in todays media:
Indonesian state-owned businesses have not traditionally been major investors in Australia. When they have invested, it has not always turned out well.
Just as Cooper Energy, the ASX-listed gas producer which has spent several years trying to resolve a straightforward dispute with Indonesia’s PT Pertamina over the Basker Manta Gummy oil and gas field off the Gippsland coast in Victoria.
The Basker Manta Gummy field was originally developed by Royal Dutch Shell and had an estimated development value of $1.2 billion. It was later owned by Cooper, Beach Energy, Japanese giants Sojitz and Itochu and PT Pertamina.
But Basker Manta Gummy has been decommissioned – and all parties have paid for its shutdown, except PT Pertamina. That’s left Cooper Energy in a bind, and with a big bill – the decommissioning liability is expected to be between $240 million and $280 million – constraining the company’s ability to develop other gas supplies.
It is unclear who is at fault, but PT Pertamina has certainly made it very hard to find out. It deregistered its local subsidiary in 2013 and so far, progress in the Victorian Supreme Court has been slow. PT Pertamina, sources said, has been disputing technical points relating to the service of the documents at their offices in Indonesia.
Either way, the issue is now on the radar of officials in Jakarta and Canberra. Cooper Energy has met with Indonesia’s ambassador to Australia, and with Australian officials in Indonesia. So far, the matter has not been resolved.
Of some note, the Basker Manta Gummy scandal has not only hurt Cooper Energy. PT Pertamina’s then president director, Karen Galaila Agustiawan, was sentenced to prison in 2019 by a corruption tribunal for causing the Indonesian government to lose money on the transaction. Prosecutors had claimed that Agustiawan had failed to conduct proper due diligence before PT Pertamina’s Hulu Energy subsidiary purchased a 10 per cent stake in the oil field. The eight-year jail sentence was overturned shortly afterwards.
For its part, Cooper Energy shares have bounced back in the past year but remain miles off the 59c levels where they traded less than five years ago. Its Orbost gas plant is continuing to undershoot nameplate capacity, nearly two years after it tapped investors for $244 million equity and $400 million debt to acquire the asset from APA Group.
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