Pertamina cuts ties with UK-based insurance brokers

Pertamina has totally cut all business relations with the United Kingdom-based reinsurance brokers Tugu Reinsurance Broker and Energex as part of the state oil and gas company's efforts to root out corruption practices, Bisnis Indonesia reported on Monday.

Pertamina's president Baihaki Hakim said in Jakarta Saturday that cooperation with the two London-based companies, which were owned by former president Soeharto's close friend Muhammad "Bob" Hasan were no longer needed.

"We don't use them any more," Baihaki told reporters following the transfer of duty ceremony between Bambang Susilo Yudhoyono and newly appointed Minister of Energy and Mineral Sources Purnomo Yusgiantoro.

Baihaki added that with the cut in the business relations with the two companies, all Pertamina's insurance partners would be appointed through an open bidding process. "We will open a tender in selecting our reinsurance partners," he added.

Meanwhile Pertamina's finance director Ainun Naim said that the cut in the business relations with TRB and Energex also affected Tugu Insurance Singapore, a subsidiary of TRB in the neighboring country. He added that selecting insurance partners through an open tender was expected to be able to cut Pertamina's insurance premium payment, which reached a total of US$150 million a year.

Pertamina has also taken over the ownership Bob Hasan in PT Tugu Pratama Indonesia and is currently restructuring the insurance company's management. (*)