PSCs allowed to decide on US$5 million contracts
Tuesday, November 28 2000 - 03:30 AM WIB
State oil and gas company Pertamina has allowed its production sharing contractors (PSC) to decide on service and supply contracts worth up to US$5 million or Rp 50 billion (US$1=Rp 9,415) as part of its continuing efforts to ease its controls of the country's oil and gas industry.
The joint operating body (JOB) and technical assistance contractors (TAC) have been allowed to decide on contracts worth up to $1.5 million and Rp 15 billion.
Acting spokesman of Pertamina's foreign contractors management body (BPPKA) Haryanto said the new policy was first introduced by former Pertamina's president Martiono Hadianto in 1999 and was later improved by current president of the state company Baihaki Hakim.
Haryanto denied that BPPKA, which is assigned to supervise foreign contractors and approve their expenditure, is still strictly controlling the contractors.
"Thus, the allegation that the contractors have to obtain clearance from the body to buy a pencil is untrue," Haryanto said.
Haryanto was commenting on the statement made by chief executive officer (CEO) of local oil and gas company Medco that BPPKA was still strictly controlling the contractors that they often face difficulties in doing their activities.
"The prevailing bureaucratic culture of BPPKA is discouraging. If the plan to buy a pencil is handled in a bureaucratic manner, that is not businesslike," said Hilmi who is the younger brother of Medco's founder Arifin Panigoro.
Haryanto said BPPKA was committed to steadily improve its management system and ease controls of the industry.
Under the oil and gas bill proposed by the government, BPPKA will be liquidated and replaced by an independent body accountable to the President. (Amoros)