Petroselat Ltd, the subsidiary of PT Sugih Energy Tbk (SUGI), was declared bankrupt on July 5, 2017. Since then, Petroselat (the Company) has been still trying to make amends with its creditors in order to avoid insolvency process. In the meeting of creditors held on September 6, 2017, SUGI’s representatives finally revealed the name of the potential investor that may help the Company resolve its problems. SUGI asked for 30 additional days to finish the due diligence process, but the creditors only gave 15 days.

As we previously reported, on April 2016, two of the Company’s cooperation partners, i.e., PT Richland Logistics Indonesia and PT Sentosasegara Mulia Shipping filed a bankruptcy lawsuit. The lawsuit stemmed from the partnership agreements (KKKS) between Petroselat and the two companies mentioned related to the use of Tug Boat and Barge property. In the KKKS with Richland, Petroselat supposedly agreed to pay rental fee in the amount of US$2,498 per day. With Sentosasegara, Petroselat supposedly agreed on a rental fee of US$1,788 per day.

The two plaintiffs claimed to have completed all the obligations under the contract. Partnerships with Petroselat was going well. Until June 2015 when Petroselat could no longer pay the rent as agreed. The plaintiffs sent a subpoena on October 12, 2015 and demanded Petroselat to meet its obligations no later than October 31, 2015. But Petroselat failed to comply. In the calculation per February 29, 2016, Petroselat’s debts to Richland amounted to US$402,022. Petroselat’s debt to Sentosasagera amounted to US$448,442 per January 28, 2016.

At the time when the lawsuit was filed, the Director and Corporate Secretary of SUGI Fachmi Zarkasi told the press that the company had not received a formal notice on the bankruptcy lawsuit from Petroselat. But Fachmi did confirm that Petroselat had disagreements on its bills with the plaintiffs. The management of SUGI, which was appointed by the Extraordinary General Meeting of Shareholders (RUPSLB) in January 2016, then said that they were conducting a verification on contracts and bills in the subsidiary.

Petroselat is the operator of the Selat Panjang Block in the eastern region of Riau. In July 2013, PT Sugih Energy Tbk (SUGI) obtained 55 percent participating interest and operating rights to the Selat Panjang PSC by acquiring Petroselat. The Selat Panjang block is listed as SUGI’s first producing asset with daily oil output of approximately 750 BOPD of oil and approximately 1 MMCFD of gas. The remaining 45 percent shares of Petroselat is owned by PetroChina International SelatPanjang Ltd. The production sharing contract for the Selat Panjang block remains valid until September 2021, while the unconventional part of the Selat Panjang will be valid for 30 years or until March 2045. In May 2015, Petroselat announced the signing of Gas Sales and Purchase Agreement (GSPA) with PT PLN (Persero) for 5 years. The total gas volume is c.8 Billion British Thermal Unit (BBTU), equivalent to the total gas sales value of over US$50 million.

In the hearing held on May 18, 2016, the panel of judges of the Commercial Court decided that the disputing parties ought to settle outside of the court, and thus the lawsuit against Petroselat was officially revoked. But on August 30, 2016, the Company must once again face a lawsuit, this time on Suspension of Debts Payment (PKPU) filed by PT Power Oilfield and Chemical Services and PT Petro Bangun Engineering registered under case No. 93/Pdt.Sus-PKPU/2016/PN.Jkt.Pst. The court registry did not provide any details on the lawsuit, but on September 27, 2016, the Panel of Judges decided to decline the lawsuit. And Petroselat once again managed to escape bankruptcy.

After that, the Company faced a bankruptcy lawsuit after two of its partners PT Sentosasegara Mulia Shipping and PT OSCT Indonesia filed the lawsuit on May 10, 2017. The lawsuit registered under case No. 28/Pdt.Sus-Pailit/2017/PN Pn.Jkt.Pst strangely did not face any obstacle. Petroselat was declared bankrupt just two months after the lawsuit was filed.

