of Pertamina, it booked a net profit
of Rp 137 billion (US$13.7 million) last year, almost three times
as much as its 1996 profit of Rp 50 billion.
It has been expanding services to other industrial sectors and
overseas oil and gas industries, to lessen its dependency on the
country's oil and gas industries.
Soegianto did not mention if Tugu Pratama would be allowed to
participate in the future tender or reveal if it would end its
joint venture with Nusamba.
Pertamina has scrapped monopoly rights of PT Permindo and PT
Perta, which are owned by Pertamina and Soeharto's children and
cronies, on fuel and crude oil imports. (jsk)