Petrokimia Gresik seeks to recoup US$33.5 million gas payment surplus

State-owned petrochemical products maker PT Petrokimia Gresik is seeking to recoup US$33.52 million in excess payment for gas supplies from gas fields owned by Atlantic Richfield Bali North Indonesia (ARBNI).

Company president Rauf Purnama said last Friday that under the gas deal signed by the company and state oil and gas company Pertamina on April 5, 1991, the petrochemical firm had to pay Pertamina US$2 per million British thermal unit (MMBTU) for gas supplies from the ARBNI fields offshore Madura Island.

Petrokimia makes the payment at Bank of America NA in New York, which serves as paying agent, according to Suara Pembaruan evening daily.

ARBNI is the subsidiary of American firm Atlantic Richfield Company (ARCO), which has merged with BP Amoco. The merger is now named Beyond Petroleum (BP).

Under the production sharing contract (PSC) system, the government takes 70 percent of the gas output of contractors.

Rauf said the government later issued a decree to cut gas price for Petrokimia Gresik at $1 per MMBTU.

Petrokimia continues paying $2 per MMBTU for the gas supplies, but Pertamina refunded $1 per MMBTU to the company from 1994 to March 1997. The refunding was then taken over the directorate general of financial institutions at the ministry of finance.

But, Rauf said, the directorate general had stopped refunding the excess payment in November 1998.

Thus, the government owed Petrokimia a total of $33.52 million in excess payment from November 1998 to September 2000, he said.

Rauf warned Petrokimia could face difficulties in its operation if the government kept withholding the excess payment. (*)