|
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
Trade and Investment News, 26 December 2006
Highlights
Politics
Regions
-
Former Aceh Monitoring Mission head says Aceh solution ‘soft
power’ at best
-
Bad weather, landslides slow
North
Sumatra earthquake relief
-
World Bank to fund post-earthquake, tsunami housing in Java
Economy
-
China to
boost investment in Indonesia, says official
-
Range of investment plans, Russian firm ready with $2 billion
-
Implementing regulations ready for new investment law, says
minister
-
World Bank praises reform process
Business
briefs
Macro
economy
Investment
State
concerns
-
World Bank to lend $600 million to back economic reform
process
-
Tender soon for major fiber-optic expansion
-
Germany
offers new debt swap
Private
sector
Banks
Power
Oil & gas
-
State income from sector expected to rise 18%
-
Third
train likely at Tangguh gas project
-
Total E&P Indonesia to invest $8 billion over eight years
POLITICS
Ba’asyir Decision ‘Process of Law’
The
Indonesian Foreign Ministry said in a statement issued on
Saturday (23/12/06) that Supreme Court decision to dismiss
charges on which Muslim cleric Abu Bakar Ba’asyir was jailed
represented the process of law. "The
legal proceedings against Abu Bakar Ba'asyir were conducted in
an independent, fair and transparent process as may be expected
in a democratic system," the statement said. The ministry urged
"all concerned to respect the Supreme Court's decision, which
was the result of due process of law." Earlier,
the Supreme Court said it had interviewed 30 witnesses and had
found no evidence to support the charge against Ba’asyir.
Ba’asyir
was sentenced to 30 months for conspiracy in the Bali 2002
bombing attacks, in which 202 people died. He was released
earlier this year after receiving remission.
Task
Force Guards Churches
More than
18,000 police and troops were deployed on Saturday (23/12/06)
to guard churches over Christmas and New Year.
Indonesian authorities said they had no reason to believe
terrorists are plotting attacks over the festive season.
"The security situation is good," State Intelligence Agency
(BIN) director Syamsir Siregar told the Associated Press. "But
we remain on alert."
Siregar said
there were "no signs" that attacks were being planned. "God
willing, Christmas and New Year will be safe," he said.
The country
has been relatively calm in recent months, and there has not
been a major attack since October 2005.
KPK
Turns Down Dahuri Request
Former
maritime and fisheries minister Rokhmin Dahuri's request for
temporary release on corruption charges has been turned down by
the Anti-Corruption Commission (KPK).
Supported by
Social Services Minister Bachtiar Chamsyah and dozens of
lawmakers, Dahuri's lawyers had twice asked the anti-graft body
to suspend his detention so that he can attend a conference
overseas.
But the KPK
was adamant. “"We reject Rokhmin's request for temporary
release. According to the investigators, they still need access
to Rokhmin in order to make the examination easier to conduct,”
KPK spokesman Johan Budi told
The Jakarta Post
on Monday (17/12/2006).
REGIONS
Win
for ‘Soft Power’ in Aceh: Feith
The head of
the former Aceh Monitoring Mission (AMM) says the peace
settlement there is an example of the "soft power" built around
trade and aid, the Associated Press reported.
In comments
on his return to Europe at the wind-up of the AMM, which had
monitored the peace in Aceh since the August 2005 Helsinki peace
deal, Pieter Feith said the economy was the greatest test
remaining for Aceh, but said quality coffee was one example
where output could be tripled.
"The focus
is not anymore on security but on economy," the veteran Dutch
peace monitor told reporters in Brussels,
saying the security situation was now stable.
Former
separatist rebel Irwandi Yusuf looks certain to become governor
after December 11 elections. Feith said Yusuf would need to
cooperate closely with Jakarta to
kick-start the economy.
"There is so
much money (from natural resources) coming in Aceh in the coming
years that it will need a strong administration to deal with
this," as well as to prevent corruption, he said, under rules
where Aceh would be allowed to keep 70% of the revenues from its
natural resources.
"This is
significant because whereas natural gas and oil reserves are
running down ... Aceh has significant resources in minerals, in
palm oil, in rubber and other agricultural products like
coffee," he said.
Rescuers
Reach Earthquake Zone
Rescuers
finally broke through to areas crippled by an earthquake on
Monday (18/12/06) in a remote, mountainous area of North Sumatra
province.
