Pertamina demands re-negotiation over Cepu TAC
Saturday, April 28 2001 - 04:30 AM WIB
State oil and gas company Pertamina has wanted a re-negotiation over Cepu Block technical assistance contract (TAC) so that Pertamina's rights over the block could be restored, Suara Karya daily reported on Saturday.
Pertamina president Baihaki Hakim said that the Cepu Block TAC had deviated from the basic TAC rules established by Pertamina, and therefore, it needed re-negotiation before any amendment to the contract could be made.
The violation of TAC rules in the Cepu Block, Central Java, included the clause that allowed the transfer of ownership from locally-incorporated company (Humpuss) to foreign companies, ExxonMobil.
Worse still, Humpuss, the former owner of the block, had pledged Cepu Block TAC as collateral of Humpuss debts to the Indonesian Bank Restructuring Agency.
According to basic Pertamina's TAC rules, the concession areas should belong to Pertamina, the contractors bear all the cost, and the profit-sharing ratio should be at 65 for Pertamina and 35 for the contractors.
But all of sudden, when the Cepu Block TAC was signed, Humpuss - that is owned by former president Soeharto's youngest son Hutomo "Tommy" Mandala Putra - controlled 100 percent interests in Cepu block TAC.
Next, on March 21, the Cepu Block TAC was amended, by eliminating a clause that banned Humpuss from selling its interests in the block to foreign entity. Following the amendment, on July 12, 1997, the composition of shareholders at Cepu Block changed into 51 percent by Humpuss and 49 percent by Ampolex (Cepu) Pte Ltd.
And again Humpuss sold its interests to foreign company, ExxonMobil, and thus in April 1999, the composition of Cepu Block shareholders changed again, with 51 percent interests controlled by ExxonMobil and 49 percent by Ampolex. This last change composition of shareholders was then approved by Pertamina.
But now, Cepu Block TAC needs amendment again following the oil and gas find by ExxonMobil. And this time, Pertamina is reportedly offered with a 10 percent interest at the block. But Pertamina refuses it. Baihaki said Pertamina wanted a re-negotiation of the TAC to restore its rights over the block. (*)