Pertamina to deliver tanker amid confiscation threat
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.