East Kalimantan softens stance on KPC divestment
Saturday, December 29 2001 - 02:06 AM WIB
?From now on, we?ll entrust everything to the central government. We?ll accept whatever price would emerge from negotiation,? Syaiful Teteng, a senior official at East Kalimantan provincial administration told Petromindo.com after an East Kalimantan delegation met with director general of energy and mineral resources Wimpy S. Tjetjep on Friday.
KPC shareholders, Rio Tinto and BP, are obliged to divest a 51 percent stake to local business entity. But the divestment program has been delayed for several times due to various reasons including the latest was a dispute on the share price.
The East Kalimantan administration, which has the top priority to purchase the 51 percent stake, has been insisting on a much low price compared to what KPC shareholders were offering.
The delay in the divestment program had prompted the East Kalimantan administration to file a legal suit against KPC, asking for US$ 776 million in compensation.
Teteng said he expected KPC divestment program could be completed in late January next year, as all parties involved in the negotiation including KPC were now open to negotiation and willing to communicate.
Meanwhile Teteng said the source of fund to purchase 51 percent of KPC shares was coming from PT Intan, a local firm linked with conglomerate Salim Group. However, he said PT Intan was not the only source of funding.
?We already secure commitment from several investors, including the regency of East Kutai, where KPC is located, which also has expressed interest in participating,? said Teteng.
Separately, Wimpy S. Tjetjep said that the government and KPC shareholders had agreed to indefinitely extend divestment deadline for year 2001 from March 2002. (alex/godang)