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THE COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
REPUBLIC OF INDONESIA
Main Building, Ministry of
Finance, Jl. Lapangan Banteng Timur No.2-4 Jakarta Pusat
Tel: (021) 380-8384 Fax:
(021) 344-0394 Website:
http://www.ekon.go.id
Highlights
Politics
Regions
Economy
-
President Yudhoyono promised improved incentives for natural
gas industry
-
Vice President Kalla said fuel and power subsidies would be
halved by 2009
-
Tenders for $4.3 billion in infrastructure work in process,
says minister
Macro
economy
Investment
State
concerns
SOEs
Private
sector
Banks
Power
-
Power utility PLN signs 10 power purchase contracts for new
plants
-
Spending on subsidies for power, fuel to be cut
Oil & gas
Mining
POLITICS
AGO
Appeals Munir Decision
The Attorney
General’s Office (AGO) said on Thursday (18/1/07) it will file
an appeal against the Supreme Court verdict that acquitted
Garuda pilot Pollycarpus Priyanto of the murder of human rights
campaigner Munir Said Thalib.
AGO spokesman Salman Maryadi was quoted by Elshinta radio
station as saying that a team of prosecutors has been formed to
study the controversial October 3, 2006 judgement.
"We have a strong basis to file a review against the Supreme
Court verdict in the Munir case," he said.
Munir died of arsenic poisoning on a flight from Jakarta to
Amsterdam in September 2004 in what human rights groups claim
was a conspiracy act.
Court
Rejects Review Request
The
Constitutional Court rejected on Thursday (18/1/07) a request to
strike down five laws restricting active police and military
officers from voting or running in general elections.
Presiding judge Jimly Asshiddiqie, who is also chairman of the
court, said the appeal by retired police officer Sofwat Hadi
failed because of legal technicalities.
"Although the Court has the right to examine Law No 12/2003 on
the election of legislative councils, Law No 23/2003 on
presidential and vice presidential elections, Law No 32/2004 on
regional administrations, Law No 2/2002 on the national police
and Law No 34/2004 on the Indonesian military, and to issue a
ruling on it, we conclude that the plaintiff did not have legal
standing to file the lawsuit,” he said.
Hadi, whose
last rank before retirement was senior commissioner, was an
active officer when he ran for the Regional Representatives
Council (DPD) in the 2004 elections. He is now a DPD
representative from South
Kalimantan.
"Retired police and military officers do not have the same
status as those who are still active in the police or the
military, according to the current law," Asshiddiqie concluded.
The court said Hadi could neither behave as if he was still an
active officer, nor act in the name of the National Police.
The five laws contain articles which regulate the rights of
active military and police officers to vote and to run for
office in general elections.
Hadi maintained the laws contradicted the universal principle of
voting rights stipulated in the 1945 Constitution.
He added that the right to vote and run in elections was
implemented erratically in Indonesia
because the legislation differentiated between active and
retired officers.
Hadi said the 1945 Constitution guarantees fair treatment
without discrimination to all citizens, pointing to Paragraph I
of Article 28 and Paragraph D of the same article.
Separately, political analyst Ikrar Nusa Bakti suggested that
soldiers and policemen should be given the right to run for
office, but not to vote in the elections in order to prevent
them from being targeted by political lobbyists.
"The Indonesian military has been conducting an internal survey
into whether their members would opt for the right to vote and
be elected or not,” Bakti told
The Jakarta Post.
“The findings can be used as a consideration.”
REGIONS
Bird
flu Toll at 62, Backyard Poultry Banned
A
19-year-old woman from West Java died from bird flu on Friday
bringing Indonesia’s
death toll from the deadly disease to 62, the Ministry of Health
said on Saturday (20/1/07). Meanwhile, the government announced
that it will expand a ban against backyard poultry, planned for
Jakarta, to other provinces.
Dr. Muhammad
Nadirin at the ministry's bird flu center, told Reuters that the
woman was sick since January 11 and was admitted to the Garut
General Hospital on January 17. "Six days before she got sick
she had contact with a sick chicken that, according to the
agriculture department's rapid test, was also positive for bird
flu."
