Govt does not guarantee Pertamina?s obligation in Tuban project
Wednesday, June 18 2003 - 03:24 AM WIB
The government?s statement is contained in the Government of Indonesia (GOI) Letter sent to a consortium of Japanese companies which would provide loan worth about US$400 million needed for the resumption of the petrochemical project which was halted in 1999 due to financial problem.
The Tuban petrochemical project which is directly operated by Tirtamas Group?s subsidiary PT Trans-Pacific Petrochemical Indotama has been transferred to the Indonesian Bank Restructuring Agency (BPPN) as part of the business group?s collateral for the repayment of its debts worth Rp 5.4 trillion to the government.
The petrochemical project and the business group?s three other assets are now under the supervision of a joint venture established by the business group and IBRA. The petrochemical project has been 60 percent completed.
As part of the restructuring plan, 15 percent of the ownership of the Tuban petrochemical company is transferred to Pertamina in return for its agreement to guarantee the US$400 million loan to be provided by the Japanese consortium. The guarantee is made in the form of Pertamina?s commitment to sell low sulphur wax residue.
However, the disbursement of the loan has been stalled because the consortium fears that Pertamina will not fulfill its commitment. The consortium then asks the Indonesian government to issue a statement that it is the sole ownership of Pertamina.
In the letter, the government also states that it will ensure that Pertamina will be able to fulfill its commitment and will maintain the operation of the state owned oil and gas company in accordance with the new oil and gas law.
Many Pertamina?s partners have expressed concerns that the government will divide Pertamina into several companies to adjust to the new law which has removed the state owned oil and gas company?s monopoly in the country?s oil and gas sector. (*)