Pertamina seeks permit to open international tender to procure oil tankers

State oil and gas company Pertamina is seeking the government's approval to open an international tender in the procurement of more oil tankers to transport its crude oil and fuel both for domestic and international shipment, Suara Karya reported on Monday.

Speaking to reporters after a hearing with the House of Representatives (DPR), last week, Pertamina's president Baihaki Hakim said that buying more oil tankers was needed to support its oil shipment, which is now mostly handled by shipping companies from Singapore and Hong Kong.

He said that at present Pertamina lacked bargaining power in the negotiations of the tanker tariffs not only due the fact that the company did not have enough tanker fleets but also because the oil shipment in the region is controlled by a handful of shipping companies.

"Procuring more tankers through an international tender is the only alternative that Pertamina can do to break the network of the oil tanker syndicate in the region," Baihaki said.

According to the existing regulation, Pertamina should procure oil tankers through local agents, which according to Baihaki, is no longer suitable in the current situation. The procurement of oil tankers through local agents could instead inflate costs, he added. (*)