THE
COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
Tel: (021) 351-1178 Fax: (021)
351-1186 Website: http://www.ekon.go.id
Trade and
Investment News[1], 24 August 2009
Highlights
National
·
Air
Force pilots to aid Garuda expansion program
Politics
·
General
Election Commission to award parliamentary seats
Terrorism
·
President
supports Armed Forces counter-terrorism role
Security
·
Firearm,
ammunition seized at alleged separatist HQ in Papua
Law & order
·
Former
health minister arrested by Corruption Eradication Commission
Health
·
Rises
in diabetes cases puts new weight on strained health system
Economy
·
Fourteen
major banks agree to immediate interest rate cut
·
Mitsubishi,
Samsung, consider major investments
Business briefs
Macroeconomy
·
Economic
growth targeted at 5% in 2010, says minister
·
Inflation
likely to stay low in August, says statistics chief
Investment
·
Port
manager Pelindo I in $500 million public-private expansion deal
State concerns
·
Tourism
to provide $7.8 billion in foreign exchange in 2010
SOEs
·
PT
Semen Gresik begins construction at new Tuban cement plant
Private sector
·
Sales
of electronics goods jump 11% in July
Power
·
New
electricity bill allows regional government to license power plants
Oil & gas
·
Cost
recovery budget to rise on higher output, says ministry
Mining
·
PT
Aneka Tambang presses for role in Newmont divestment
NATIONAL
Air Force pilots to fly Garuda jets
The nation’s largest carrier, PT Garuda
The European Union in July lifted a two-year-old ban on
Garuda and three other Indonesian airlines after “significant improvements”
were made to safety standards.
Shortly afterward, Garuda outlined an aggressive expansion
plan dubbed “Quantum Leap” that would more than double the size of its fleet
over the next five years, from 56 planes to 116, some funded with a loan from
the
“We need at least another 100 pilots to fly our aircraft,”
said Garuda’s president director, Emirsyah Satar.
Under the Memorandum of Understanding signed on Friday, the
Air Force will provide pilots “on loan”, as well as provide training for
Garuda’s pilots and aviation engineers.
However, the agreement is still in its infancy and many
details have yet to be finalized, including restrictions on military employees,
who are not currently allowed to work in civilian positions, said Satar.
“We are ready to help Garuda and we’re currently waiting for
the regulation to be issued by the Defense Ministry,” said Air Force Chief Air
Marshal Subandrio.
POLITICS
KPU to follow
After weeks of confusion, the General Election Commission
(KPU) decided on a method of allocating legislative seats based on the results
of the April 9 elections, with the winners expected to be announced on Monday, The
The KPU decided on Friday to implement a
KPU Chairman Abdul Hafiz Anshary said the decision was
reached after consulting with Constitutional Court Judge Abdul Mukthie Fajar.
The KPU’s decision also means that the announcement of who
would take their oaths as new members of the House of Representatives in
October was postponed a second time. It was originally scheduled for last
Tuesday, and again for Friday.
“The most important thing is that we have tried to correctly
implement the ruling of the
Members of the KPU had been split over which candidates
would be allocated seats in the third phase of vote counting.
Some KPU officials backed candidates who ran in the district
where their party gained the most seats while others wanted the candidate with
the most votes in the province to be allocated the seat.
Hadar Gumay, chairman of the
“Fifteen candidates will lose their seats and be replaced by
other candidates,” he said.
KPU member Andi Nurpati said that there would also be
another announcement concerning results for areas where court-ordered re-polls
or vote re-capitulations had occurred.
DPD calls for constitutional amendments
The Regional Representatives Council (DPD) is demanding a
fifth amendment to the Constitution to give equal authority for the council in
guarding the country’s democratic system, The
The DPD has been struggling for years for a stronger legal
basis putting it on an equal footing with the House of Representatives (DPR).
“The DPD supports efforts for the fifth amendment, which is
expected to finalize several unsolved issues,” said DPD speaker Ginandjar
Kartasasmita, a former New Order stalwart and Golkar heavyweight.
