June 14, 2004

Legislators could kill Pertamina tanker deal

Plans by Indonesian state oil company Pertamina to sell two newbuild VLCC's could hit a legislative hurdle.

A story in today's Jakarta Post quotes Irwan Prayitno, a member of the Indonesian House of Representatives Commission VIII for energy and mining, said that based on information gathered during a recent visit to Hong Kong and South Korea, he and other commission members had concluded that it was best for Pertamina to keep the two ships.

"We disagree with the plan to sell the tankers because owning them is profitable not only for Pertamina but also for the country," Irwan of the Justice Party told The Jakarta Post.

Djusril Djusan, another commission member who took part in the controversial visit to Hong Kong and South Korea, reportedly said: "Under the existing law, the sale of state assets must be approved by the House of Representatives. The commission is against the sale."

The Jakarta Post notes that the two tankers were ordered by Pertamina's previous management under president director Baihaki Hakim for a total of US$130 million in 2002. The newspaper reports that the current management under president director Ariffi Nawawi has said it wants to sell the tankers, citing cash flow problems while arguing that it is cheaper to transport fuel and crude using leased tankers.

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