Off take contract with Chevron causes losses of $1.3m per annum to Pertamina
Wednesday, October 24 2001 - 04:14 AM WIB
Koran Tempo daily quoted Baihaki as saying that Pertamina wanted to re-negotiate the contract so that the fee it had to pay to Chevron could be reduced.
Based on the contract, Pertamina is required to pay a total of $75 per ton of those two products it sold to the buyers.
"Early November, there will be a re-discussion about the off-take contract with Chevron," Baihaki said after attending the House of Representatives' plenary session, passing the oil and gas bill into law.
The off-take contract was signed by Pertamina and Chevron early 2000, and would be valid until the end of 2003.
According to legislator Priyo Budi Santoso from the House's Commission VIII on energy and mining, smelled fishy from the off-take contract, saying that it would inflict losses of $1.3 million per annum to Pertamina.
"I suspect there is conspiracy with the contract because it was signed before the contract with the investors expired," Priyo said.
Initially, Pertamina had off-take contract with the investors of the Cilacap refinery plant, that provided loan totaling $449 million for the construction of the plant. They are Mitsui, Fuji Bank, Bank of Tokyo and Bank of Japan.
The off-take contract with the investors was basically to repay the loans using the products produced by the Cilacap plant. The loan, nevertheless, had been repaid as of Sept. 30, 2001.
However, long before the contract with the Japanese investors expired, Pertamina's general affairs director Hadi Daryono signed another off-take contract with Chevron.
Baihaki said Pertamina would not anymore contract a third party to sell paraxylene and benzene from Cilacap plant after the off-take contract with Chevron expires in 2003.
"Pertamina is capable to sell the two products," Baihaki said.
Cilacap plant produces around 270,000 tons of paraxylene per annum worth $116 million and 120,000 tons of benzene worth $50 million. (*)