Pertamina can sell its assets to pay KBC claim

State-owned oil and gas company PT Pertamina will have to sell its assets to pay US$261 million in compensation to PT Karaha Bodas Company (KBC), the Bisnis Indonesia newspaper reported in its Saturday.

Pertamina’s commissioner Roes Aryawijaya said the company must pay the claim as per the court judgement.

“ If the Pertamina’s cash flow is not enough, it must sell some of its assets. But I do not know it can sell which assets. It is better to ask the company’s director,” Roes said in Jakarta after attending Friday prayers at his office.

On Oct. 4, the U.S. Supreme Court rejected Pertamina’s bid to nullify the 2000 arbitration award to KBC

This decision puts Pertamina’s assets in the U.S. under major threat. According to the latest news, KBC has already seized over US$29 million from the Pertamina’s 15 bank accounts in the U.S.

Separately, Pertamina’s president director Widya Purnama said he would not pay a single penny to KBC.

“Please note down, Pertamina will not pay, if it is told to pay, I will resign from my post. I am not playing,” Widya said.

Following the 1997 Asian fnancial crisis, KBC’s power plant project at Garut, West Java was cancelled by the government, which prompted the company to file lawsuit against its former partner Pertamina at the international arbitration.(*)