Pertamina wants Jakarta court to settle Karaha row: Report
Tuesday, March 12 2002 - 08:49 AM WIB
Karaha has threatened to seize Pertamina's assets around the world in execution of a $261 million arbitration award against the oil giant in Switzerland in December 2000.
"We will seek a Jakarta court to settle our dispute with Karaha because our geothermal contract with them is based on Indonesian law," Pertamina's Finance Director Ainum Naim was quoted as saying by Reuters.
"The Indonesian courts have to confirm the arbitration decision," he added.
The dispute centers on a geothermal energy development project signed between Pertamina and Karaha in 1994 which was suspended by Indonesia in 1998 due to the Asian financial crisis.
Mines and Energy minister Purnomo Yusgiantoro said last month he wanted Pertamina to seek an out-of-court settlement with Karaha.
Karaha has said it invested more than $100 million to develop the project. Pertamina has refused to pay any portion of the award.
On a separate matter, Naim said Pertamina was in talks with oil giant Unocal over a geothermal project in West Java which was also affected by the financial crisis.
That project continued throughout the crisis but Pertamina and state electricity firm Perusahaan Listrik Negara (PLN), also involved in the project, had difficulty making payments.
"We are still negotiating with Unocal over the payment...we expect to sign an agreement with Unocal as soon as possible," Naim said.
Geothermal power is an important alternative energy source for Indonesia which experts have said could face a power shortage in 2003 and 2004. (*)