Pertamina agrees to dissolve Elnusa Petro Teknik

The state owned oil and gas company Pertamina has agreed to freeze the operation of its subsidiary PT Elnusa Petro Teknik that handles the company's projects in Dumai, Riau following protests from the local contractors, Riau Pos reported on Thursday.

The agreement was made in a meeting with members of the province's legislative council on Wednesday. The company said that the measure to freeze Elnusa Petro Teknik's activities would begin effective starting January, next year.

The legislators asked the company to pay all the third party's claims as soon as possible and all the claim payment should be settled before the closing of its operation takes affect.

Elnusa Petro was established last year to handle all the contracts at Pertamina's Riau operation unit. The company's operation has, however, drew a wide criticism from local contractors because all the contracts worth above Rp 50 million are given to the new company.

The company then subcontracted the available projects to other companies through a direct appointment, threatening the operations of the local contractors, which mostly still rely on Pertamina's jobs to survive.

The local legislators asked Pertamina to voluntarily close Elnusa Petro operation or being forced to do so if it refused to meet the demand. (*)