Karaha?s claim to Pertamina swells to US$307 million

The amount of the claim of PT Karaha Bodas Company (KBC) to state-owned oil and gas company Pertamina has swelled to over US$307 million from about US$261 million in 2000 due to the accumulation of interest and penalty, Bisnis Indonesia reported on Wednesday.

The increase in the claim was unveiled by Pertamina?s newly appointed legal advisor, Todung Mulya Lubis, in Jakarta on Tuesday. Todung said that there should be a breakthrough to settle the legal dispute with KBC. ?Otherwise, the claim will continue to swell,? he was quoted as saying.

Todung was appointed on July 26 as the new legal advisor of Pertamina, to help the company deal with a legal dispute with KBC.

In his interview with Bisnis Indonesia, Todung said that the government wanted an immediate solution in settling the prolonged legal dispute. ?There should be a breakthrough to settle the case but it should not cause financial loss to the state,? he said.

Meanwhile Koran Tempo reported on Wednesday that Pertamina had refused to pay the legal fee worth between US$4 million and $45 million to its former legal advisor in the KBC case White & Case.

Vice President of Pertamina, Mustiko Saleh, said in Jakarta on Tuesday that Pertamina refused to pay the legal fee to the American legal office due to its failure in dealing with the dispute.

?They (White & Case) lost in every court trial,? he was quoted as saying. ?The present Pertamina could not be forced to pay (the fee),? he added. Pertamina stopped the fee payment following the appointment of Alfred Rohimone as the company?s financial director last year.

Karaha Bodas sued Pertamina on the behalf of the government through the International Arbitrary for the suspension of its geothermal project in Karaha, West Java in 1997. In 2000, Pertamina were then asked to pay a compensation of US$261 million but the state-owned oil and gas company refused to settle the payment. (*)