The DPD so far can only propose its initiatives to the DPR,
but it is not allowed to join the decision-making process.
Kartasasmita said that he hoped the DPR and DPD could “join
hands” in the future.
President Susilo Bambang Yudhoyono said last week that the
Constitution should not be frequently amended.
TERRORISM
TNI counter-terror role not a worry: SBY
President Susilo Bambang Yudhoyono hit back at critics of
his decision to give the Armed Forces (TNI) an increased role in fighting
terrorism, saying the move was not counter to the country’s principles of
democracy, The
Although the National Police by law have primary
responsibility for counter-terrorism operations, Yudhoyono said the 2004 Armed
Forces Law stipulated that the military could also take part.
Yudhoyono said in peacetime, the TNI was required to fight
separatist movements, armed rebellions and terrorism.
He said that while the National Police would still head
counter-terrorism efforts, the TNI needed to be involved to handle certain
unique challenges posed by the evolving threat.
Following suicide bombings at the JW Marriott and
Ritz-Carlton hotels in
The TNI has also announced plans to establish
counter-terrorism desks at all of its regional command centers.
On Thursday, National Police chief Gen. Bambang Hendarso
Danuri said a major joint anti-terrorism drill will be held in October,
reported Detikcom.
In the last joint-terrorism drill in
W. Java: Alleged terrorist safe house reported torched
A suspected terrorist safe house in Salak,
A resident said the home was suspected to be used by
terrorists trained by Noordin M. Top.
“Around 10 different people were using the home and they had
similar appearances to terrorists recently arrested in Cilacap and Temanggung
in
Residents said the occupants have since fled the area. Police
have not issued any statements over the incident.
On Thursday, West Java Governor Ahmad Heryawan quoted an
intelligence source as saying West Java,
West Java Armed Forces official Maj. Gen. Rasyid Qurnuen
Aquari urged the Army to increase surveillance of
Earlier this month, police found a cache of bomb-making
materials in a rented warehouse in
SECURITY
M-16 ammunition seized at OPM ‘HQ’: Papua Police
Dozens of rounds of ammunition, machetes, arrows and
documents bearing the separatist Morning Star symbol were confiscated during a raid
at a house in Abe Gunung, Papua, police said, Kompas reported.
Jayapura Police chief Adj. Sr. Comm. Robert Djoenso said the
ammunition was for M-16 automatic rifles and the house is suspected to be the
headquarters of the Free Papua Organization (OPM) in the area.
Djoenso said the raid was conducted to apprehend Demus
Wenda, the secretary of the West Papua National Committee, who claimed
responsibility for raising an outlawed Morning Star flag on Independence Day on
August 17
Djoenso said even though police failed to arrest Wenda, it
is believed the house was connected to the flag hoisting.
LAW & ORDER
KPK arrests former health
minister
Former Health Minister Ahmad Sujudi spent the weekend in
jail after he was arrested on Friday by the Corruption Eradication Commission
(KPK) over his alleged role in a multimillion-dollar graft case in 2003 that
investigators say could have resulted in the deaths of hospital patients.
The 68-year-old former minister, who served under former
President Abdurrahman Wahid, was declared a suspect in May, but was not
detained, after he admitted to accepting $70,000 in kickbacks in 2003 from PT
Kimia Farma Trading and PT Rifa Jaya Mulia in return for providing them with
government contracts.
The companies allegedly inflated the budget of the contracts
to supply medical equipment to remote areas across the country by more than
Rp71 billion.
Bibit Samad Riyanto, deputy for graft investigations at the
KPK, said that Sujudi and executives from the two companies had manipulated the
per-unit prices of the equipment by up to 5,000% above retail prices.
“This level of corruption blocked access to health care and
potentially killed innocent patients,” Riyanto said.
Kimia Farma Trading president director Gunawan Pranoto and
Rifa Jaya president director Rinaldi Yusuf were also detained.