Many roads
were destroyed or blocked by landslides and bad weather
contributed to delays in reaching victims of the quake.
The quake,
which struck in the early hours of the morning, killed four
people, damaged or destroyed more than 800 houses and displaced
more than 6,000 people.
According
to data from a joint NGO disaster response post in the area, at
least 2,000 children living in 24 shelters are sick and in need
of aid.
The
earthquake incidentally proved that a system of warning sirens
installed in Padang,
the capital of West Sumatra, work well.
One
official complained to the Padang Mayor that the siren was too
loud, Antara reported.
The system was inaugurated by President Susilo Bambang Yudhoyono
several hours after the North
Sumatra quake.
World
Bank to Fund Java Quake Reconstruction
A project to
build 21,500 permanent houses and 24,500 temporary shelters for
victims of the Java earthquake and tsunami was launched
Wednesday, the World Bank said.
Some 6,000
people were killed and 300,000 homes destroyed or seriously
damaged in the May 27 quake which hit Yogyakarta
and its surrounding area. More than 600 were killed in the July
tsunami which hit the southern coast of Java, Agence
France-Presse reported.
The $66
million housing project was launched by the Java Reconstruction
Fund, which brings together the EU, Britain, Canada, Denmark,
Finland and the Netherlands, said the World Bank, which
administers the fund.
"The people
of Yogya are known for their skill and enterprise and giving
them housing support will also help them regain their
livelihoods, many of which are home-based. It's the quickest way
to help rebuild their lives and repair the economy," said Andrew
Steer, the World Bank's country director for Indonesia.
Bamboo
transitional shelters are being built by the International
Organization for Migration and will eventually be dismantled and
recycled into permanent housing.
IOM said the
shelters were being pre-fabricated near the quake epicentre and
then erected by IOM staff, construction workers, students and
the quake survivors themselves.
"Prefabrication has proven to be a highly successful strategy to
bring immediate and safe shelter relief to thousands of people
who were still living in tents," said the IOM's Jules Korsten.
Bird
Flu Cases Down: Minister
The minister
of health says there is a noticeable fall in the number of bird
flu cases, but other officials warned that it was too early to
form a trend.
Health
Minister Siti Fadillah said the lower number of infections over
the past three months was due to a more forceful vaccination and
culling policy. She also cited an ongoing public education
campaign.
"The drop in cases is because of the success of the government
... which is now unified and moving quickly," she said Thursday
(21/12/06). "If the birds are free of the virus, so are humans."
"I thank God
that the cases are going down, but we cannot celebrate yet,"
said Nyoman Kandun, Director General of Communicable Disease
Control at the health ministry, adding it would take at least
three more months of declining cases to start believing it may
be permanent.
Kandun also
said most suspected cases now turn out to be negative, meaning
the country's surveillance system is working effectively.
David Navarro, the United Nation's coordinator for avian and
pandemic influenza, recently praised Indonesia's government for
boosting its campaign against the virus.
ECONOMY
China
Leads Investment Interest
A Chinese
official has said his government intends to increase investment
in Indonesia, particularly in the power and resources sectors,
as a number of other investment deals were taking shape.
The reports
provided an optimistic note to the end of a year in which
investment realizations have been sharply down on 2005 levels,
and well off pre-crisis levels.
Zhao Guobao,
vice chairman of the Chinese National Development and Reform
Commission (NDRC), made the promise of more investment after a
meeting with Energy and Mineral Resources Minister Purnomo
Yusgiantoro on Friday (22/12/06).
Indonesian
sources said China
had been offered the chance to take part in a crash program to
build a total of 10,000 MW in new power capacity.
In other
investment news, Korean electronics manufacturer LG Electronic
announced that it was making Indonesia
a regional production base for four types of products, while
China’s Geely and Cherry automotive groups both said they would
set up shop in Indonesia.
Russia’s
Alfa Group said it was willing to spend up to $2 billion on an
entry into the telecommunications market.
A
local company, PT Lamicitra Nusantara, said it is preparing to
build a $1.44 billion industrial seaport city in Madura. Its
plan recognizes overcrowding at Surabaya’s
Tanjung Perak port and the opportunities for growth on the
island once a bridge to the provincial capital is completed.
