Govt continues lobbying IMF, US over Karaha Bodas case

A government team is continuing lobbying the International Monetary Fund (IMF) and the United States to seek an out-of-court settlement over a dispute between state oil and gas company Pertamina and independent geothermal firm Karaha Bodas Company, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Wednesday.

Purnomo said in a parliamentary hearing the team was expected to report to the government in the near future the results of its work, Bisnis Indonesia daily reported.

?Indeed, the IMF has not yet responded to the government?s efforts. But we expect the team to continue approaching it,? Purnomo said.

Karaha had tried to seize Pertamina?s assets around the world in execution of a US$261 million arbitration award against the oil and gas firm in Switzerland in December 2000.

The dispute centers on a geothermal energy development project signed between Pertamina and state electricity company PLN, and Karaha in 1994 which was suspended by the government in 1998 due to the Asian financial crisis.

Karaha claimed it had invested more than $100 million to develop the project which is located in Karaha Bodas in West Java. Pertamina had refused to pay any portion of the award.

Karaha is a Cayman Islands-registered firm and is controlled by U.S. investors.

Pertamina president director Baihaki Hakim said recently the IMF was also held responsible for the dispute because the Karaha project suspension had been in line with the economic plan jointly developed by the government and the IMF. (*)