Sujudi also said that the KPK would soon reveal the identity
of a new graft suspect connected to the procurement process at the ministry
during the 2006 avian flu outbreak.
“We have made (the suspect) our prime target, but it will be
several days before we have all the documents ready,” he said
He said that the KPK expected to uncover a substantial
amount of price mark-ups that may have cost the state approximately Rp32
billion in the procurement of medicines and equipment in the bird flu outbreak.
The KPK is also investigating a similar budget-inflation
case dating back to 2007, with total state losses valued at more than Rp4
billion.
KPK spokesman Johan Budi said that with so many procurement
problems at the ministry, the KPK felt obligated to intervene in order to avoid
further losses to the state.
HEALTH
Diabetes threatens to overwhelm deficient health system
Increasing cases of diabetes, where
the body can no longer regulate blood sugar levels on its own, is threatening
to further strain the inadequate public health sector and its budget.
Diabetes is one of the fastest growing health risks in the
developing world and is poised to hit
According to research published in the Journal of American
Medical Association in May, more than 60% of future diabetes patients will be
in
The World Health Organization has estimated that
"In 2000, 8.4 million Indonesians suffered from
diabetes and the figure is expected to increase to 21.3 million in 2030,"
said Professor Sidartawan Soegondo, a metabolic endocrine and diabetes
consultant at
Fueling this trend is
These factors, plus increasingly sedentary lifestyles due to
urbanization, have seen an increase in obesity in
In one example, the number of diabetes cases in Banyuwangi,
Agency official Juwana Sujuswa said diabetes patients have
been increasing annually at an average rate of 15%.
ECONOMY
Major banks agree to lower deposit
rates
Fourteen
major banks have agreed to lower their maximum deposit rates effective
immediately, Bank Indonesia (BI) deputy governor Budi Mulya said on Thursday, Reuters
reported.
Mulya
said the banks had agreed to lower the deposit rates to 150 basis points above
the benchmark policy rate, which translates into 8%, and reduce them further to
50 basis points above the BI rate within the next three months.
This
compares to previously when deposit rates could hit 10% for big institutional
depositors.
"Starting
Friday, it will be 150 basis points above BI rate. Then after three months, it
will be 50 basis points above BI rate. This has been agreed by 14 major
banks," Mulya told reporters.
"We
hope foreign banks and other banks will follow," Mulya said without naming
the banks.
Mulya
said the central bank would offer repo facilities with three-month maturity but
did not give an exact timeframe on when this could take effect.
The new
repo facilities would help banks with short-term funds in case big depositors
withdraw their funds from the banks.
The
agreement marks the end of a long period in which both business and government
have demanded lower rates from banks. For their part, banks have complained
that the cost of money has made it impossible to do so, since large depositors
have been in a position to demand rates higher than those advertised to
ordinary customers.
Energy
majors Mitsubishi from
Mitsubishi
is carrying out a feasibility study of a coal gasification project valued at
$500 million in Bontang, East Kalimantan, while Samsung wants to team up with
PT Trans Pacific Petrochemicals Indotama (TPPI) to build an aromatic plant in
Tuban,
Agro and
Chemical Director General Benny Wachyudi said the two investors showed serious
interest in carrying out their plans.
The two
companies, however, will need guarantee in supply of gas and electricity, Investor Daily said.
The
government was considering a far larger project. An official from the National
Development Planning Board (Bappenas) said on Thursday the government may offer
contractors concessions in the areas around the proposed Rp100 trillion ($10
billion)
“The
internal rate of return alone is so low that it would not be profitable,” said
Dedi S Priatna, the deputy for infrastructure at Bappenas.
Priatna
said that the concessions would likely be in sectors such as forestry or
tourism. “It will have to be that way if it is to be profitable. We will
conduct a series of seminars to assess the feasibility of the proposal,” he
said.
Private
contractor PT Bangungraha Sejahtera Mulia, a subsidiary of Artha Graha Networks
(AGN) has completed a “pre-feasibility” study on the bridge, the findings of
which have been handed to the government. The government has also completed a
number of studies, but these were confined to construction-related matters, Priana
said.
