We will study that. We will see which asset because they initially offered the asset in the mudflow-impacted region.
Jakarta (ANTARA) - The government will assess the asset value of oil and gas exploration firm PT Lapindo Brantas Inc and its subsidiary, PT Minarak Lapindo Jaya, to repay Rp1.91 trillion of their governmental debts.

"They want to hand over their assets, okay," Director General of State Asset Management of the Finance Ministry Isa Rachmawarta stated here on Friday.

The audit result of the State Audit Agency (BPK) in 2019 showed that Lapindo Brantas Inc and PT Minarak Lapindo Jaya owed Rp1.91 trillion to the state, comprising Rp773.38 billion in principal debt, Rp163.95 billion in debt interest, and Rp981.42 billion in penalties.

"We will study that. We will see which asset because they initially offered the asset in the mudflow-impacted region," he remarked.

Rachmawarta pointed to progress achieved in the issue pertaining to the decision to allow debt payment with the company's assets.

In 2018, the company had paid Rp5 billion of its debt to the government to pay compensation to victims of the mudflow in Sidoarjo, East Java.

"We want to see progress in the case and Lapindo to fulfill its obligation," he remarked.

However, the government will continue to seek debt payment in cash if the company's asset value did not align with the debt amount.

"Cash payment is still the main option for us. However, now, we start to see other options that can be used for them to fulfill their obligation," he stated.

The Sidoarjo mud flow, the biggest mud volcano to have occurred globally, has been attributed to the blowout of a natural gas well drilled by PT Lapindo Brantas in Porong Sub-district, Sidoarjo, East Java, in 2006.

The mud flow submerged 400 hectares of land, while 45 thousand people lost their homes.

PT Lapindo had to pay Rp3.8 trillion in compensation to the victims, though it managed to pay only Rp3.03 trillion. The government has agreed to offer a bailout of Rp773.38 billion for the company, and the loan was due in July 2019.

Related news: VP supports Lapindo`s drilling plan at new well in Sidoarjo
Related news: Hundreds of security personnel guard Lapindo gas well drilling

EDITED BY INE

Translator: Astrid FH, Sri Haryati
Editor: Suharto
Copyright © ANTARA 2020