On Thursday
(18/1/07), Minister of Health Siti Fadilah Supari said the
government will extend a ban against backyard poultry, which
previously would only apply in Jakarta starting February 1, to
eight other provinces that had reported human infections.
"There must
be special zones for poultry away from residential areas," she
told reporters, adding the measure would eventually be enforced
in all the country's 33 provinces.
Nyoman
Kandun, the ministry's Director General for Communicable Disease
Control, said poultry owners would be paid compensation of
Rp12,500 for each sick bird killed. A fully grown chicken costs
about Rp35,000 in Jakarta.
Coordinating Minister for People's Welfare Aburizal Bakrie said
Monday the government would begin widespread culls of poultry in
three high-risk provinces of Banten,
Jakarta
and West Java during the next six months. "This step will be
followed by similar actions in 14 other provinces, which have
had bird flu virus outbreaks," Bakrie said after meeting Health
Ministry officials.
Villagers
Not ‘in Hiding’: Papua Police
Puncak Jaya Police in Papua have denied a statement issued by
the Human Rights Study and Advocacy (ELSHAM) earlier this month
that nearly 4,000 Puncak Jaya villagers have taken refuge in
other villages and forests following a security operation to
find an armed separatist group in the Mt. Kimibaga area, Antara
reported.
“ELSHAM can say that 4,000 villagers of Puncak Jaya have taken
refuge but they can come here to witness the real situation in
the village. Is it true that they have taken refuge?” Puncak
Jaya Police chief Yakobus Marzuki said on Tuesday (16/1/07).
“We allow the organization to find the real figures on the
number of villagers who have sought refuge, but as far as we
know, the villagers here are doing fine and continuing their
daily activities,” he added.
ECONOMY
Incentives for Gas Industry
President
Susilo Bambang Yudhoyono told the opening of a natural gas
seminar on Tuesday (16/1/07) that the government will further
ease investment procedures and offer more incentives to attract
investment in the sector.
The
government was prepared to offer tax and production sharing
incentives to help meet rising domestic demand at home and
existing export commitments, The
Jakarta Post
reported.
"The
government will consider various new fiscal incentives such as
value added tax (VAT) and import duties, as well as tax reforms
to lure more investors to the country's gas sector," Dr.
Yudhoyono said.
Minister
for Mines and Energy Purnomo Yusgiantoro said the government
would consider applying a new production split ratio of 51% for
the government and 49% for producers. At present, producers
receive 30% of net production, while the other 70% goes to the
government.
He
added that the amount of LNG exported would be cut by 8% to 50%.
"Our new policy is to maintain a balance between gas export and
domestic use," Yusgiantoro said.
The
government is completing a study into the country's gas supply
and projected demand, and the results will determine how much
gas Indonesia can export, the minister said.
Meanwhile
Vice President Jusuf Kalla said the amount allocated for fuel
and power subsidies would be cut to Rp10 trillion in 2009 from
this year’s figure of Rp20 trillion.
Kalla said
this could be done by getting power companies to use more coal
and less oil to generate electricity and by getting households
to use more liquefied petroleum gas and less kerosene for
cooking.
The
government is also aiming to boost oil and gas output by 30%, he
said. Oil output is now about 1 million barrels per day and gas
output at 7.5 trillion cubic feet per day.
Chief
economics minister Boediono, meanwhile, said 10 infrastructure
tenders valued at Rp39 trillion ($4.3 billion) would be
completed this year, allowing the projects to go ahead in 2008.
The
projects include two power plants, two toll roads, a ferry
terminal, a seaport, three water treatment plants and a
telecommunications project.
In
other sectors, cement sales for December were reported to have
risen by 12.3%, producing a rise of 1.8% for the full year.
Strong
sales growth in November and December took the total annual
sales to 32.1 million tons.
On the
macroeconomic front, Bank Indonesia said it expects the rupiah
will continue to strengthen in line with an expected improvement
in the economy.
"Fundamentally, the rupiah should continue to strengthen,"
central bank's deputy governor Aslim Tadjuddin told reporters.
BUSINESS
BRIEFS
MACRO
ECONOMY
BI
Sees Room for More Rate Cuts
Bank Indonesia (BI) sees room for further rate cuts, helped by
relatively stable inflation, Deputy Governor Hartadi Sarwono
said on Wednesday (17/1/07).