The
completion of the pre-feasibility study is the latest step in the planning
process, which was kicked off by the signing of a memorandum of understanding
in October 2007 between AGN and the Banten and Lampung provincial governments.
In
addition to the findings of the pre-feasibility study, the provincial
governments have submitted proposals for their inclusion in public-private
partnerships to develop the project.
The government also moved to abolish thousands of taxes and
levies under a new regional taxation law, President Susilo Bambang Yudhoyono
said Wednesday, Dow Jones reported.
"In compliance with our common commitment to create a
favorable investment climate in the regions, the government has abolished, is
abolishing and will continue to abolish various regional levies which are
inconsistent with regulations," Yudhoyono said in a speech to lawmakers.
He said the central government has recommended that over
5,000 proposed and existing regional regulations on taxes and levies be
abolished, largely in the transportation, industry, trade and agriculture
sectors.
BUSINESS BRIEFS
MACROECONOMY
2010 growth targeted at 5%: Minister
"This growth target is optimistic considering projected
slower growth in the international economy, but it is achievable,"
Indrawati told members of House of Representatives’ budget committee.
The 2010 budget is expected to contribute Rp91.9 trillion
($9.19 billion) to the country’s monetary balance to accelerate the economy's
growth while preventing "excessive" inflation, Indrawati said.
She added that the 2010 budget would focus on boosting
demand, with the government allocating Rp518.4 trillion for spending and
Rp144.5 trillion for investment.
The 2010 budget bill is expected to be endorsed next month
before new House members are inaugurated.
The government this year plans Rp73.3 trillion in stimulus spending,
largely in the form of tax breaks for businesses.
She said infrastructure development, investment, exports and
tourism among other sectors will drive growth next year.
Bank
Meanwhile, State Minister for National Development Planning
Paskah Suzetta said on Thursday that the government lacked the funds to finance
infrastructure projects across the country, The
Jakarta Post reported
Suzetta said the government had only allocated Rp40 trillion
($3.96 billion) for infrastructure projects next year, or 30% of the costs of
all projects.
From 2010 to 2014, the government will need Rp1,429 trillion
to improve infrastructure, he said.
"This amount of investment is needed to help our
economy grow between 5% and 7%,” Suzetta said.
CPI
rise may be slower in August: BPS
"During
the first three weeks of August, no price pressures have been evident. If this
continues until the end of the month, inflation may be lower," Rusman
Heriawan told reporters, without giving a specific forecast for the inflation
rate.
Heriawan
said prices are likely to rise at a quicker pace next month due to the Muslim
fasting month of Ramadhan.
In July,
the consumer price index (CPI) rose 0.45% on month and 2.71% on year - the
slowest annual inflation in nine years.
The International Monetary Fund (IMF) will allocate special
drawing rights (SDRs) worth an equivalent $2.7 billion for Indonesia as part of
its measures to strengthen global liquidity in 2009, Bank Indonesia (BI) said, Reuters
reported.
“The allocation is for all member countries of the IMF and
is part of global efforts to tackle the (current economic) crisis through the
availability of global liquidity,” BI deputy governor Hartadi Sarwono said in a
statement.
The use of the facility is without conditions, BI said, and
is different from an IMF loan facility extended to
The IMF facility will increase
The SDR is an international reserve asset, created by the
IMF in 1969 to supplement its member countries' official reserves. Its value is
based on a basket of four key international currencies, and SDRs can be
exchanged for freely usable currencies.
INVESTMENT
Pelindo
I inks $500M port development project
State
shipping company PT Pelabuhan
Pelindo I
finance director Suwono said that to support the development of the projects,
the company had allocated Rp53.2 billion ($5.32 million) solely for the
procurement of supporting equipment.
The
companies involved in signing the commitment agreement include state-owned oil
and gas company PT Pertamina, shipping company Maersk Line, Regional Container
Line (RCL), Langkat Regency of North Sumatera, Sabang Regency and the North
Aceh Regency of Aceh and the Dumai Regency of Riau.
