Govt fails to meet oil and gas target due to Karaha Bodas case

The government failed to meet its target to receive state revenue from oil and gas of about Rp 80.14 trillion (US$=Rp8,800) in 2002 because the state receipts from oil and gas exports of between US$300 million and US$400 million were still frozen by Bank of America, Minister of Finance Budiono said as reported by Kompas daily on Monday.

The minister said that the realization of the government?s revenue from oil and gas reached only about Rp 77.22 trillion as of December 341, 2002. "Up to now, some part of the state receipts from gas and oil exports were still frozen by Bank of America although the government had won the case in the Indonesian court," the minister said.

The International Arbitrary Agency ordered the bank to freeze Pertamina?s accounts in Bank of American last year as part of its plenary decision on the legal suit filed by Karaha Bodas Company LLC (KBC) against Pertamina and state-owned PLN.

KBC sued Pertamina and PLN following the suspension of its geothermal power project in Karaha, West Java. In the legal fight, Pertamina was asked to pay a compensation of about US$261 million.

The government opposed the seizure of the funds at Bank of America, and then took the case to the local court, which then issued a decision in the favor of the government. But the bank still held the fund to meet the order from the International Arbitrary Agency. (*)