The central bank has been gradually cutting its key interest
rate, known as the BI rate, after inflation subsided from about
six-year highs in late 2005. The BI rate fell to 9.5% this
month, the lowest since August 2005.
"Room for lower rates is still there because inflation has
tended to not fluctuate right now," Sarwono said, according to
Reuters.
The Central Bureau of Statistics said on Thursday (18/1/07) the
country’s annual consumer price inflation is likely to ease in
January from the previous month as prices of rice, a key staple
food, are seen as stabilizing.
Annual inflation briefly rose to 6.6% in December from 5.27% in
November after rice prices increased due to shortages in some
parts of the country following a longer-than-usual dry season.
Rice prices make up about 25% of the consumer price index (CPI).
"I see the year-on-year figure in January to be lower than
6.6%," statistics bureau chief, Rusman Heriawan, said. "The
prices of rice are already stuck at their highest levels," he
said when asked about the impact of rice prices on January
inflation.
He did not elaborate, but the government has said it will
import rice between January and March to help stabilize prices
in the domestic market.
The central bank has set a target for inflation of 6%, plus or
minus 1 percentage point, at the end of 2007 and about 5% at the
end of 2008.
Total
2006 Exports May Hit $100b
Trade Minister Mari Pangestu said she is upbeat that the total
value of the country's exports in 2006 surpassed the $100
billion mark, representing a 17.6% increase over the record in
2005.
She said her belief was based on increasing commodities prices
and the higher contribution of manufacturing products.
"The value of Indonesia's exports during the first 11 months of
last year had already reached $91.2 billion. With an average
monthly value of more than $8 billion, I think last year's total
export value exceeded $100 billion," Pangestu said Wednesday
(17/1/07), according to The
Jakarta Post.
The actual export figures for December will be announced early
next month.
Pangestu said that besides the higher prices for a number of
commodities, such as rubber, palm oil and gold, export earnings
had also been enhanced by manufactured exports, which
contributed 67.5% to the value of the nation's total exports.
Indonesian's textile exports during the January-November period
grew by 10.5%, footwear 13.7%, automotive components 28.5%, and
iron and steel 79.8%.
She said that if the trend continues, Indonesia's exports would
likely grow by up to 19% this year. "We will try to sustain the
export growth of between 17% and 19% recorded over the last two
years," she said. "At least, we will be able to meet the
government's target of between 8% and 10% growth as stated in
the mid-term development plan."
The challenge for the future is how to improve the investment
climate in Indonesia and continue to encourage new investment in
those sectors that could augment Indonesian exports in the
coming years, she noted, adding that her department would also
continue to encourage exporters to target prospective markets,
such as the Middle East, which is experiencing a construction
boom.
"Construction services and related products, such as furniture,
have good potential there," she said.
BI Awards Rp25t Worth of 1-Month SBIs
Bank Indonesia (BI) said it awarded Rp25 trillion worth of Bank
Indonesia Certificates (SBI) at a fixed interest rate of 9.5% at
its weekly auction, XFN-Asia reported on Wednesday (17/1/07).
It said the auction absorbed 27.1% of the bids.
Rp3t Bonds to Sell on January 23
Indonesia aims to raise Rp3 trillion ($330.6 million) from sales
of government bonds maturing in 2027 through an auction on
January 23, a part of efforts to finance maturing debt, the
Finance Department’s treasury director general, Rahmat Waluyanto,
told Reuters on Tuesday (16/1/07).
INVESTMENT
Govt. Targets New Investment in Footwear
The government this year aims to attract $125 million in fresh
investments in the footwear industry and increase shoe exports
by 15% to $1.7 billion.
"We are confident about the targets as the European Union
continues to impose an anti-dumping import duty on Chinese
products," the Industry Department’s director for multifarious
industries, Nugraha Sukmawidjaya, said Wednesday (17/1/07).
The business climate in the footwear industry is good as
indicated by the fact that 16 companies invested $80 million in
the sector last year, Sukmawidjaya said, according to Antara.
This year, 25 other companies are expected to invest $125
million, he added.