The
program mainly involves expansion of existing ports in Aceh, Batam, North
Sumatra and Riau with financing both from company internal cash and from
Bambang
Eka Cahyana, a director of commercial and business development at Pelindo I,
said the company had so far secured a loan worth $87 million from IDB and
expected to secure another from JBIC.
"The
(total) $500 million in funds will be used to finance projects in the next five
years," he said.
The ports
of Belawan and Batam are planned to be expanded so that they will be able to
handle more containers with estimated costs of $83 million and $100 million
respectively, Cahyana said.
The
project in Riau, on the other hand, focuses on transforming the
Cahyana
said government planned to make Dumai a CPO spot market hub with direct
transactions between sellers and producers.
The
remaining $192 million, he said, would be spent on developing the Malayahati
and Sabang ports in Aceh and the Perawang port in Riau.
"These
projects in Aceh and Riau will mostly focus on expanding and improving cargo
terminals. We hope national logistic costs will decline after ports are
improved," he said.
STATE CONCERNS
Tourism sector expected to gain $7.8B in 2010
The government expects $7.8 billion in foreign exchange
revenue from the tourism sector next year, or only a slight gain over the 2008 total,
Finance Minister Sri Mulyani Indrawati said on Thursday, The Jakarta Globe reported.
During 2008,
However, in 2009
The government has not publicly announced a revenue target
for tourism in 2009.
SOEs
Govt. set to convert SOEs to non-listed public firms
The government is in the final stages of preparing a
regulation that will allow it to convert the country’s state-owned enterprises
(SOEs) to non-listed public companies, The
Jakarta Globe reported.
A non-listed public company is one whose shares are
registered with the stock exchange but are not traded by the general public.
“We have completed the drafting of a government regulation on
transparency in state enterprises, including converting them into public
companies without them actually listing on the bourse,” Muhammad Said Didu,
secretary at the State Ministry for State Enterprises, said on Friday.
Didu said the ultimate goal of the regulation was to boost transparency
in the state sector, with Pertamina being the first target, by forcing the SOEs
to comply with stock exchange rules. Pertamina has long regarded as a byword for
inefficiency and inept management.
“The people of
Didu declined to say whether the move was a first step on
the road to an eventual partial privatization of the company.
Semen
Gresik starts building Tuban IV plant
State-owned
cement maker PT Semen Gresik has started work to build its fourth cement
factory Tuban IV in Tuban,
Construction
of the project, starting Thursday, is to be completed in 2012 at a cost around
Rp3.5 trillion ($350 million), said Dwi Soetjipto, the president of the
company.
Soetjipto
said demand for cement is currently weak but the company has to be prepared for
a surge in demand starting in 2011.
Earlier,
Semen Gresik said it would expand its production capacity to 19 million tons
this year from 18 million tons last year with an investment of $55 million.
According
to Semen Gresik data the country’s domestic cement consumption in July rose 2.8%
to 3.5 million tons from a year earlier. It also has forecast cement
consumption will grow 0-3% this year, after rising 11.5% in 2008.
State-owned
steel maker PT Krakatau Steel said it has built a factory to produce components
for armored vehicles assembled in the country, Asia Pulse reported.
The
factory will supply components for 154 units of armored vehicle of the APS-2
6x6 type assembled in the country by Pindad, a producer of military equipment,
Krakatau Steel President Fazwar Bujang said.
Last
month, 60 units of armored vehicles using steel components produced by Krakatau
Steel, were handed over by Pindad to the Defense Ministry.
The
production of the component by Krakatau Steel saves the country $150 million in
imports of components, Bujang was quoted as saying by Investor Daily.
Krakatau Steel also said it has set aside $350 million to
finance expansion at its complex in Cilegon, Banten, next year. It will build a
new production facility for hot rolled plates (HRP)
Currently, Krakatau Steel has six production units in both
the downstream and upstream sectors.
