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)