Hopes of
stronger investment interest in the coming year were driven by
Trade Minister Mari Pangestu, who told a briefing for embassies,
multinational institutions and business groups that implementing
regulations had already been framed ready to put into action
when the investment law is completed early next year.
Strongly
positive comment came from the World Bank, which said it had
approved a loan package of $600 million to support reforms.
"Indonesia
has shown strong commitment to restoring sound economic
fundamentals," said Andrew Steer, the bank's country director
for Indonesia.
World Bank
economist William Wallace said the reforms had already produced
results. "Growth is accelerating, the financial sector is
diversifying, red tape that impedes businesses is being cut,
credit ratings are improving and infrastructure projects are
getting underway," Wallace said.
On the
macroeconomic front, Bank Indonesia said the US dollar might
sink to below the Rp9,000 to the US dollar mark during the
coming year, based on the country’s improving fundamentals.
"The rupiah
is affected by our fundamental (macroeconomic) factors so the
better our fundamentals, the better the rupiah," deputy governor
Aslim Tadjuddin said
Tadjuddin
said the central bank doesn't want the rupiah to
"over-strengthen" because it would undermine the competitiveness
of exports, without elaborating on possible central bank
intervention to stall the rupiah's rise.
Governor
Burhanuddin Abdullah brushed off the effect of concern over
regional economies following Thailand’s shock introduction – and
almost immediate retraction - of capital controls. The rupiah
ended the week at Rp9,077 to the greenback.
BUSINESS
BRIEFS
MACRO ECONOMY
Current
Account Surplus Around $6-8 bn: BI
Bank
Indonesia (BI) has projected a surplus in the country's 2007
current account of $6-8 billion, which represents an increase of
1.5% to 1.9% of the gross domestic product (GDP).
Governor
Burhanuddin Abdullah told a briefing for embassies and business
groups that improved export performance in tandem with a rise in
imports because of increasing domestic demand had contributed to
the surplus.
He said in
2007 BI sees 6.2% economic growth with inflation of about 6.3%,
the rupiah exchange rate at Rp9,200 to Rp9,600 against the
dollar, and an interest rate of 8.50% for the banks certificates
(SBI).
INVESTMENT
Russia's
Alfa May Invest $2bn
One of
Russia's largest privately owned holding companies, the Alfa
Group, announced Wednesday (20/12/06) it plans spend up to $2
billion in Indonesia's mobile telecommunications industry,
The
Jakarta Post
reported.
The company
will make the investments through a subsidiary, Altimo, whose
vice president, Kirill Babaev, told reporters the company wanted
to be a player in the cellular market, one of the most
prospective in the sector in the world.
Company
chiefs met with President Susilo Bambang Yudhoyono in Moscow
earlier this month.
"We are
targeting some kind of stake in one of the larger mobile
operators here. Certainly, some time will pass before we start
our actual project, but we are ready to invest up to $2 billion
in the country's telecoms industry," Babaev said.
"It's not
settled yet, but we will do what is best for us. We don't have a
deadline. So we are basically looking for a good opportunity,"
he explained.
Altimo is a
strategic investment company that focuses on telecommunications,
and which owns stakes in major cellular operators in Eastern
Europe and Turkey with a total subscriber base of 130 million
globally.
Indonesia
Named Regional Base for LG
South Korean
electronics producer LG Electronics Corporation is planning to
make Indonesia a base for production of four types of domestic
appliances for the Asian and Australian markets, Antara
reported.
"We are
planning to make Indonesia a base for the production of LCD
televisions, plasma televisions, refrigerators and audio-video
products for the Asian and Australian markets," PT LG
Electronics Indonesia (LGEIN) General Manager Budi Setiawan said
Tuesday (19/12/06).
The company will next year relocate its two-door refrigerator
plant from South Korea
to
Indonesia,
he said. Last year, the company shifted its air-conditioner
plant to Indonesia from Thailand.
Once the
relocation had been completed, the production base would have
the capacity to produce 1.6 million LCD, flat and plasma screen
televisions and 1.8 million refrigerators.
Setiwan
noted that there was an opportunity for Indonesian firms to
develop the ability to supply components, which for the time
being would need to be mainly imported. He declined to state how
much investment the expansion would require.
Cement
Expansion Planned
The
Association of Cement Producers (ASI) says 10 new cement plants
are to be built or existing ones expanded as demand continues to
increase.
