JAKARTA. Vice President Corporate Communication of Pertamina Wianda Pusponegoro said that Pertamina (State-Owned Energy Company) decided to abort the purchase of 3.5 million barrels of crude oil from Glencore, after the company delivered 1.2 million barrels of incorrect crude oil type during the first phase of delivery.
In addition to contract abortion, Pertamina is considering to black list Glencore Plc for participating in Pertamina’s all bidding processes related to crude oil import.
In July 2016, Glencore won a bid for delivering 3.5 million barrels of crude oil to Indonesia. During the first phase of delivery in September 2016, Glencore transported 1.2 million barrels of crude oil from Libya. Later, Pertamina found incorrect item in the delivered crude oil.
Previously, Pertamina ordered crude oil from Glencore with the composition of sarir (super heavy) and mesla (light) amounted to 70% and 30%, respectively. However, the delivered items on contrary consist of 30% sarir and 70% mesla.
“We will not accept any item that fails to meet our specification”, said Wianda on Thursday (29/9).
After aborting contract with Glencore, Pertamina will rebid the contract for supplying crude oil to Indonesia. The rebid process is likely to take weeks of times to accomplish.
Learning from the experience, Pertamina will conduct verification to any vendor, which won the bidding process.
In order to cover the lack of crude oil supply after the contract abortion, Wianda said that Pertamina will secure the supplies from Dumai and Minas.
Energy observer from Gadjah Mada University Fahmi Radhi said that Pertamina has made right decision. Alternative option, Glencore is not allowed to join Pertamina’s bidding process for three or four times until the company shows strong commitment to improve its performance.
Fahmi also aprreciated Pertamina’s decision to return the incorrect item to Glencore. “It shows strong commitment”, Fahmi said.
(Muhammad Farid/Translator)
