House questions tendering of fabrication works for Unocal's West Seno oil field

House of Representatives deputy speaker A.M. Fatwa has sent a letter to Pertamina president Baihaki Hakim, questioning the recent tendering of fabrication works for the West Seno oil field operated by Unocal Indonesia in Makasar Straits, that will potentially inflict losses of US$30 million to the state, Republika daily reported on Monday.

In his letter, with copies sent to caretaker minister of energy and mineral resources Purnomo Yusgiantoro, House leaders and leaders of the House's Commission VIII on mining and energy, Fatwa urged Pertamina to review the tender and if possible to re-tender the project.

When contacted, Fatwa confirmed that he had sent the letter, and said that he made the letter, following a request from Commission VIII leaders.

Fatwa said the suspected graft was reported by one of tender participants who lost in the tender. According to Fatwa, Pertamina awarded the A package of works for West Seno Field production facilities and pipelines project to a consortium of PT Petrosea Tbk., Hyundai and Clough at a price of US$375 million -- the lowest among the prices offered by other consortiums.

However, if the tender was drawn further to earlier processing, in fact, there was a much lower offer from a consortium of Petrosea and Jurong, that bid the project at only $345.8 million. However, this consortium was dropped in the earlier tender processing for administrative reasons.

According to Husnie Thamrin, a legislator at Commission VIII, Pertamina was not fair in dropping the Petrosea-Jurong consortium because Pertamina's tendering committee did not drop Unocal-led consortium although it also had administrative flaws.

When contacted, the spokesman for Pertamina's production sharing management division, Siddick Nitikusumah, said he could not yet give a comment on the letter yet. "We will discuss it first."

Meanwhile, a source said that it would be difficult for Pertamina to annul the tendering and re-tender the project because it was an international tender. In addition, the tender winner had been announced, and legally sealed by Pertamina. (*)