Eight
Carmakers Set Up Bases
Eight major car manufacturers from Japan, Europe and China have
made Indonesia their production base, an official said.
Toyota, Daihatsu, Honda, Suzuki, Nissan, Mitsubishi of Japan,
BMW of Europe and Cherry of China have made Indonesia a
production base, Director General for Transport Equipment and
Information Technology, Budi Dharmadi, said, according to Antara.
Dharmadi said the government hopes to persuade other carmakers
to make the country their production base. He said Indonesia
has become the production base for 16 brands of cars.
The government is targeting a 40% increase in exports of
completely built-up cars to 42,000 units this year, up from
30,000 units in 2005. Last year, exports shot up 70% to 30,000
units but sales in the domestic market shrank 40.3% to 318,880
units, Dharmadi said.
PDC
to Invest $50m to Grow Corn, Coffee
Singapore’s PDC Corp expects to invest about $50 million to set
up corn and coffee plantations in North Sumatra. The investment
will be disbursed over 18 months, beginning the second quarter
of the current financial year.
The investment will be funded by bank borrowings, estimated by
PDC International director Desmond Ng to be 70% of the total
amount, and the rest through equity fund-raising, Business
Times reported on Tuesday (16/1/07).
PDC International, a subsidiary of PDC, signed a cooperation
agreement in November to develop 40,000 hectares of land with
the government of Toba Samosir regency.
PDC also announced that it has signed a memorandum of
understanding with Super Coffeemix Manufacturing to cultivate
coffee plants on 20% of its plantation in Toba Samosir. Under
the agreement, Super Coffeemix will buy all coffee beans
produced to its specifications by PDC at a discount to the
prevailing commodity price.
STATE
CONCERNS
ASEAN
Prepares ‘Green Line’ Facility
The 10 members of the Association of Southeast Asian Nations (Asean)
are preparing a plan to facilitate the flow of goods in the
region to boost regional trade.
The facility, called the Green Line, will reduce operating
costs and save more time in shipping goods, Asean secretary
general Ong Keng Yong said Wednesday (17/1/07).
He said the shipment of goods in the region often undergo
examinations in a number of posts in border areas before
reaching the destination country.
Goods transported from Singapore to Vietnam by land have to
undergo checks at the border with Malaysia, the Malaysian-Thai
border, the Thai-Cambodian border and the Cambodian-Vietnamese
border before being unloaded in Vietnam, he said. It should be
sufficient to conduct examination only in the destination
country, he added.
He said Asean leaders have agreed to implement the Green Line
plan fully in 2008.
Indonesia will agree to implement the plan reciprocally, chief
economics minister Boediono was quoted as saying by Antara.
Govt.
Pledges to Aid Fishing Industry
The government has pledged to help revive the country’s sea
fishing industry by providing more cash collateral this year to
boost fishermen's access to bank loans.
Fisheries Minister Freddy Numberi said Monday (15/1/07) his
department would disburse Rp173 billion (about $19.2 million),
or double last year's total, in cash-collateral credit to more
than 5,000 traditional fishermen this year. The scheme will be
managed by state-owned lender Bank Rakyat Indonesia (BRI).
"We've found that BRI's non-performing loans for fishery are
less than 1%. This is positive. We will continue disbursing
loans to fishermen," Numberi was quoted as saying by
The Jakarta Post.
BRI director for small and medium enterprises, Sulaiman Arief
Arianto, said credit released to the sea fishing industry
accounted for only 1.6% of the bank's agriculture credit, which
made up 40% of its portfolio.
Bank Indonesia (BI) data show that loans to the agriculture
sector accounted for only 5% of national banking credit. Most
of the funds deposited in banks went to the industrial and trade
sectors, accounting for 23% and 20%, respectively.
Arianto said most fishermen are not accustomed to banking
requirements and few, if any, collateral companies are willing
to invest in the high-risk industry due to its dependence on
nature. "Most of them are not bankable but are actually quite
feasible," he said.
The bank itself is ready to extend loans of some Rp200 billion
to the sea fishing industry this year. With the new funds, the
government expects to focus on boosting the production of
shrimp, tuna and seaweed.
