Pertamina to rework Humpuss tanker deal

Pertamina to rework Humpuss tanker deal

JAKARTA (JP): State oil and gas company Pertamina will
renegotiate tanker fees with Pacific LNG Transport Ltd, an
affiliate of Soeharto family-owned PT Humpuss, for the shipment
of liquefied natural gas (LNG) from Bontang, East Kalimantan, to
foreign markets.

Pertamina president Soegianto said on Tuesday the fee charged
by Pacific's Dwiputra tanker was much higher than that of other
operations to the same destinations.

Markup practices caused a total loss of US$6 million for
Pertamina and its production-sharing contractors, including Vico
Indonesia, Unocal Indonesia, and Total Indonesie, Soegianto said
at a hearing between Minister of Mines and Energy Kuntoro
Mangkusubroto and the House of Representatives's Commission V for
mines and energy, trade and industry, manpower, cooperatives,
environment and investment.

Vico, a subsidiary of the U.S. energy company Virginia Co,
Unocal, a subsidiary of the U.S. Unocal Corp, and Total, a
subsidiary of Total of France, are suppliers of natural gas to
the Badak LNG plant and co-owners of the plant.

Seogianto said Pertamina and Pacific had agreed to renegotiate
the fee on Friday.

"We shall ask the company to reimburse the total loss it has
imposed on us over the past 10 years," Soegianto said.

Aside from the Dwiputra tanker, Humpuss, which is controlled
by former President Soeharto's sons Hutomo "Tommy" Mandala Putra
and Sigit Hardjojudanto, and its affiliates operate two other
tankers, including the Eka Putra and Surya Aki tankers, to ship
LNG from Indonesia.

Eka Putra, the world's largest LNG tanker, is owned by
publicly listed transportation company PT Humpuss Intermoda
Transportasi, an affiliate of PT Humpuss. Surya Aki is owned by
MCGC International.

Another son of Soeharto, Bambang Trihatmodjo, is also active
in shipping the country's LNG to export markets through PT
Samudra Petrindo, an affiliate of the Bimantara Group.

Soegianto said Pertamina had investigated the operations of
all the LNG tankers and found their prices were competitive with
the exception of Dwiputra.

Soegianto also said Pertamina had completed its review of all
contracts awarded to Soeharto's family and cronies. He said
results would be submitted to Kuntoro by the end of the month.

He earlier said Pertamina had awarded between 120 and 140
contracts to Soeharto's family and cronies during his 32-year
presidency. Soeharto's family dominates the shipping of LNG,
crude oil and fuel, gas pipeline network development, geothermal
power and the development of refineries and many other aspects of
the hydrocarbon sector.

Soegianto said the contracts could be retendered, terminated
or renegotiated.

"Pertamina will only give some suggestions, but the government
will make the decision."

Soegianto said Pertamina had improved its efficiency by
severing several brokerage contracts with Soeharto's family and
cronies.

He cited as an example how the company would save about $29.45
million this fiscal year by directly importing and exporting
crude oil and fuel.

These were monopolized for decades by Penta Oil Marketing Ltd,
controlled by Tommy, Soeharto-led foundations and Soeharto's
crony Mohamad "Bob" Hasan; and Permindo Trading Oil Co. Ltd,
which is controlled by Bambang and his associates including
Rossano Barack and Nirwan Bakrie.

Pertamina started to export and import fuel and crude oil in
July.

Pertamina has also terminated contracts with PT Catalyst
Indopratama, owned by Tommy, to procure catalysts and chemicals
for the production of fuel oil in the Balongan refinery in West
Java. The company reportedly made huge markups in the price of
the catalyst, causing massive losses to Pertamina for years.
(jsk)