ASI said
total investment in the new projects amounted to around Rp4.97
trillion ($547.4 million).
Agro
Industry Director General at the Department of Industry, Benny
Wahyudi, said five of the ten companies were PT Kobexindo
Cement, PT Boral Indonesia, PT Semen Jawa, PT Semen Puger Jaya
Raya and PT Karya Semen Tuban.
Geely
to Set Up Auto Base
Geely
Holding Group, the parent of Hong Kong-listed Geely Automobile
Holdings, said it would boost its exports to Southeast
Asia by establishing a base in Indonesia with an annual
production capacity of 30,000 units, the South China Morning
Post reported.
"We only
need one production base for the Southeast
Asia market,” said executive director Lawrence Ang Siulun. "The
Indonesian government is open to the proportion of
[foreign-make] cars that can be sold in its domestic market."
Geely, the
largest privately owned carmaker in China, has
always wanted to boost its export business. Chairman Li Shufu
said early this year he was confident Geely would reach annual
sales of 100,000 cars in the US market with vehicles priced at
about $10,000.
Earlier, China’s
Chery Automobile has also announced that it is making its first
step into overseas markets with the launch of the QQ sedan in
Indonesia.
Mitsubishi
Cable to Double Output
Japanese
electric wire and cable producer Mitsubishi Cable Industries Ltd
will more than double its car wire harness output in Indonesia,
Japanese News Digest reported.
The
company's Indonesian subsidiary has already invested $9.3
million in acquiring a plant and its adjacent land. With the
opening, to start operation in January 2007, the subsidiary will
nearly double its workforce to 1,560 in 2008.
Charoen
to Buy Packaging Shares
PT Charoen
Pokphand Indonesia will purchase 99.99% of shares of PT Poly
Packaging Industry for Rp11.72 billion ($1.3 million) from two
main shareholders, PT Prospek Karyatama and Noble Bright Trading
Ltd, a spokesman said.
CPIN decided
to make the share purchases in order to be able to increase its
focus on the agri business sector.
PT Poly
Packaging Industry, located in Tangerang, produces plastic bags
for cattle feed.
Chandra
Asri to Expand Cracker
The Chandra
Asri Petrochemical Center (CAPC) plans to expand its naphtha
cracker in Anyer, Banten province, in the third quarter of next
year and lift its annual ethylene and propylene capacities by
50,000-60,000 metric tons and 60,000-70,000 metric tons
respectively, a company official said, according to Platts
Commodity News.
The company
is currently building a new furnace, which will be ready for use
by the third quarter of 2007.
STATE CONCERNS
World
Bank Loan for Reform Program
The World
Bank has approved a loan package of $600 million to support
Indonesian reforms, which it said were already bearing fruit.
The assistance comprises a $530 million loan and a concessional
credit of $70 million, it said Wednesday in a statement, Agence
France-Presse reported.
"Indonesia
has shown strong commitment to restoring sound economic
fundamentals," said Andrew Steer, the bank's country director
for Indonesia.
"The
challenge now is to encourage investment that will spur growth
and create jobs to ensure the needs of the most vulnerable are
being adequately addressed," he said.
The World
Bank development program assistance is intended to help the
government deepen reforms in macroeconomic stability and
creditworthiness, public financial management and governance,
the investment climate, and services for the poor.
World Bank
economist William Wallace said the reforms had already produced
results. "Growth is accelerating, the financial sector is
diversifying, red tape that impedes businesses is being cut,
credit ratings are improving and infrastructure projects are
getting underway," Wallace said.
Tender
for Fiber-Optic Expansion
The
government will hold a tender in March in a bid to expand its
fiber-optic cable network in a bid to strengthen its
telecommunications sector, a communications department official
said on Tuesday, according to Reuters.
Basuki
Iskandar, Director General of Telecommunicatons, said Indonesia
has a fiber-optic network of around 70,000-km, far smaller than
regional neighbour Malaysia, of far smaller size and population.
"We will
launch the open tender in March next year," Iskandar told
reporters. He declined to comment on the investment needed or
the size of the network.
Germany
Offers Debt Swap
Germany has
offered to cut Indonesia's debt by 20 million euros ($26.15
million) on the condition the Southeast Asian country invests
funds on rebuilding schools hit by earthquakes, a joint
statement said on Monday, Reuters reported.
