JP/12/Karaha

JP/12/Karaha

Pertamina
appeals
ruling in
Karaha case

Moch. N. Kurniawan
The Jakarta Post
Jakarta

State-owned oil and gas firm Pertamina said on Friday it had
filed an appeal with the Central Jakarta District Court against
an arbitration ruling ordering Pertamina to pay US$261 million to
independent power producer Karaha Bodas Co. LLC in compensation
for the suspension of a power project in 1998.

Pertamina's finance director, Ainun Naim, said the appeal was
filed in response to legal actions by Karaha, which won
confirmation from the U.S. Federal Court in Houston, Texas, and
began seizing Pertamina assets around the world to satisfy the
ruling.

"We filed the appeal today (Friday). The international
arbitration ruling should be based on Indonesian law as the case
occurred here," he told The Jakarta Post.

Karaha entered into contracts with Pertamina and state
electricity company PT PLN in 1994 to develop a geothermal power
plant in Karaha Bodas, West Java.

It had invested $100 million developing the project when the
government suspended it, along with other independent power plant
projects, in late 1997 to help ease PLN's financial burden during
the economic crisis.

The moved prompted Karaha to file a suit against Pertamina,
PLN and the government with the International Arbitration Board
in Switzerland in 1998.

In December 2000, the arbitration board issued a ruling
ordering both Pertamina and state electricity company PLN to pay
$261 million to Karaha, plus 4 percent interest per year,
beginning from January 2001.

In December last year, Karaha won a confirmation from the U.S.
Federal Court in Houston approving the execution of the
arbitration board's ruling.

The company began a campaign to seize Pertamina's assets
around the world, including in Texas, New York, Delaware and
Canada, following Pertamina's refusal to pay the compensation.

2. Duit ( 2 x 21)
;DJ;
ANPAf..r..
Asian-Currencies-Mixed-Lat
Asian Currencies Mixed Late; HKD Dlr Wet Blanket On Mkt
JP/

Asian monies mixed late
HK dollar wet blanket

Netty Ismail
Dow Jones
Singapore

Asian currencies were mixed late Friday, after largely
relinquishing their earlier gains as renewed jitters over the
Hong Kong dollar's fate overwhelmed the support from a strong
Japanese yen and growing optimism of a U.S.-led economic
recovery, dealers said.

Federal Reserve Chairman Alan Greenspan's markedly more upbeat
assessment of the U.S. economy Thursday, compared with his
comments made just last week, failed to sustain the recent upward
momentum in Asian currencies.

"You would expect good sentiment on global reflation because
of Greenspan's speech last night and the strength of the yen to
help Asian currencies," said Mansoor Mohi-uddin, a regional
currency strategist at UBS Warburg.

Instead, anxieties about the Hong Kong dollar peg and the
unwinding of short yen positions against Asian currencies tossed
a wet blanket on the market, he added.

The risk premium on holding one-year Hong Kong dollar forward
shot up to 225-270 to the spot rate, compared with 160-170 late
Thursday.

Dealers blamed the rise in Hong Kong dollar forward premiums
to a report issued recently by U.S.-based consultancy Medley
Global Advisors, questioning the future of the Hong Kong dollar's
peg to the U.S. currency.

Late Friday, the Singapore dollar was slightly weaker at
S$1.8213, compared with S$1.8208 late Thursday.

After posting its biggest single-day gain against the dollar
in three-and-a-half years Thursday, the dollar was quoted at
127.72 yen at 0920 GMT (4.20 p.m. Jakarta time) Friday, above
126.99 yen in New York but well below 129.91 yen in Tokyo late
Thursday.

The South Korean won ended barely changed against the U.S.
dollar, but weaker against its Japanese counterpart - which
continued to outperform the rest of the region's currencies.

Late dollar purchases by offshore participants and importers
in South Korea pared the won's earlier gains, dealers said.

The dollar ended at 1,314.3 won, steady compared with 1,314.5
won Thursday. The dollar hit an intraday low of 1,306.5
won Friday.

The yen was quoted around 10.29 won, higher than 10.17 won
late Thursday.

The U.S. dollar closed at NT$34.947, down from NT$34.989
Thursday. The U.S. dollar hit an intraday low of NT34.886.
Dealings were valued at US$634 million.

The Thai currency was marginally stronger at 43.250 baht to
the dollar, compared with 43.275 baht late Thursday, but was off
its new one-year high of 43.110 baht reached early Friday.

