Pertamina accused of incurring state loss in crude sale

The government has suffered losses of at least US$6.2 million due to the sale of 621,916 barrels of Jatibarang crude oil to the U.S. by state oil and gas company PT Pertamina at a much lower, Bisnis Indonesia reported Friday.

A member of the House of Representatives? Commission VII, Ade Daud Nasution, said Pertamina had sold crude oil less than $10 per barrel from the Indonesia Crude Price (ICP) formula.

?If the transaction was really made, it violated the law because Indonesia must not sell its crude oil at a price lower than the ICP formula, which is $63 per barrel as set by the 2006 State budget,? Ade said at the Commission?s hearing with Pertamina on Wednesday night in Jakarta.

According to the documents, the Pacific Petroleum and Trading Co. Ltd. sent a letter by fax to Pertamina?s director of trade and marketing Ahmad Faisal with a copy to president director stating that the only way to sell Jatibarang crude oil to U.S. was at a price of $10 per barrel below the ICP formula.

Pacific Petroleum and Trading Co. Ltd., a subsidiary of Pertamina, is based in Japan.

In his letter, Pacific Petroleum?s president director Roland P. Gultom stated that the company had entered into negotiations with several buyers from Japan, South Korea and China. But it didn?t find any buyer who was willing to buy the crude oil at a price set by the company.

But Ade?s version was different. According to him there were two companies ? ONGC-Mittal Energy Services Ltd consortium (OMESL) and China Oil USA (Macao) Co. Ltd. ? which offered the buying price higher than the ICP formula.

Before the end of the hearing, Ari confirmed that the documents were genuine but they were not the transaction documents. They were just the documents that contain the offering prices.

?At first, the company offered minus ICP price. But it was not sale contract. Bill of lading was also a genuine document. At the end the price was in line with the ICP,? Ari said (*)