THE
COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
Tel: (021) 351-1178
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Trade and
Investment News[1], 11 May 2009
Highlights
National
·
Oceans
conference to get underway with hopes of new directions
Politics
·
General
Election Commission announces results
Terrorism
·
Law & order
·
Indonesian
police arrest suspected illegal people smuggler
Health
·
Three
false alarms over swine flu virus
Economy
·
Stock
market hits record for the year, 37% up
Business briefs
Macroeconomy
·
President
tells ADB conference opening growth could hit 4.5%
·
Bank
Investment
·
Volkswagen
confirms it will build $47 million assembly plant
State concerns
·
Government
to restructure fertilizer subsidy system
SOEs
·
Sales
at PT Krakatau Steel drop 25% in first quarter
Private sector
·
Two
more palm oil firms get green certification
Banks
·
Banks
predicted to cut lending rates after July presidential poll
·
Bank
Power
·
East
Java to bring power to isolated villages with micro-hydro plants
Oil & gas
·
President
Yudhoyono calls on sector operators to boost output
Mining
·
NATIONAL
Oceans conference to get underway
Ministers
and officials from 70 nations gather in
The
five-day World Ocean Conference in
Environment,
fisheries and resources ministers are expected to agree a declaration aimed at
influencing the direction of the
Organizers
say they hope to expand the scope of any future climate change agreement to
encompass marine environments, on which hundreds of millions of people rely.
"The
conference will be non-binding but it is the highest political level ocean
conference done so far," said Indroyono Soesilo, the Indonesian official
in charge of organizing the event.
"If
we are able to put oceans into world climate change policies it will be a
success for us because it has never happened before. Because of global warming
we will have sea level rises that will make some island nations disappear, so
let's do something about that."
The
sidelines of the conference will also see the launch of an international plan
to save the Coral Triangle, an underwater ecosystem in Southeast Asia that is
half the size of the
Leaders
from the six Coral Triangle Initiative nations --
But while
organizers express optimism over the meeting, scientists say knowledge about
the oceans is so limited that not much is known about how they will behave
under the influence of climate change or the role they can play in absorbing
carbon.
The
boosting of ocean research and agreements on international sharing of data are
expected to be a part of any conference declaration.
"If
you talk about marine carbon issues it's still a long way to go," The
Nature Conservancy's Coral Triangle Centre head Abdul Halim said. "Unless
you have at least basic scientific evidence to support your argument it's
really difficult for people to argue about."
Among all
the cities in Southeast Asia,
The
disasters included floods, drought, sea-level rise and landslides, she said.
Indonesian Environmental Affairs Minister Rahmat Witoelar added that a change
in use of the city was needed, with people using it as a transit area rather
than a permanent home.
EEPSEA
ranked Central, North and West Jakarta at the top of a list of administrative
regions prone to climate change, followed by Mondol Kiri province in
Other
vulnerable areas in
The study
also reveals that all regions in the
POLITICS
Abstentions
at 49.6 million: KPU
The General Election Commission (KPU) confirmed on Saturday
night that the Democratic Party of President Susilo Bambang Yudhoyono took the
largest number of votes in the April 9 polls, but that abstentions reached 49.6
million, outpacing any of the parties.
The abstentions represented 29.01% of the total number of
registered voters, while another 17,488,581 votes were classified as invalid,
leaving a total valid vote count of 60.78% compared with the 2004 valid vote
level of 76.66%, Kompas reported.
The KPU announced the final vote despite the fact that
disputes in a number of areas – notably
The winner of the poll was Yudhoyono’s Democrats, with 20.8%
of the vote, giving it 148 seats in the new House of Representatives. It was
followed by the Golkar Party with 14.5% (108 seats) and the Indonesian
Democratic Party of Struggle (PDI-P) with 14% (93 seats).
Then came the Prosperous Justice Party (PKS) with 7.9% (59
seats), National Mandate Party (PAN) with 7.5% (42 seats), United Development
Party (PPP) with 6.96% (39 seats), the Great
Another 29 parties that contested the national-level polls
failed to meet the 2.5% electoral threshold and failed to gain seats in the
House.
The results were consistent with predictions made by various
pollsters hours after Indonesians cast their ballots.
Parties, or coalitions of parties, that win at least 20% of
seats in the 560-member House of Representatives, or 25% of the popular vote,
may nominate candidates for the presidential election.
With a popularity rating at above 60%, Yudhoyono could win
the first round with a clear majority and avoid a run-off. A run-off would be
scheduled in September if no candidate wins more than 50% of the vote.
Yudhoyono is expected to face off against his current vice
president and Golkar Party chairman Jusuf Kalla and PDI-P's Megawati
Sukarnoputri.
Democrats to
announce SBY’s running mate
The Democratic Party is to announce the running mate of its
presidential candidate Susilo Bambang Yudhoyono (SBY) in
"God willing, it will be announced in
He said Yudhoyono wanted to announce his running mate after
the General Election Commission (KPU) had completed counting the ballots in the
April 9 legislative election.