Telkom to buy 80% stake in
PT Telkom said Thursday its unit, PT Dayamitra
Telekomunikasi, will acquire 80% of PT Solusindo Kreasi Pratama, also known as
"We believe that towers are strategic infrastructure
for telecommunication companies such as Telkom and this acquisition will
strengthen Telkom Group's position in the industry," Telkom president
director Rinaldi Firmansyah said.
Telkom, the country's largest telecommunication company by
assets and subscribers, said in a statement that
The statement didn't give the value of the acquisition, for
which HSBC was financial adviser.
Govt. to sell minority stakes in five local firms
The government said Wednesday that it intends to sell
minority stakes in five local companies, Dow Jones reported.
The Ministry of State Enterprises announced it plans to sell
its entire 37% stake in PT Atmindo, a manufacturer of industrial boilers, its
9.9% stake in tire maker PT Intirub, its 5% stake in industrial waste
management service provider PT Prasadha Pamunah Limbah Industri, a 0.8% stake in
paper company PT Kertas Blabak and a 0.4% stake in another paper manufacturer,
PT Basuki Rachmat.
The government has named PT Danareksa Sekuritas as the
financial adviser for the sale. The timetable for the stake sales remains
undisclosed.
PRIVATE SECTOR
Electronic
goods sales in
Sales of
electronic goods in
EMC
secretary general Agus Soejanto said electronic goods price hikes of 12.5% on
the average also contributed to the increase in sales turnover.
Sales are
expected to be brisker in the run up to the Muslim holiday dul Fitri, Soejanto
said.
Govt. names eight BWA operators
The Communications and Information Minister on Wednesday
named eight operators of broadband wireless access (BWA) in 15 zones across the
country, Asia Pulse reported.
Development of high speed BWA is expected to result in lower
internet tariffs, deputy chairman of the Indonesian Chamber of Commerce and
Industry Anindya Bakrie said.
Bakrie said demand for internet service is expected to grow
faster in the coming years marked with growing numbers of subscribers and
users.
He said the country's telecommunications industry is
predicted to grow between 20%-25% this year and the growing number of internet
users will allow operators to cut tariffs.
Separately, President Susilo Bambang Yudhoyono on Wednesday
said the government would intensify development of its telecommunication and
telephone infrastructure to connect all villages across the country to the internet
by 2010.
Indofood acquires plantation firm for $850,000
Integrated food producer PT Indofood Sukses Makmur, the
largest instant noodle company in the world, announced it has expanded its
plantation area with an agreement to pay Rp8.5 billion (about $850,000) for
10,000 hectares of land in
The agreement covers 100% of shares in PT Intimegah Bestarui
Pertiwi, a local plantation company that currently holds location permits for
the area, Indofood said in a filing to the Indonesia Stock Exchange.
Indofood will make the purchase through PT Serikat Putra and
PT Indoagri Inti Plantation, subsidiaries of its main plantation unit, Agri
Resources.
Matahari H1 net profit rises
PT Matahari Putra Prima, the country’s largest retailer,
said Tuesday its first-half net profit more than doubled because of higher
sales, Dow Jones reported.
Net profit for the January-to-June period rose to Rp130.36
billion from Rp60.04 billion a year earlier.
Sales advanced by 15% to Rp5.98 trillion from Rp5.18
trillion at end-June a year earlier.
At end-June 2009, Matahari operated 87 department stores, 45
hypermarkets, 26 supermarkets, 53 pharmacy outlets and more than 79 family
entertainment centers in more than 50 cities across
POWER
New bill allows local governments to issue power licenses
The new electricity bill will give full authority to
regional administrations whose regions are outside state power company PT PLN's
current service areas to issue licenses to local companies to provide
electricity, The Jakarta Post
reported.
"The regional administrations may appoint regional
government-owned companies or cooperatives to provide electricity for their
areas," J Purwono, Director General for Electricity and Energy Utilization
at the Energy and Mineral Resources Ministry, said on Monday.
