Total refutes asset preservation order
Total refutes asset preservation order
Fabiola Desy Unidjaja, The Jakarta Post, Jakarta
Total E&P Indonesie has asked the Commercial Court to reject its
two former contractors' demands for the issuance of an asset
preservation order, following a bankruptcy petition filed by the
contractors.
During Monday's third hearing, Total's defense lawyer Todung
Mulya Lubis said the assets, which the contractors had demanded
the seizure of, belonged to the state. Based on prevailing Law
No. 1/2004 on the state treasury, state assets are not subject to
confiscation by any parties.
"Referring to a letter issued by the Oil and Gas Implementing
Body (BP Migas) on Feb. 8, all assets mentioned in the production
sharing contract (between Total and the contractors) are not
Total's assets and are not subject to confiscation by any
parties," Todung told the hearing.
Both contractors -- PT Istana Karang Laut and PT Sarana Kaltim
Jaya -- demanded the court issue the asset preservation order on
the Tunu oil field project, the company's operational building in
East Kalimantan, on-shore gas process in Senipah, off-shore
facility in Tambora, payment from Liquefied Natural Gas (LNG)
buyers from Japan, South Korea and Taiwan, as well as the
condensate payment from Senipah.
Those assets belong to the state and are under BP Migas'
supervision.
Should the court issue the asset preservation order, it could
hamper ongoing gas production and cause a shipment delay to
buyers.
Total -- a local affiliation of the world's second largest gas
producer Total SA -- is facing the bankruptcy petition from the
two contractors as it refused to pay a US$7.131 million claim to
the contractors over the construction of platforms and a gas
processing plant at Tunu field.
The contractors made the claim based on the results of the
Development Finance Comptroller's (BPKP) audit of the project.
The audit was conducted with the consent of both the parties in
dispute.
"Besides, the value of the assets is much higher than the
claim," Todung said.
Both contractors' lawyer OC Kaligis said after the trial that
it was impossible for such a huge company as Total not to have
any assets in Indonesia.
"They (Total) have been operating in this country for a long
time, how can they claim not to have anything here," Kaligis
argued.
He further said that the contractors were only asking Total to
pay the claim, which had been audited by the BPKP.
"Total agreed that the BPKP perform the audit. After the
result was revealed, they backed down," Kaligis said.
After the trial, Todung insisted the court not issue the asset
preservation order. "The issuance of the order would disrupt
investment in the country," he said.
Total signed a US$19 million contract in 2001 with the
contractors for a projec. It had paid a total of $25 million in
2003 for several adjustments made during the construction, or $6
million more than the amount originally agreed upon.
The court adjourned the trial on Thursday to allow time for
both parties to prepare evidence and witnesses to support their
claims.