E.Kalimantan drops request for assets seizure: Minister
Tuesday, April 9 2002 - 04:13 AM WIB
provincial administration has dropped its request to seize the assets in Indonesia owned by Anglo-Australian mining giant Rio Tinto and Anglo American energy firm BP PLC.
"South Jakarta court will announce its decision today to withdraw its previous ruling to sequester Rio Tinto and BP?s assets in Indonesia," Purnomo told Petromindo.Com.
No official of the East Kalimantan provincial administration was available for confirmation.
Last month, the court issued an injunction to sequester the Indonesian assets belonging to both the shareholders of coal mining firm Kaltim (KPC). The move was made to meet the request of the provincial administration which last year sued both firms for US$776 million on charges of delaying the divestment of their stake in KPC.
KPC, which is equally owned by Rio Tinto and BP Plc., operates a vast coal mine in the Sangatta area of East Kalimantan's East Kutai regency.
Under its contract of work, KPC was supposed to have divested a 51 percent stake to local buyers last year, but this was delayed for various reasons, including disagreement over the price of the shares.
East Kalimantan, which demands to be the preferred bidder for the KPC stake, accused the company of deliberately delaying the divestment obligation.
The KPC shareholders have been insisting that East Kalimantan's demand is against the coal contract of work signed with the Indonesian government which gives any interested Indonesian companies equal right to buy KPC's shares.
Among of the assets put under the court's control are BP?s working interests in the Tangguh liquefied natural gas project in Papua province; BP's oil and gas field in the Offshore Northwest Java (ONWJ) block; Rio Tinto?s shares in Kelian Equatorial Mining, which operates a gold mine in the Kelian area of East Kalimantan; Rio Tinto?s shares in copper and gold mining giant PT Freeport Indonesia in Irian Jaya; and the assets owned by the state-owned oil and gas firm Pertamina in the Arcadia Tower office building in South Jakarta.
Construction of the Tangguh project is estimated to cost US$1.5 billion. BP and Pertamina are expecting to win a contract from China for the supply of 3 million tons of LNG annually starting in 2005. The court seizure order is feared to undermine Indonesia's chance to win the contract.
The court seizure order also extended KPC share offer dead line for another three months to June this year. (Godang)