The
government owed around $3.8 billion to Germany at
the end of last year, out of the country's around $65 billion
public foreign debt, government data showed.
Under the
latest debt swap offer, Indonesia
will be able to cut its debt to Germany by 20 million euros if
it allocates 10 million euros, or half of the debt amount, to
improve education in areas hit by earthquakes.
The latest
swap offer will bring total debt swapped by Germany to
Indonesia to around 100 million euros.
Govt.
to Speed Up Rubber Replanting
The
government will speed up revitalization of rubber plantations to
boost productivity in 16 provinces by replacing rubber trees
aged more than 25 years, Antara reported.
Replanting
will start in 2007 to cover 89,000 hectares, Plantation Director
General Ahmad Manggabarani said.
In the
period 2007-2010, the government targets to complete replanting
over 250,000 hectares of rubber plantations, he said.
PRIVATE SECTOR
Stock
Exchange Capitalization Jumps
Market
capitalization of the Jakarta Stock Exchange (JSX) reached
Rp1,212 trillion in the third week of December, an increase of
51.26% from Rp801 trillion at the same time last year as
confidence returns,
Bisnis
Indonesia
reported.
The total
issuance of new stock was Rp283 trillion while bonds issuances
stood at Rp97 trillion.
As of June 2006, there were 301 pension funds with the total
assets of Rp66.9 trillion, while the assets of financial service
and venture capital were Rp97.55 trillion and Rp2.3 trillion
respectively.
The chairman
of the Capital Market and Financial Institution Supervisory
Board (Bapepam-LK), A. Fuad
Rahmany
meanwhile said investors have been increasingly confident.
"The index
has shown what will happen in the future. As the economy
recovers, the capital market will also recover," he said.
Rahmany was
speaking after signing an agreement with the Corruption
Eradication Commission (KPK), which will assist Bapepam to
strengthen the control over the stock market and improve the
implementation of good corporate governance and compliance of
listed companies.
Meanwhile,
JSX president Erry
Firmansyah in an interview with
Bisnis
Indonesia
claimed the JSX was the world's third best performing bourse
after Russia and
China this year.
Iran
Air to Fly to Jakarta
Iranian flag
carrier Iran Air plans to provide direct flights to Jakarta via
Kuala
Lumpur
and expects to increase the number of Iranian visitors to Indonesia,
Antara reported.
The airline
is expected to start flying the route next year, Iranian
Ambassador Behrooz Kamalvandi said Monday (18/12/06).
Kamalvandi
said the Indonesian transport ministry has in principle approved
the plan, but approval is still needed from the Iranian
parliament.
Iran and
Indonesia have signed aviation agreement allowing their flag
carriers to serve direct flights between the two countries.
Daihatsu
Takes 2nd Place in Auto Market
A 74.1%
surge in sales to 4,614 units has put Daihatsu second in terms
of car market
share in the country, relegating Suzuki to third place in
November, Antara reported.
Suzuki
recorded only a 34.3% rise in sales to 4,601 units in November.
Mitsubishi remained in third place, with sales rising to 4,587
units, followed by Honda, with sales rising to 3,204 units.
Toyota was
unchallenged at the top, with sales increasing to 12,68 units,
up from 8,210.
BANKS
Loan Growth Slow
Bank
Indonesia (BI) has revised the 2006 loan growth target once
again, predicting that loan growth this year will reach between
11% and 13% in 2006.
“It is hard
to meet the target of 13-15%. We think that 11% will be
realistic enough,” said Muliaman D. Hadad, BI director of
banking Research and management on Wednesday
20/12/06),
Tempo Interactive reported.
Budi Mulia,
BI director of strategic planning, said that up until mid
December, loan disbursement reached Rp758 trillion.
$2.8
bn in Loans for Bio-fuel
Five
Indonesian state-owned and regional banks have been tasked to
lend $2.8 billion next year to help develop bio-fuel projects
and revitalize the country's plantation sector, Dow Jones
Newswires reported.
PT Bank
Mandiri, the nation's largest bank by assets, PT Bank Rakyat
Indonesia, the fourth-largest lender, PT Bank Bukopin, and two
regional banks, PT Bank Pembangunan Daerah Sumut and PT Bank
Pembangunan Daerah Sumbar, on Wednesday signed an agreement with
the government to offer loans to farmers and businessmen
interested in developing bio-fuel projects.