In total, Petroselat has debts worth US$1 million from a boat charter agreement with PT Sentosasegara Mulia Shipping and from cooperation of providing K3 equipment (security, health and safety) with PT OSCT Indonesia. The debts have matured. PT Sentosasegara Mulia Shipping previously sued Petroselat related to the same problem, and agree to have the problem settled outside of the court, but the agreement was not obeyed by Petroselat.

After the decision was promulgated, it was made known that the amount of Petroselat’s total obligation to its 45 concurrent creditors had reached Rp116.89 billion. The Company’s obligation to its preferred creditors reached to Rp1.2 billion. All bills were verified and so far the Company does not have any separatist creditor. The team of curators said that they had rejected the bills submitted by SKK Migas in the amount of Rp347.61 million on the grounds that the bills were a joint bill for the sales of gas to PT Perusahaan Listrik Negara (Persero). The other reject bills were the bills submitted by PT Dyandra Promosindo (Rp23.5 million), PT Saripari Geosains (Rp1.24 billion) and PT Richland Logistics Indonesia (Rp2.95 billion).

But even when the bills were being verified, the Company still tried to reach a peace agreement with its creditors by filing a peace proposal. Petroselat’s legal counsel Aji Wijaya said that the debtor’s project was a production sharing contract (PSC) between Petroselat and PT Pertamina (Persero). PSC rules on oil and gas sector states that Petroselat does not have any wealth because all assets are state property. Therefore, if the debtor is bankrupt and declared to start the insolvency process, the result of the liquidation of the Company will not give any benefit to the creditors.

Aji revealed that Petroselat still had a concession project to continue its operations, and that the peace proposal was the way for the debtor to continue its business. The proceeds of the going concern would be used for paying the bills in instalments. In addition, the Company also stated that there were potential investors to support the business.

At first, the rumor has that PetroChina was the company keen on helping Petroselat. But on September 6, 2017, SUGI Director of Finance Rahman Aqil told the Company’s creditors that the potential investor was PT Aserra Capital, the holding company of PT Apexindo Pratama Duta Tbk (APEX), the controller of  APEX, PT Aserra Propertindo, Magnolia Close Investments Inc. and Summit Drilling International Ltd (SDI).

The discussion between Aserra and Petroselat is reportedly in the stage of due diligence, that is why the Company asked the creditors for additional 30 days to finish the process. But the legal counsel of the two plaintiffs Hendra Setiawan Boen said that 15 days were all they could get to wrap it all up. The creditors are reluctant to wait because the discussion has been dragged on for too long. Moreover, the creditors hope that the potential investor would attend the meeting of creditors because the creditors want to be involved in the discussion process. In addition, the creditors also want to know more about the company’s latest situation because as long as this dispute takes place, the creditors are never given any chance to know the position of the Company’s assets.

After the two weeks of additional time, the creditors will vote to decide on Petroselat’s fate. If Petroselat cannot convince the creditors, the insolvency process would continue. In the offered peace proposal, Petroselat divides the creditors into three categories based on the amount of bills with different payment schemes with 6 months grace period, namely:

  1. “A” creditors are creditors with a receivable of less than 1 percent of the total amount of debts of the Company and will receive payment within a period of 22 months.
  2. “B” creditors are creditors with a receivable that is between 1 percent and 2.99 percent of total amount of debts and will receive payment within 28 months.
  3. “C” creditors are creditors with a receivable that is above 3 percent of the amount of total debts and will receive payment within 48 months.

The Company has established a monthly payment allocation scheme, namely:

  • 1st to 6th month amounting to US$25,000;
  • 7th to 18th month amounting to US$75,000;
  • 19th to 30th month amounting to US$150,000;
  • 31st to 42nd month amounting to US$275,000;
  • 43rd to 47th month amounting to US$405,000; and
  • 48th month amounting to US$431,339.

By Pradnya Paramitha

Copying, redistributing, and retransmitting this article is a violation of copyrights.