Last year, Indonesia exported 169,581 tons of shrimp worth
about $1 billion, an increase from 153,906 tons in 2005. It is
now the largest shrimp exporter to Japan and the second largest
to the US.
The total production of seaweed in 2005 reached 910,636 tons
and is expected to climb to 1 million tons in 2006. Indonesia
is the second largest seaweed exporter in the world after the
Philippines.
Meanwhile, about 30% of the tuna imported by Japan, which
consumes about 70% of the world's total tuna production, comes
from Indonesia.
"What a shame that the increase of revenue in the country's sea
and fishery sector did not bring a significant contribution to
the welfare of our fishermen," Numberi said.
SOEs
Garuda's
2006 Net Loss Narrows
Flag carrier PT Garuda Indonesia posted a narrower net loss last
year, due to reduced operating costs and improved efficiency,
its president director, Emirsyah Satar, said on Wednesday
(17/1/07).
Garuda posted a net loss of Rp298.3 billion ($32.88 million)
last year, compared to Rp688.5 billion a year earlier, Satar
said, adding that the number of Garuda's routes that had become
profitable had increased substantially.
"Overall, our domestic operation has improved significantly
from 2005 but our international (operation) has not recovered,"
he was quoted as saying by Reuters. He said a lower number of
travelers to Bali was a key factor.
Garuda's revenue fell 2% to Rp11.31 trillion due to the
appreciation of the rupiah during 2006, but in US dollar terms,
sales have risen 3.2%. For the January to November period, the
number of passengers travelling Garuda rose 5% year-on-year to
7.6 million. The company has not published full-year operational
figures.
Garuda finance director Alex Maneklaran meanwhile said the
company is allocating $20 million to cover the costs of
laying-off about 15% of its 5,600 workforce,
Bisnis Indonesia
reported. He said the layoffs are needed to enable the company
to purchase new aircraft.
The company also said it will sell four subsidiaries -- PT GMF
Aero Asia, PT Aerowisata, PT Abacus Distribution System and PT
Gapura Angkasa -- in April to enable it to concentrate on its
core business.
Garuda will maintain a stake in GMF Aero Asia, which deals with
aircraft maintenance and PT Aerowisata, a catering firm, as they
are considered part of the core business, Satar said, adding
that PT Abacus, a ticket reservation firm, and PT Gapura Angksa
are not part of the core business, and all or most of their
shares will be sold.
He said Garuda is awaiting the state minister for state
enterprises’ decision on the company’s plan to spin off its
low-fare unit, Citilink.
Semen
Gresik's 2006 Net Profit Seen Up 30%
State-owned PT Semen Gresik’s net profit last year rose 30% from
2005,
Bisnis Indonesia
reported Friday (19/1/07), quoting president director Dwi
Sutjipto.
Gresik’s revenue in 2006 reached Rp8.1 trillion ($890.8
million), surpassing its target of Rp8 trillion. "Our unaudited
financial report shows that revenue climbed 16% from the
year-ago period of Rp7.53 trillion and net profit rose by 30%,"
Sutjipto said.
Since Gresik posted a net profit of Rp1.02 trillion in 2005,
last year's net profit could reach Rp1.33 trillion.
Indonesia's cement consumption grew 1.8% to 32.1 million tons
in 2006, ahead of analysts’ expectation for flat to lower growth
in volume last year. Gresik's domestic sales volume grew 4.6%
to 14.94 million tons last year.
The company controlled 46.6% of the domestic market last year,
up from 45.4% in 2005.
PRIVATE
SECTOR
2006 Advertising Spending Up 17% - Nielsen
Corporate expenditure on advertising in 2006 rose 17% to Rp30
trillion, Nielsen Media Research said.
It noted that TV absorbed Rp20 trillion, or 67%, of the total
spending, with the remainder shared by newspapers, magazines,
radio and online media, XFN-Asia reported on Thursday (18/1/07).
Ananto Praktikno, executive director of Nielsen Media Research
Indonesia, said he expects corporate spending on advertising to
increase this year in line with the improving economy.
Manufacturing Seen Picking Up in 2007
Indonesia's manufacturing sector output is expected to grow a
faster 7.9% in 2007, helped by higher consumption and lower
interest rates, an Industry Department official said.