Finance
Minister Sri Mulyani
Indrawati
said the projects could increase the banks' ratio of loans to
deposits next year.
"The
Indonesian banks have so far been conservative in lending. I
hope that the bio-fuel projects will improve the banks' lending
performance," she added.
Indrawati
said the government will provide as much as Rp1 trillion to help
cover the interest cost that the farmers and businessmen need to
pay to the banks.
She said the
maximum interest rate for the loans is set at 10% and half of
the interest cost will be subsidized by the government.
The loans
will also be used to revitalize the plantation sector to ensure
the supply of commodities for bio-fuel purposes, she said.
Banking
Industry Profit Forecast at $4.44 bn
Bankers have
expressed optimism that the banking industry will post Rp40
trillion ($4.44 billion) in net profit this year or an increase
of 28% from last year, Antara reported.
A report
issued by Bank Indonesia said that in the first 10 months of
this year the country's 135 banks posted Rp32.63 trillion in net
profit, up 15.19% from a year before.
Normally
banks will earn larger profit in the last quarter, Tony
Prasetiantono, chief economist of PT Bank BNI, said.
Net interest
margins (NIM) of Indonesian banks are relatively high exceeding
6% this year, a banker said, adding, the country's second
largest lender in asset state-owned Bank Rakyat Indonesia
maintained a high NIM of 11%.
POWER
Shanghai
Electric to Invest in 2 Plants
Shanghai
Electric Group, China's
largest power equipment group, will build two coal-fired power
plants in Indonesia with a local partner, state press reported
Tuesday, according to Agence France-Presse reported.
State-run
Shanghai Electric and PT Truba Alam Manunggal Engineering have
signed an arrangement for the construction of two plants, one of
250 MW and another of 50 MW, the Shanghai Securities News
said.
According
to the preliminary agreement the two groups will jointly invest
$260 million in Sumatra,
the newspaper said, citing an announcement by Truba Alam.
Arifin
Wiguna, the president of the Indonesian company, said each would
contribute 30% of the investment, while the remaining 40% will
be financed through bank loans.
Shanghai
Electric Group declined to confirm the deal, the report said.
Tenders
Open for Small Plants
State power
utility PT PLN has called for bids to build 25 coal-fired steam
power plants as part of a program aimed at fast tracking
additional power supply, XFN-ASIA reported.
Under the
plan PLN is seeking to bring on-stream new electricity capacity
of 10,000 MW.
PLN said it
has invited bids for four plants with net output of 100-150 MW
for each generator; four plants with two 50 MW generators for
each plant; and 17 smaller plants with net output ranging from
14 MW to 50 MW for each plant.
OIL & GAS
Rise
in Sector Income Predicted
State income
from the oil and gas sector has been tipped to rise 17.17% to
$22.563 billion in 2006 from last year, Antara reported.
Oil price
hikes contributed to the increase in income, head of the
Upstream Oil and Gas Regulatory Body (BP) Migas) Kardaya Warnika
said.
Oil income
made up $14.64 billion of the total income and gas accounted for
the rest, Warnika said.
He said in
2006, around $7.34 billion was invested in 38 new oil fields. Of
these, 22 with a total reserve of 8.7 billion of oil and
condensate, are ready to operate.
Third
Train Considered for Tangguh
The
BP-operated Tangguh liquefied natural gas project in Papua looks
set for expansion even though the facility does not come into
operation for another two years, according to Upstream.
"The Tangguh
partners are already studying the feasibility of a third train
and are keen to move into the engineering stage although first
they need to reach agreement with BP Migas about where the LNG
will be marketed and sold", an industry source said.
The $6
billion Tangguh project is to begin operations with two 3.8
million ton-per-annum trains, the first of which is due for
start-up in late 2008, with the second identical train following
in 2009.
Having a
third liquefaction train at Tangguh operational early in the
next decade would benefit Indonesia by allowing the country to
negotiate new LNG sales deals with "reliable and high-paying"
Japanese and South Korean customers, Upstream was told.
Potential
customers for Tangguh Train 3 are understood to include some of
Arun and Bontang's existing North Asian buyers, which have
long-term contracts due to expire in 2010 and 2011.
