Pertamina to deliver tanker amid confiscation threat
The Jakarta Post, Jakarta
State oil and gas firm PT Pertamina is scheduled to hand over one supertanker to Norway's Frontline Ltd. on Friday, according to a company official.
Frontline recently won a tender to acquire two supertankers from Pertamina for a total of US$184 million.
"According to schedule, the first Very Large Crude Carrier (VLCC) will be handed over to Frontline tomorrow," Pertamina spokesman Hanung Budya Yukyanta told The Jakarta Post on Thursday.
The tanker will be handed over at the Hyundai Heavy Industries shipyard in Ulsan, South Korea.
Hyundai is still constructing the second vessel, which is scheduled for delivery in September.
Hanung made the comment amid a report that U.S.-based power company Karaha Bodas Company (KBC) planned to confiscate Pertamina's overseas assets, which include the two supertankers following a protracted legal dispute.
Koran Tempo daily reported that KBC had filed a request to a South Korean court to confiscate the vessels following Pertamina's loss in a legal dispute with the former firm.
Hanung said the company had yet to receive the confiscation order. However, he acknowledged that KBC had sent a letter to Hyundai Heavy Industries to notify it of the confiscation plan.
"We have been worried that this might happen. We are taking measures to prevent that," he added, while refusing to give details on the measures to be taken.
Hanung declined to comment when asked if Frontline would cancel the transaction.
KBC filed a lawsuit against Pertamina in an arbitration court after its power project, along with 26 other independent power projects, was suspended by the government in the wake of the economic crisis in 1997.
Pertamina lost in the arbitration court in 2000 and was ordered to pay compensation totaling $261 million. The company had been seeking to annul the arbitration ruling in U.S. courts but lost the legal battle early this year.
The U.S. court ordered Pertamina to pay the compensation and the interest totaling $291 million.
Pertamina has yet to pay the compensation, which prompted KBC to file a request in U.S. courts, Hong Kong and Singapore to confiscate Pertamina's overseas assets.
Hanung confirmed that KBC has filed a bankruptcy petition against Pertamina's subsidiary Petral, which has assets in Hong Kong and Singapore.
Petral is responsible for importing for Pertamina 60 percent of the oil-based fuel products used for domestic consumption.
"We have reported to the government. We hope the government will do something so that Petral can keep working," Hanung said.