Pertamina won?t annul tender result for works at Unocal?s West Seno oil field

The state-owned oil and gas company Pertamina will not annul the recent decision of its oil and gas production sharing contractor Unocal Indonesia to appoint Petrosea as the winning bidder for fabrication works at the West Seno oil fields, Pertamina director for production sharing contract Effendi Situmorang said.

Effendi said that Pertamina could risk being sued at the international arbitration panel if it annul the tender result.

He added that such a move would further damage international investors confidence in the country economy.

He said that annulling the decision might cost the country or Pertamina a greater loss.

But he said that Pertamina would have to annul the decision if the House of Representatives insisted.

?We accept the tender result, except if the House wants the decision to be annulled,? he was quoted by the evening Suara Pembaruan daily.

House deputy speaker A.M. Fatwa had sent a letter to Pertamina president Baihaki Hakim questioning the recent tendering of fabrication works for the West Seno oil field operated by Unocal in the Makasar Straits.

Fatwa suspected graft in the previous tendering. According to Fatwa, Pertamina awarded the A package of works for West Seno Field production facilities and pipelines project to a consortium of PT Petrosea Tbk., Hyundai and Clough at a price of US$375 million -- the lowest among the prices offered by other consortiums.

However, if the tender was drawn further to earlier processing, in fact, there was a much lower offer from a consortium of Petrosea and Jurong, that bid the project at only $345.8 million. However, this consortium was dropped in the earlier tender processing for administrative reasons.(*)