DPR supports Pertamina?s negotiation with ChevronTexaco over sales contract

The House of Representatives (DPR) on Tuesday expressed support to state oil and gas firm Pertamina?s efforts to renegotiate with ChevronTexaco over the fee it has to pay to the American company which solely handles the sale of paraxylene and benzene turned out by Pertamina?s BTX plant in Cilacap, Central Java.

Pertamina should try that the amount paid to ChevronTexaco for the marketing of its paraxylene and benzene be reduced to below the current level, DPR?s commission VIII in charge of energy and mineral resources said in a statement at the end of its hearing with Pertamina president director Baihaki Hakim and other top leaders of the company. Commission chairman Irwan Prayitno read out the statement.

Pertamina were in talks with ChevronTexaco on the possibility of changing their ?off-take? agreement which provides the latter to solely handle the sales of Pertamina?s paraxylene-benzene from its Cilacap project. The sale reaches between US$100 million and $200 million per year.

The take-off contract, signed in early 2000, will expire at the end of 2003.

BTX plant has the capacity to turn out 275,000 tons of paraxylene and 125,000 tons of benzene annually.

The plant was built in 1989 with a total investment of $400 million. The project financing was provided by a consortium of Japanese companies including Mitsui Bank, Fuji bank, Bank of Tokyo and Bank of Japan. Chevron is responsible for the marketing of the products from the plant, while Pertamina only provided raw materials and supporting facilities such as land. (godang)