On the Philippine Dealing System, the dollar ended at 50.97
pesos, relatively steady compared with 50.99 pesos Thursday. The
dollar opened at its intraday low of 50.90 pesos, but spiked
toward 51 pesos toward the close.

The Indonesian rupiah retreated to Rp 10,035 against the
dollar, compared with Rp 9,945 late Thursday, as local
corporations snapped up the U.S. currency following its slide to
a fresh five-month low of Rp 9,890 earlier in the day.

3. Belum

4. Oil ( 2 x 18)
;AFP;
ANPAf..r..
Oil-price
Oil prices eases on UN-Iraq talks
JP/OIL

Oil prices eases
on UN-Iraq talks

Agence France Presse
London

The price of oil eased off recent five-month high points on
Friday after a meeting of UN Secretary General Kofi Annan and the
Iraqi foreign minister eased concerns about possible military
action against Baghdad.

Benchmark Brent North Sea crude for April delivery fell to
US$22.75 in morning trading here, from $23.30 on
Thursday evening. At one point on Thursday, the April Brent broke
through $24 for the first time since September.

In New York, the April light sweet crude reference contract
closed up 56 cents at $23.71 on Thursday, having also
reached five-month highs earlier in the day.

Analysts have attributed much of the recent revival in the oil
price to signs that the U.S. economic recovery is on the mend.
U.S. Federal Reserve chairman Alan Greenspan said on Thursday
that "an economic expansion is already well under way."

But prices have also been beefed up by rising concerns that
Iraq, an important source of oil which also enjoys support from
some other Arab producers, might be a future target of the US-led
'war on terrorism'.

Commerzbank oil watcher Clay Smith said that the latest talks
on Thursday between Annan and Iraqi Foreign Minister Naji Sabri
on the possible return of UN arms inspectors to Iraq had gone
some way to calming market jitters over Iraq, and the price of
oil had come off recent highs.

"The intense nervousness has been calmed down slightly," Clay
said.

"An oil price at $23 is not sustainable under the current
fundamental dynamics," he told AFP.

Iraqi Foreign Minister Naji Sabri told reporters after
Thursday's talks: "We had a constructive and positive exchange of
views."

A UN spokesman in Washington, Fred Eckhard, said that as well
as the issue of arms inspectors, the pair had discussed problems
dating from the 1990 Iraqi invasion of Kuwait, such as missing
persons and the return of Kuwaiti property.

5. gold ( 2 x 20)
;Reuters;
ANPAf..r..
Market-Precious-Report
Gold easier in Europe, hovers at one-month low
JP/

Gold easier in Europe,
hovers at one-month low

Reuters
London

Gold prices were easier around one-month lows in Europe on
Friday, struggling to stay above the bottom of their new range
after long liquidation overnight, traders said.

The yen's rally and firmness in the Nikkei index prompted long
liquidation in gold, contributing to bullion's retracement
towards US$290.00 from levels near $300.00 last week. Gold eased
marginally under critical support at $290.00, but some buying
interest emerged at the lows.

A stronger yen means that yen-holders now have less incentive
to sell and switch to gold in an effort to protect themselves
from a depreciating currency.

In early trading, prices touched $288.15 but eventually
regained some lost ground and at 1119 GMT spot gold was indicated
at $289.00/289.50.

The market is now veering towards the lower end of a
$288.00/292.00 range. Any breach of $288.00 could see stops drive
gold back towards the low-$280s, they said.

"It's basically a technically-driven market, it's just
following what the charts are indicating," one trader said.

"I can't see the market collapsing...the market is going to be
in support territory between here and all the way down to
$286.00. But, on balance, I think the market will hold these
areas of support," another trader said.

The metal was fixed softer in the morning at a one-month low
of $289.30 a troy ounce versus Thursday's afternoon fix at
$291.00 an ounce.

Activity is expected to pick up later once COMEX opens. Latest
U.S. payroll data, as well as the COMEX option expiry, is
expected to lend some direction to the market, traders said.

Spot silver was almost unchanged, and was last indicated at
$4.47/4.49 from Thursday's close at $4.48/4.50.

Spot platinum was quoted at $515.00/520.00 against
$506.00/511.00 in New York, in a market supported by buying
interest. Palladium was at $364.00/374.00, slightly up from
$360.00/370.00 previously.