Pertamina denies report of asset freeze

The state-owned oil and gas firm Pertamina denied reports suggesting that the Bank of America (BoA) has frozen its assets in New York under a court order for failing to pay compensation to independent power producer Karaha Bodas Co.

?? Until now our assets overseas are still safe,? Pertamina finance director Ainun Naim was quoted by the Suara Karya daily Wednesday in response to earlier reports saying that BoA has frozen over US$130 million of Pertamina?s assets.

Ainun also said that until now there had been no final ruling yet on the case with Karaha Bodas.

Karaha Bodas filed a complaint with the international arbitration panel in 2000 after the government suspended its power project in West Java in 1998 following the regional financial crisis. Karaha said that it had invested some $100 million.

The arbitration panel then issued a ruling asking Pertamina to pay some $261 million in compensation to Karaha, which is majority owned by U.S. firms Florida Light and Power, and Caithness Energy.

But Pertamina filed an appeal at the local court to annul the international arbitration ruling.

Ainun said that it was allowed for Pertamina to make such a move because the contract with Karaha, signed in 1994, was made based on local law.

He said that the local court proceeding was expected to start next month.(*)