The government estimated manufacturing probably grew 5% in
2006, less than a 6% official forecast made at the start of last
year, partly due to weak domestic demand and high interest
rates. Manufacturing growth was 4.6% in 2005.
"We expect the manufacturing industry to grow around 7.9% this
year. The driver will come from private consumption, government
expenditure and the construction sector," the department’s
secretary general, Agus Tjahajana Wirakusumah, told Reuters on
Thursday (18/1/07).
"The benchmark interest rate (BI rate) is expected to fall. If
lending rates fall, it will also help business operations as
businesses depend on loans for their working capital and
investments," he said.
2006
Auto Sales Down 40%
Sales of new vehicles in Indonesia plunged 40% in 2006, figures
from the industry association showed Monday (15/1/07).
Auto sellers felt the pinch due to higher interest rates, which
were jacked up in 2005 in the wake of a spike in inflationary
pressure stemming from dramatic fuel price hikes. The government
also slashed subsidies on domestic fuel amid soaring global oil
prices, another deterrent for consumers buying cars.
Domestic car sales totaled 318,883 in 2006, down 40%, a report
by the Indonesian Automotive Industries Association showed,
according to Agence France-Presse. The figure was slightly
below the association's forecast of 320,000.
Vehicle sales appear to be on the road to recovery after the
49% fall recorded in the first half of 2006. The report noted
that in December alone, industry-wide sales totaled 31,166
vehicles, against 32,870 a year earlier.
Motorcycle sales were far more buoyant, falling only 12.16% to
4.47 million units in 2006 from 5.09 million units the previous
year, the Association of Motorcycle Producers (AISI) said.
The decline was the first in eight years. Sales crossed the 1
million level in 2001 and continued to scale up to new peaks and
reached an all-time peak of more than 5 million units in 2005.
BANKS
Robust Growth Forecast for Shariah Banks
The country’s shariah banks are forecast to record a 50%
increase in financing this year, Bank Syariah Mandiri director
Muhammad Haryoko said.
They are set to benefit from the decline in the central bank's
benchmark interest rate and a cut in interest rates on deposits
by conventional banks, Haryono said, according to Antara.
He said the condition this year is similar to those in 2003 and
2004 when shariah banks recorded robust growth following a
decline in interest rates.
Indonesia’s first Islamic bank, Bank Muamalat Indonesia, said it
will boost shariah financing this year, raising the ratio of its
financing to third party funds to 90%.
POWER
PLN
Signs 10 Power Purchase Deals
State-owned power firm, PT PLN, on Tuesday (16/1/07) signed 10
power purchase contracts with local companies, which will build
small power plants outside Java.
The combined electricity PLN will buy from these companies will
total 850 MW, PLN director Ali Herman Ibrahim was quoted as
saying by Dow Jones Newswires. "We expect the (planned power
plants) to start commercial operation in the next 30 months," he
said, without specifying the electricity generating capacity of
each independent power plant.
This year, PLN plans to buy a total of 500 MW in additional
electricity supply from independent power producers operating
power plants outside Java, such as in Sumatra, Kalimantan and
Sulawesi, he said.
PLN is inviting investors to build power plants across
Indonesia to help meet rising domestic demand for electricity,
especially on the main island of Java. However, these
independent power producers cannot supply electricity directly
to consumers. PLN will buy the electricity generated to sell to
its customers.
OIL
AND GAS
$21.04m
Worth of Contracts Signed
The government on Tuesday (16/1/07) signed 16 new
production-sharing contracts (PSC) for oil and gas exploration
valued at $21.04 million, Mines and Energy Minister Purnomo
Yusgiantoro said.
Of the amount, $25.45 million will be paid to the government as
"signature bonus" fees, while the rest will be spent on
geological surveys, the development of exploration wells and
other exploration-related activities over the next three years,
XFN-Asia reported.
The companies that were awarded the new contracts included the
ConocoPhilips (Kuma) Ltd-Statoil Indonesia consortium, which
will jointly develop the Kuma block located between Kalimantan
and Sulawesi. The oil contractor will get 35% if oil is found
in the Kuma block and 40% of gas, while the rest will go to the
government.