Total to
Invest $8bn Over 8 Years
PT Total E&P
Indonesie is planning to invest around $8 billion from 2007 to
2015 to maintain current levels of gas output from the Mahakam
Block in East
Kalimantan,
company spokesperson Ananda Idris said, according to XFN-ASIA.
'It will be
good enough if we are able to maintain our output at the current
level in coming years given that gas firms are generally
experiencing depleting production,' Idris said.
The company
will focus on developing three fields in Mahakam Block -- Tunu,
Peciko and Sisinubi.
Total may
earmark $1.6 billion of the sum for capital expenditure next
year in order to keep output at the present level of 2.6 billion
cubic feet a day through next year.
More PGN
Shares to be Sold
The
government said Tuesday (19/12/06)
it plans to sell an additional stake of up to 5.36% in gas
distributor PT Gas Negara (PGN) next year in an effort to help
cover its budget deficit, Dow Jones Newswires reported.
"We plan to
sell it next year as part of the government's privatization
program," Minister of State-owned Affairs Sugiharto told
reporters.
After the
stake sale, the government will own 51% of Gas Negara, he said.
The
government earlier sold a 5.31% stake in PGN at Rp11,300 a
share, raising Rp2.1 trillion.
Meanwhile
PGN said it is planning to establish a subsidiary next year
which will engage in the fiber optic business using the
company's pipeline network, Koran Tempo reported, citing
a company official.
Djoko
Pramono, PGN's finance director, was quoted as saying that the
company has sent a letter to the Ministry of Communication and
Information to seek approval.
Govt.
Signs 7 Gas Supply Deals
The
government has signed seven new and amended agreements with
three companies to supply a total of 545.22 trillion British
thermal units of natural gas to power plants and industries on
Java, the official upstream oil and gas regulator BP Migas said
Tuesday (19/12/06).
The
contracted suppliers include state-owned Pertamina, PT Energi
Mega Persada unit PT Lapindo Brantas and Korea’s
Kodeco Energy Co. Ltd., a BP Migas statement said.
New
US Lease for Medco
PT Medco
Energi Internasional said its subsidiary MedcoEnergi US LLC has
purchased an additional exploration lease in the Gulf of
Mexico from Centaurus Gulf of
Mexico, LLC, XFN-ASIA reported.
The lease, in the Brazos Area Block 437, covers 5,760 acres. It
runs for five years during which time Medco is expected to
establish the commercial viability of the site and determine the
life of production. It is the fourth block purchased by
MedcoEnergi US in the Brazos Area.
Direct
Offer to Malaysia's Ranhill
Ranhill Bhd
said its unit Ranhill Jambi Inc Pte Ltd has gained a direct
offer from upstream regulator BP Migas to explore a new oil
block at the Batu Gajah production-sharing contract in Jambi,
XFN-ASIA reported.
In a filing
to
Bursa
Malaysia, the company said the Jambi Batu Gajah project has a
potential prospective resource of 195 million barrels of fuel
oil equivalent.
Meanwhile
Serica Energy said Thursday it has been awarded the Kutai
production-sharing
contract, which covers an area, both onshore and offshore, of
approximately 4729 sq km within the prolific Kutai Basin of East
Kalimantan.
Serica is
the operator of the PSC and will hold a 52.5% interest in the
block. Serica's partner, PT Ephindo, will hold the remaining
47.5% interest.
The PSC
contains several previously drilled wells that successfully
established the presence of hydrocarbons, Serica said in a
statement.
Husky
to Invest More
Husky Energy
has said it will boost its 2007 capital expenditure program by
12% to $2.77 billion to support activities in Canada, China and
Indonesia, Upstream reported.
The
Calgary-based company plans to to spend C$60 million to advance
the development of the Madura BD natural gas field off East Java
and a 3D seismic programme over the East Bawean II block.
McDermott
Close to Belut Deal
US
contractor J Ray McDermott is on the threshold of a major
construction and installation contract for ConocoPhillips' North
Belut
gas project in Indonesia,
Upstream reported.
No other
companies made commercial bids for the North Belut
central processing platform, which will have a 14,000-ton
integrated deck.
Sources said
the platform was too big for McDermott's two main rivals SMOE
and Nippon Steel that, like McDermott, have offshore yards in
Indonesia.
PT McDermott
Indonesia
and ConocoPhillips are expected to finalise the terms and
conditions of an engineering, procurement, installation and
construction contract worth several hundred million dollars in
the very near term, according to sources.
