Colin Powell willing to facilitate Karaha Bodas dispute settlement: Purnomo

U.S. Secretary of State Colin Powell is willing to facilitate an out of court settlement of the Karaha Bodas power project dispute between Indonesia?s state oil and gas firm Pertamina and Cayman Islands-registered firm Karaha Bodas Company (KBC), Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Monday.

Purnomo, speaking in a parliamentary hearing, said that the office of the U.S. State Secretary had last week sent a letter to the Indonesian government, through its embassy in Washington, saying that Powell was prepared to facilitate resumption of negotiations between Karaha Bodas Company and Pertamina.

The letter also said that Powell supported an out of court settlement over the dispute, Purnomo said.

The Indonesian government and Pertamina had been involved in a legal battle with KBC, which is controlled by U.S. investors, over a geothermal power project in Karaha Bodas village in West Java.

Powell met with Purnomo during his official visit to Indonesia last August.

A Switzerland-based arbitration panel in 2000 ordered Pertamina to pay KBC a total of US$261.1 million in compensation for the suspension by the government of its Karaha Bodas project.

The Indonesian government refused to pay as demanded arguing that the $261.1 million was unreasonable and that the project suspension had been force majeur as Indonesia was then hit by a severe economic crisis. The project was suspended in 1998. (godang)