KPPU urges Pertamina, partners to pay compensation over controversial tanker sale

The Business Competition Supervisory Commission (KPPU)urged state oil and gas firm PT Pertamina and its partners to pay compensation to the state for the financial losses suffered during the sale of two giant oil tankers in 2004, Kompas reported Saturday.

KKPU chairman Syamsul Muarif reiterated the demand after the commission obtained Friday a copy of the Supreme Court's ruling made in November, which upheld KKPU's decision that there were irregularities in the sale of two Pertamina's very large crude carriers (VLCC)worth US$184 million to Bermuda-based shipping firm Frontline Ltd.

In its verdict, the Supreme Court ruled Pertamina, Frontline, Goldman Sachs (as financial adviser in the transaction), and Pertamina agent PT Equinox to pay compensation worth Rp 241 billion to the state.

The KPPU declared in March 2005, that Pertamina and the three business partners gulity of colluding in the transaction to allow Frontline win the vessels at a cheaper price than the prevailing market price at the time.(*)