North
Belut is a major field development in Natuna Sea Block B. The
block is expected to come on stream in 2009 after the nearby Hiu
and Kerisi blocks, both of which are scheduled to come on stream
next year.
ConocoPhillips
has a 40% working interest in the block B production sharing
contract, where it is partnered by Inpex (35%) and Chevron
(25%).
Gas from
block B is sold under two long-term contracts to SembGas in
Singapore and Petronas in Malaysia.
PGN
Signs Gas Deal with Korea
Gas
distributor PT PGN has signed a deal to buy gas supplied from a
field operated by Kodeco Energy of South Korea, a senior PGN
official said on Tuesday (19/12/06), Reuters reported.
PGN will buy
between 20 to 30 million cubic feet per day of natural gas from
Kodeco's gas field in offshore East Java
for six years starting immediately.
"Kodeco has
already been supplying gas to PGN from the middle of this year
but a very small amount," PGN's president director, Sutikno,
told reporters.
"With this
contract Kodeco will ensure gas supply to PGN. PGN will
distribute the gas to industry customers in East Java,"
Sutikno said, adding the contract would boost revenue at PGN.
IHI,
Sojitz in Coal Gas Deal
Ishikawajima-Harima Heavy Industries Co. will join forces with
trading house Sojitz Corp. to launch gas production in Indonesia,
using less expensive, low-grade
coal, Nihon Keizai Shimbun reported.
The two
companies will build refineries on Java and Sumatra that
are capable of processing brown coal to produce gas comparable
in quality to natural gas. The total investment is estimated to
exceed 100 billion yen.
In addition,
the two firms will by 2013 construct one of the world's largest
brown coal gas plants in southern Sumatra
that can process 10,000 tons of coal a day. Gas will be supplied
via pipelines to meet demand in Java.
Sinar
Mas to Build Bio-diesel Plant
Sinar Mas
Group, through its subsidiary PT Nabati Energi Mas, plans to
construct a bio-diesel plant next year with capacity of 400,000
tons per annum, Investor Daily reported, citing a company
official.
PT Nabati
Energi's chief commissioner Danny Jozal, who is also chairman of
Sinar Mas Group's renewable energy division, said the plant will
be built in Dumai, Riau province, with a total investment of $35
million.
The plant
will use crude palm oil as its raw material.
Vico
to Boost Gas Output
Vico Indonesia, a
company owned by BP and Eni, will boost its natural gas
production in Indonesia by 2008 after a recent decline,
president Chris Phillips told reporters on Thursday (21/12/06),
Reuters reported.
The company,
which operates the Sanga Sanga block in East
Kalimantan, will also increase its capital investment to $300
million in 2008 from $190 million in 2007, he said.
MINING
Gresik
Smelter Restarts
Mitsubishi
Materials Corp. has resumed operations at its Gresik copper
smelter in East Java after problems with oxygen supplies to the
plant halted work there on October 6, the company said on
Thursday (21/12/06), Reuters reported.
Mitsubishi
Materials owns 60.5% of the operator of the facility, PT
Smelting.
The company
said on October 17 that the suspension, which the company at
that time expected to last until mid-December, would reduce
copper output at PT Smelting by about 52,000 tonnes and slash
recurring profits at the smelter by about $42.3 million.
Kalimantan
Gold in Deal with Oxiana
Kalimantan
Gold Corporation Limited said Monday (18/12/06)
that it has finalized its option deed with Australian copper and
gold mining company, Oxiana Ltd.
Previously
announced as a Heads of Agreement in October, the option deed
grants Oxiana an option to earn up to a total interest of 66.67%
in the KSK contract of work.
The
agreement is designed to advance exploration at Kalimantan's
copper
gold prospects in Central
Kalimantan,
which both parties agree has the potential to produce a world
class deposit.
The option
covers three key prospects, Baroi, Beruang and Mansur, which
form part of KGC's 941 square kilometre holding in Central
Kalimantan.
Under the
agreement, Oxiana will initially spend $2.5 million to include
the drilling of 12 deep holes over a period of 12-18 months.
If
it elects to proceed, Oxiana will then have the option of
earning a 40% stake by the completion of a pre-feasibility study
and a 66.67% stake by the completion of a bankable feasibility
study, by which time it will have spent an estimated $37.5
million.
--0--
|
