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.