BP West Java operates as usual

The Jakarta Post, Jakarta

Energy firm BP West Java said production activities were running normally despite its recent loss in a controversial court case bought by a chemical supplier.

Pradakso Hadiwidjojo, BP Indonesia senior manager of communications and internal affairs, said the court ruling did not hamper the company's work producing natural gas.

BP West Java, a subsidiary of energy firm BP Indonesia, operates offshore natural gas rigs in north East Java. It supplies natural gas for West Java, primarily to state power firm PT PLN's plant.

The South Jakarta District Court on Thursday ruled in favor of chemical supplier PT Mestaco Swarnadwipa, who filed a lawsuit against BP West Java after the company ended its business relations with Mestaco. Mestaco had supplied a chemical to BP which was found to be contaminated.

The court ordered BP West Java to pay US$2.37 million or 3 percent of the total compensation of $70 million demanded by Mestaco.

The court also froze BP West Java accounts in Citibank Jakarta.

"Our activities continue although the court has frozen the account," Pradakso told The Jakarta Post.

He would not give details on the sum of money in the account.

The case began in mid-2001 when BP West Java stopped buying the chemical Halon 1301 from Mestaco after it found a liquid contaminating the supply during an inspection. Halon 1301 is a chemical used to extinguish fires.

Test results showed the substance was Dicloromethane, a flammable chemical not used to extinguish fires.

Mestaco filed the first lawsuit in November 2001 and demanded $650 million in compensation, saying BP West Java had not followed correct procedures ending its business relationship. However, the court rejected Mestaco's claim.

This was the second lawsuit filed by Mestaco.