He added that this policy would help the country to expand
electricity supply to more areas. Currently only 65% of the country has
electricity cover.
"Some areas in Sulawesi,
"Local government may also provide subsidies if they
want to have lower electricity tariffs in their areas," Purwono added.
The electricity bill is being deliberated by the government
and the House of Representatives in a process expected to be concluded by
September.
Currently, electricity in all regions is supposed to be
provided and distributed by PLN with central government regulating tariffs and
subsidies.
Bukit Asam to build 30 MW power plant
State-owned coal mining company PT Tambang Batubara Bukit
Asam plans to build a 30 MW coal-fired power plant in Bangko Barat, Muara Enim,
The construction of the power plant would cost Rp414 billion
($41 million), it said.
The firm would also supply electricity to state power
company PT PLN to help fill a power deficit in
Bukit Asam has also set aside $150 million to buy coal mines
and expects to complete one acquisition by the end of 2009, president director
Sukrisno said on Thursday, Reuters reported.
"We are in the due diligence process for two mines, but
hopefully this year we will settle the deal for one mine," said Sukrisno,
adding the acquisitions are part of the firm's plan to increase its coal production
to 50 million tons a year within five to six years.
OIL & GAS
Oil,
gas cost recovery to rise next year: Ministry
Cost
recovery for oil and gas exploration next year is estimated to rise to $13.01
billion as oil and gas companies try to increase oil production, the Finance Ministry
said, The Jakarta Post reported.
The
ministry said the increase was aimed at boosting national oil and gas output to
meet production targets.
Cost
recovery paid by the government to oil and gas companies this year is set at
$11.05 billion, with a best effort of $10.05 billion, as requested by the House
of Representatives.
Next
year's national crude oil output is set at 965,000 barrel per day (bpd),
according to the 2010 budget bill, up from the 960,000 bpd expected this year.
Separately,
upstream oil and gas regulator BP Migas chief Raden Priyono said the higher
estimates for production and cost recovery were at least partly due to the
inclusion of output from the Tangguh oil and gas field and the Cepu oil block in
the 2010 budget.
“Tangguh
and Cepu have started producing. As costs have been incurred, we will have to
cover them,” Priyono said.
The
Tangguh field in
Tangguh
also started producing about 7,000 barrels of oil condensate a day last month,
while the giant Cepu oil field, straddling the border of Central Java and
Asked why
oil production was expected to increase only slightly, Priyono said Chevron
Pacific Indonesia, one of the country’s biggest oil producers, would see lower
production next year due to a natural decline from its aging wells.
Pertamina
EP seeks partners to develop marginal blocks
PT
Pertamina EP said Friday it is seeking partners to jointly operate seven
marginal blocks as the company focuses on larger blocks, Dow Jones reported.
The upstream
unit of the state-owned oil and gas company PT Pertamina said it will open
bidding for the blocks during the November 2-6 period.
Pertamina
EP said two of the blocks, Tangai-Sukananti and Loyak-Talanggula in South
Sumatra, are in production stage, while five are in the exploratory phase:
Rantau Deep Utara and Rantau Deep Selatan in North Sumatra, Pemalang in Central
Java, Tuban Selatan in
By
farming out the marginal blocks, Pertamina EP plans to focus on the development
of its main blocks such as Limau, Tambun and Sukowati, which have shown
significant increase in output.
Meanwhile
parent company PT Pertamina's production reached 184,158 barrels per day (bpd),
7.1% above its initial average target of 171,900 bpd for this year, Energy and
Mineral Resources Minister Purnomo Yusgiantoro said Thursday, Dow Jones
reported.
Yusgiantoro
said units Pertamina EP and Pertamina Hulu Energi raised their oil production
to 136,504 bpd and 47,654 bpd, respectively.
Pertamina
EP’s current production overshot its production target of 125,500 bpd for 2009.
It also produced 1.090 million standard cubic feet of natural gas a day.
Ephindo
to start CBM sales in 2011
Local company
Ephindo and its partners will begin gas sales from their coal bed methane (CBM)
blocks in 2011, its chief executive said, Reuters reported.
