Pertamina files arbitration proceeding against TPPI

State oil, gas firm PT Pertamina (Persero) has filed an arbitration proceeding against PT Trans Pacific Petrochemical Indonesia (TPPI) with the Indonesia Arbitration Agency over the latter's failure to repay debts amounting to US$600 million.

?Last month, we filed an arbitration proceeding against TPPI with the Indonesia Arbitration Agency. The dispute is related to debt, numbers of assets and etc,? Pertamina?s spokesman M. Harun said on Monday.

Pertamina?s president director Karen Agusitawan also said that Pertamina is currently reviewing options to restructure TPPI's debt including an option of turning the debt into shares.

According to Pertamina, the total $600 million owed by TPPI to Pertamina include $440 million in principal. The debt came as result of the purchase by the firm of low sulphur wax residue (LSWR) worth $257.5 million and Senipah crude oil worth $182.8 million from Pertamina.

TPPI has failed to pay for the commodities for three years and Pertamina has sent the firm default notes three times. (bernard)