Tugu Pratama retains insurance monopoly in oil and gas

State oil and gas company Pertamina will continue to maintain the exclusive rights of PT Tugu Pratama Indonesia (TPI) to provide insurance services to its gas and oil production sharing contractors, Kompas daily reported on Friday.

Pertamina president Baihaki Hakim said in Jakarta on Wednesday that Tugu Pratama, which is 45 percent owned by Pertamina, 20 percent by Pertamina's Employees Pension Fund and 35 percent by Bob Hasan, would continue to hold the monopoly in the oil and gas sector. But other insurance companies will be still allowed to enter the oil and gas industry as long as they are able to compete with Tugu, he added.

He said at present the insurance market in the oil and gas sector is controlled by Tugu Pratama as others only hold around 20 percent. "In the future we want insurance companies outside Tugu Pratama will control at least 50 percent of the insurance market in the oil and gas sector," he added.

"We have cut the premium rate by about 50 percent so that oil and gas production sharing contractors will no longer complain about the high premium rates offered by Tugu Pratama," he said.

He, however, did not mention anything about the possibility of taking over Bob Hasan's 35 percent in the insurance company.

Pertamina's finance director said earlier that Pertamina would acquire Bob Hasan's 35 percent stake in Tugu Pratama in a bid to root out traces of corruption and nepotism made by former president Soeharto's cronies. (*)