Pertamina to avoid using bank accounts in U.S.

State-owned oil and gas company Pertamina is mulling to avoid using U.S. bank accounts for its transactions with its partners, Kompas newspaper reported on Tuesday.

This action is being planned to avoid freezing of Pertamina?s accounts in the U.S. banks by American courts in connection with a dispute with American firm Karaha Bodas Company (KBC).

?We will explain to our partners that the amount from transactions credited into the Pertamina?s bank accounts in the U.S. has always been frozen by U.S. courts. Therefore we will ask them (partners) to understand (the problem) and not to make any transactions through the U.S. banks,? Pertamina?s finance director Alfred Hadrianus Rohimone told reporters on Monday in Jakarta.

Pertamina?s lawyer in America will be coming to Indonesia to talk about a strategy to face lawsuit, Alfred said.

Under the strategy, Pertamina will launch a campaign in foreign media to explain the facts about the KBC?s project realization of amount, which was not same with the KBC?s claim of $261 million, to the international public.

Actually, Pertamina, according to Alfred, has agreed to pay $111 million from the total of $261 million claimed by KBC. However, KBC has refused to receive $111 million and demanded the full amount of $261 million as per the arbitration?s decision.

Last week, KBC has requested the U.S. court to freeze another six bank accounts of PT Pertamina in the U.S.

According to Alfred, the plan to freeze new six bank accounts is a part of the ongoing legal battle between KBC and Pertamina regarding power project.

Alfred mentioned that New York court had ordered the banks to return US$650 million from 12 bank accounts in the U.S. to the owner Pertamina. But Pertamina has not yet received the money so far.

?Until this day, we are trying to get back $650 million from 12 bank accounts and block the efforts to freeze six more accounts. All these accounts are belong the Indonesian government and not belong to Pertamina,? Alfred said on the sidelines of a hearing with the House of Representatives? Commission VIII in Jakarta.

The Karaha Bodas Project was a joint venture power plant project between Pertamina and Karaha Bodas Co, a power company owned mainly by U.S. investors.

The project has been halted since 1997 in the wake of the financial crisis in Indonesia.

As a result, KBC took the Indonesian government -- represented by Pertamina -- to court.

So far, KBC?s dispute with Pertamina has been processed in several courts, including those in Houston, New York and Delaware in the USA, as well as in Canada, Hong Kong, and Singapore. (*)