Pertamina secures loan of US$500 from local banks

State-owned oil and gas company Pertamina said it has agreed to secure a loan amounting to US$500 million from a local bank consortium, including Bank Mandiri and BNI, to finance eight oil and gas projects that will commence in 2007.

Pertamina?s chief commissioner Endriartono Sutarto said that the planned loan raising was agreed when the company held a general shareholders meeting (RUPS) on December 12, 2006.

?They (the bank consortium) offered US$1.4 billion but we decided to only secure US$500 million. All of the lenders are local banks,? he said.

Pertamina?s director for finance Frederick T. Siahaan said that part of the loan would be used to finance the Cepu Block development project that will cost US$50 million, the construction of the Kamojang geothermal power plant Unit 4 that will cost US$80 million and for the development of Pondok Tengah field, Bekasi, West Java.

The company will also use part of the loan to purchase eight tankers with a loading capacity of 70,000 dwt, revamping several oil refineries, including the one in Balongan in West Java and another one in Cilacap, Central Java and in East Kalimantan and also to build primary transit terminal in Tuban, East Java.

Frederick said that the projects, which are all priority ones, will commence next year.

Pertamina?s president director Ari H Soemarno once said that several foreign banks, including BNP Paribas and Citigroup, had also offered loans amounting to around US$1.3 billion when the company conducted a road show in Hong Kong and Singapore. However, in a general shareholders meeting, the commissioner board asked the management to take advantage of loans from local banks. (godang)