FOCUS: Pertamina slams Migas over contract processing right
Saturday, July 7 2001 - 05:50 AM WIB
Pertamina?s president Baihaki Hakim, in a recent letter addressed to Minister of Energy and Mineral Resources Purnomo Yusgiantoro, pointed out the weaknesses of the new policy.
He even warned that the tender that had been held by the ministry could be considered ?legally flawed? because the existing Pertamina Law No. 8/1971 clearly indicates that it is Pertamina rather than the ministry that holds the right to process oil and gas contracts.
?The regulation and ruling on which the 2001 policy is based remain unclear and (the policy) is potentially legally flawed,? he said in the letter dated July 2, which was made available to Petromindo.Com Saturday.
The ministry?s directorate general of oil and gas, which is popularly known as ?Migas? among industry players, took over the contract processing right from Pertamina late last year, arguing that the right legally belonged to it, but Pertamina had taken over the right from it in the 1970s, when the state company was headed by late Ibnu Sutowo, who then had a strong political power due to his connection with President Soeharto.
Migas has exercised its right by holding a tender on March 1 this year to offer six blocks in hydrocarbon-rich Makassar Straits and two blocks offshore Java Island and one block offshore Natuna Island in the South China Sea.
The six Makassar Straits blocks are Popodi, Donggala, Papalang, Taritip, Jangeru and Tanjung Aru. The two Java offshore blocks are Bewean I, Bawean II and the Natuna offshore block is Nila.
The preliminary bidding results, which were made available to Petromindo, show that investors were only interested in six of the nine blocks, that is Popodi, Donggala, Papalang, Tanjung Aru, Bawean I and Bawean II and Nila.
Data at Migas say there were three investors who had asked for bid information about Popodi, that is Unocal Indonesia, Lasmo Oil, Zodan NV, but only Zodan finally submitted its bid.
Four investors ? that is Unocal Indonesia, TotalFinaElf, Lasmo Oil and Zodan NV ? asked for bid information on Donggala,. All of them, except for Lasmo, subsequently submitted their bids.
With regards Papalang, three investors ? Unocal Indonesia, Santos and Zudavi NV ? asked for bid information on the block, but only Zudavi submitted its bid.
Unocal Indonesia together with TotalFinaElf, Amerada Hess Indonesia and Tately NV asked Migas for information on Tanjung Aru, but only Amerada and Tately later submitted their bids.
Bawean I has attracted BP, Santos and YPF-Maxus. They asked for information about the block, but only BP and Santos later submitted their bids.
BP also asked for information about Bawean II, but it did not submit its bid.
Bids for Nila came from Conoco Energy Ventures Inc. and Gulf Indonesia Resources.
The expert staff for economic and financial affairs to the minister of energy and mineral resources, Kardaya Warnika, earlier said Migas was currently evaluating the bidding proposals submitted by the interested investors and the final results of the bidding evaluation would come in September this year.
Baihaki admitted that Pertamina?s representatives had been involved by the Migas team in formulating the criteria and model contract for the bidding.
But, he said, the regulation and inventive package on which the financial terms of the model contract was formulated remain ?unclear?.
For instance, he said, the model contract has yet to clearly define rules regarding the purchase data from PT Patra Nusa Data and the payment by the contractors for information bonus.
The 80 percent investment credit facility stipulated in the model contract is also unclear, Baihaki said, but he did not specify the unclearness.
Under the former practice, Pertamina received, on the signing of the contract, the so-called ?information bonus?, which could be in the excess of one million dollars, from contractors for information and data it provided to them. The state company also received another hundreds of thousand dollars in the so-called ?education fund? and ?good and service fee?.
Baihaki, in the letter, asked for clearer explanations about who shall sign the contracts.
He said Pertamina had been thus far informed that the ministry would ask for the presidential approval after Pertamina signed the draft contracts and after being approved by the President, the contracts would be signed by Pertamina, contractors and the minister of energy and mineral resources.
Baihaki said the ministry should have issued a regulation to support the new contract processing policy to avoid all the unclear things.
?Therefore, we propose Migas soon issue the regulation as well as rulings concerning the implementation of the regulation to become the legal basis for the government?s 2001 (contract processing) policy,? Baihaki said.
No senior officials of the ministry were available to comment on the letter on Saturday. (Godang)