CNOOC also won a contract for the onshore Batanghari block in
central Sumatra. The oil contractor will get 20% of production
if oil is found and 40% of gas in Batanghari. "We will know
whether there is oil and gas in those areas after they conduct
exploration. However, our expectation is that they will do so,"
Yusgiantoro was quoted as saying by Reuters.
Premier Oil signed a contract for the onshore and offshore
Buton block in southeast Sulawesi. The contractor will get 25%
of oil production and 40% of gas.
Abu Dhabi's Aabar Petroleum Investments Co. said its
subsidiary, Pearl Energy, won two contracts. Pearl's wholly
owned subsidiary PearlOil (K) Ltd will operate the offshore
Karana oilfield, while its other subsidiary Pearl Oil
(Sandstone) Ltd will hold a 40% interest in the offshore Sibaru
concession area.
Trans
word Exploration Ltd was awarded a contract to explore the
Duyung block in Natuna Sea.
Yusgiantoro further said that Indonesia will offer 20 oil and
gas blocks next month to local and foreign companies via an open
bidding process, Dow Jones Newswires reported. Twelve of them
are new, while eight are "available blocks," he said, without
elaborating.
Chevron
to Invest in Offshore Gas Reserves
PT Chevron Pacific Indonesia said it will spend up to $1 billion
to develop offshore gas reserves in Sulawesi and East
Kalimantan.
About 35% of this year’s investment will be for the development
of its gas fields off East Kalimantan, company president Suwito
Anggoro said Wednesday (17/1/07).
Development of the gas fields have been delayed as the upstream
oil and gas regulator, BP Migas, asked Chevron to determine the
real capacity of the reserves, believed to be smaller than
earlier reported.
Chevron controls a number of gas fields in East Kalimantan
after its merger with Unocal in 2005 and is the third largest
gas producer after Total and Vico in East Kalimantan.
New
Pertamina Subsidiary for Gas Operations
State-owned PT Pertamina has formed a new gas subsidiary called
Petra Gas to handle all of its gas trading, processing,
distribution and transmission operations, a senior company
official said Wednesday (17/1/07).
"It manages all gas business, including pipeline construction,
gas processing for LNG terminals and production of LPG,"
Pertamina vice president, Iin Arifin Takhyan, said, according to
Platts Commodity News>.
Pertamina's existing gas pipelines in East Java, Sumatra and
Kalimantan will be part of the subsidiary, he said. The company
produced 944,000 Mcf/d of gas in 2006.
MINING
Bumi
Picks 6 Firms for Round 2 Bids
PT Bumi Resources said it has selected six of 13 firms
short-listed for the second round of bidding for 30% stakes in
coal-producing units PT Kaltim Prima Coal (KPC) and PT Arutmin
Indonesia, XFN-Asia reported on Wednesday (17/1/07).
The six will be entitled to conduct due diligence and site
visits before filing binding bids slated for early February,
Bumi finance director Eddie Soebari said in a statement to the
stock exchange. He said Bumi plans to name the winner in early
March.
The size of the offered stakes has been cut after Bumi
previously failed to sell its entire 95% holding in KPC and 100%
stake in Arutmin to PT Borneo Lumbung Energi for $3.2 billion.
Chinese
Firm to Mine Metals in S. Sulawesi
China's Tianjin Material and Equipment Group Corp will invest
Rp90 billion ($10 million) in South Sulawesi’s metal mining
sector, an executive said Tuesday (16/1/07).
The Chinese industrial business group will exploit ore, copper
and tin deposits in Tanah Toraja and Luwu districts this year in
cooperation with local firm PT Sangkaropi, the Chinese company's
general manager for imports and exports, Wang Gang, said,
according to Xinhua news agency.
South Sulawesi Governor Amin Syam said his administration would
speed up the issuance of an environmental impact analysis permit
and an investment recommendation to the company in a bid to
create jobs for the local people.
Wang Gang meanwhile asked the local administration to provide
the company with reliable infrastructure, Antara reported.
The governor also asked the Chinese investor to eye potential
natural resources, not only in Tanatoraja and Luwu, but also in
nearby Enrekang district which has abundant ore, copper and tin
deposits.
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