Pertamina urged to cancel "coke cooperation" with Conoco
Friday, February 23 2001 - 04:00 AM WIB
Husni Thamrin, a member of the Commission VIII of the House of Representatives has called on state oil and gas Pertamina to cancel its plan to cooperate with Conoco in rebuilding its calcine coke plant in Dumai, Riau, Neraca daily reported on Friday.
Speaking at a hearing with Pertamina's board of executives on Thursday, Thamrin said that the appointment of Conoco in the project was not transparent because it was made not through an open bidding.
With the direct appointment, the state oil and gas company had closed the chances of other companies to compete in the projects.
The calcine coke plant was built by Pertamina in early 80s and it could no longer operate since it broke down 1997. Sources said that Pertamina has no choices but to invite other companies in the reconstruction and reoperation of the plant because it has not enough funds to finance the project.
During its operation several years ago, the plant had become the cost center of the state oil company although its products were very competitive in the international market.
Thamrin said that in those years, Pertamina was forced to sell the calcine coke products to Permindo, a company owned by former President Soeharto's son Hutmomo Mandala Putera (Tommy) below its production costs.
At the hearing, Thamrin said that Pertamina should not repeat the past mistake.
Arifin Nawawi, the director of Pertamina's downstream operation, however, told the hearing that Pertamina had not made any decision related to the involvement of Conoco in the calcine coke project.
He said that a number of major companies had conducted a due diligence on the calcine coke plant but none of them, except Conoco, had expressed their interest to join in the reconstruction project.
"But Pertamina has not made any decision on which companies which will be appointed," he said, adding that among the companies, which have carried due diligence surveys, included Japan's Mitsubishi. But the Japanese company later withdrew because its technology is different to that used in the plant.
According to Arifin, the prospect of the calcine coke in the international market is very promising. At present, the market price of the product is between US$110 to $120 per ton as compared to their production cost of between $80 to $90 per ton. (*)