"The
drilling of the seven-well program will start this year and will be carried
over to 2010," Ephindo chief executive Sammy Hamzah said on Thursday,
adding that spending on the process would be more than $10 million.
"The
first commercialization of the gas will be in the second half of 2011."
Ephindo,
formed in 2005, aims to generate revenues from the three CBM blocks in Kutai
and Sangatta in East Kalimantan, as well as in Sekayu in
Ephindo
and PT Medco Energy International have an equal stake in the Sekayu Block,
estimated to have 183 trillion cubic feet (tcf) of CBM resources.
The
company has a 45% stake in the Kutai West Block while another local company
Tanito has the rest.
MINING
Antam seeks Newmont unit shares
State-owned mining company PT Aneka Tambang (Antam) wants to
buy shares in PT Newmont Nusa Tenggara (NNT) if it gets a green light from the
government to invest, Antam's president director said on Friday.
Antam president director Alwin Syah Loebis said in an
interview that the firm had submitted its interest to buy shares.
"PT NNT's operation in copper and gold are in line with
Antam's core business," Loebis said.
Loebis said investing in Newmont fitted with the firm's
strategy of buying mature mining assets to help counter the impact of weak
nickel prices and the financial crisis.
"If we want to invest our equity or cash in times of
crisis, we have to see our investment giving a quick return, that can quickly
produce," he said.
Local media has reported Antam had been appointed to head a consortium
of state-owned enterprises to buy Newmont shares, but Loebis said such a consortium
had not yet been formed.
On Tuesday, state coal miner PT Tambang Batubara Bukit Asam
president director Sukrisno said the central government will be represented by
a consortium of state firms, which will be spearheaded by Antam, in the
purchase of a 14% stake in PT NNT,
Sukrisno said Bukit Asam had allocated about $50 million to
help finance the planned acquisition.
Newmont is required by a contract to sell 31% of its stake
in PT NNT - operator of the Batu Hijau Mine - to the government, the regional
government, state-owned companies or designated local private companies.
The central government has said that it would buy the 14%
stake, which is the stake due to be divested in 2008 and 2009.
On July 14, the government and Newmont agreed that the price
of the 14% stake would be set at $493.6 million.
Delta Dunia buys coal firm BUMA for $550M
Publicly listed diversified company PT Delta Dunia Petroindo
said on Thursday it has reached an agreement to buy coal mining contractor PT
Bukit Makmur Mandiri Utama (BUMA) for $550 million, Reuters reported.
The owners of BUMA had put the company up for sale in May to
private equity firms in
“The sale was in line with a strategy to increase shareholder
value, and to grow revenue through a new mining and contractor platform,
leveraging the ripe coal market opportunities in
The firm said the transaction should be completed in the
fourth quarter 2009, subject to obtaining shareholder and regulatory approval.
Bangka
Bangka Belitung provincial government has proposed a
regulation to set up a special industrial zone for an advanced tin industry
focusing on higher value products such as tin solder and tin alloy, head of the
Bangka Belitung mines' office said Tuesday, Reuters reported.
"We want to increase exports of more high-value tin
products, not only refined tin. Since Bangka Belitung is the main producer, the
industry should be here," Noornedi said.
"In the future, exports of tin may be limited so that
the some of the metal can be used in the downstream tin industry to create more
jobs and revenue," he said, without elaborating.
The proposal was still being discussed by the governor and
the provincial parliament, the official said.
Banpu sees output up 10% in 2010
Thailand's top coal miner, Banpu, said on Monday it expected
coal output from its Indonesian mines to rise 10% to about 22-23 million tons in
2010, Reuters reported.
Banpu, also the fourth-biggest coal miner in
The company's average selling prices were above $60 a ton in
the second half of this year versus $78.86 in the first half, it said.
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[1] This Trade and Investment News is a publication of the Coordinating
Ministry for Economic Affairs of the Republic of Indonesia. Readers are
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