"President Yudhoyono wants to follow good political
ethics. He will let the KPU announce the results of the legislative election
first before announcing his running mate," Malaranggeng said.
Asked who would probably be Yudhoyono`s running mate,
Malaranggeng refused to mention any name.
One possible vice presidential candidate for Yudhoyono, State
Secretary Hatta Radjasa, denied media reports saying he had rejected his
nomination as the incumbent’s running mate, The
Jakarta Post reported.
The National Mandate Party (PAN) official refused to declare
his readiness to contest the election.
It was Yudhoyono's sole authority to pick his running mate, he
said, adding that other parties seeking a coalition with the president's
Democratic Party should not insist on proposing candidates.
TERRORISM
Mas Selamat Kastari, the
alleged leader of the
“Kastari has been arrested by the Malaysian Special Branch in a joint operation
between the MSB and (
Kastari was caught on
April 1 in the Malaysian state of Johor, which sits just across the
causeway from
Singapore Home Affairs Minister Wong Kan Seng said Singaporeans must maintain
vigilance and not let their guard down following Kastari's arrest as the terror
threat is real and
Kastari will be sent back to the
Kastari is said to be the head of the
On February 27 last year, Kastari escaped from his high-security detention
center in
Al Qaeda funds coordinator in Malaysia arrested
A suspected al Qaeda
operative, working undercover in
The 31-year-old suspect, a German national of Turkish descent, was arrested in
Though the authorities in
Malaysian authorities
were informed and checks revealed that the person arrested in
The daily, quoting unnamed sources, said that the suspect held a valid work
permit and was employed on contract basis at the manufacturing plant. At
the time of the arrest, he was still employed with the company as an engineer
at its vehicle paint shop.
He is believed to have been working at the plant since it began operations in
early 2005. His employment was arranged by another foreigner working for the
plant.
"This is not something new. There have been cases of foreign terror
suspects working here. Many of them, however, have been nabbed," the
source told the newspaper.
LAW & ORDER
Notorious immigrant
smuggler held
The biggest single flood of asylum seekers to
Indonesian police acknowledged that Cobra, who was arrested on
Monday night in a raid in Makassar,
The voyage, which set out from Kupang, in
The arrest was part of a joint operation between Indonesian
authorities and the Australian Federal Police, which included mobile phone
detection technology provided by the Australians.
According to a Kupang detective, Indonesian authorities had
six separate mobile phone numbers for Cobra, accused of being one of the
leaders of
HEALTH
Three
false alarms over swine flu
Three suspected cases of
swine flu, in
Health Minister Siti
Fadillah Supari announced on Wednesday night that tests found no trace of swine
flu in samples from the suspect in
An earlier case in
The government tightened
up its defenses against the entry of the disease by stating that any swine flu
suspect who refuses isolation procedures will be imprisoned based on laws on
health and disaster mitigation, Detikcom reported.
The Indonesian Health Ministry has taken a number of steps
to combat the H1N1 swine flu virus, particularly by screening tourists in
airports and ports. Thermal scanners have been installed in airports and ports.
ECONOMY
BI ‘comfortable’ as rupiah
strengthens
Bank
The rupiah reached a six-month high against the US dollar on
Thursday, touching 10,325, making it the second-best performer in Asia after
being the region’s second-worst only three months ago, The Jakarta Globe reported.
The currency has strengthened 4.52% this year and ended the
week slightly weaker at 10,375, compared with the week-before level of 10,610.
BI deputy governor Hartadi Sarwono said the central bank was
comfortable with the rupiah’s exchange rate. “As long as (the fluctuation)
remains consistent with economic fundamentals, just let it be,” he said, adding
that the central bank would guard against volatility so the rupiah would
neither appreciate nor depreciate too quickly.
BI is forecasting economic growth of 3% to 4% this year, and
in a speech to the opening of the Asian Development Bank conference in
Sarwono said the latest export data showed prices for
several commodities including copper, coal and palm oil were increasing,
helping the nation’s balance of payments to post a surplus in the first
quarter. Early signs of recovery in
Bank
Some analysts were not convinced. “Recent gains in the
rupiah were mainly caused by hot money flowing back into the country,” said
Farial Anwar, a Jakarta-based money market analyst. “That means it can leave as
fast as it came, creating volatility.” But, he added, “It’s not impossible that
the rupiah might go below Rp10,000 again.”
Anton Gunawan, an economist at PT Bank Danamon, said the
strengthening rupiah was an indication of positive sentiment in the economy.
“Imported raw materials for infrastructure development will be cheaper. A
strengthening rupiah will also decrease the derivatives burden,” he said.
Despite the overall positive perception of the economy, the
Investment Coordinating Board (BKPM) cut its growth forecast for both foreign
and local direct investment this year to 9%, down from 10.7 to 11.2% in its
previous forecast.
According to BKPM’s latest data, the country posted minus
4.1% in growth of FDI in April based on a year-on-year calculation. According
to data, actual FDI for April was recorded at $1.4 billion compared with $1.46
billion in the same period last year. Transportation, warehousing and
communications contributed $1.21 billion to the total investment in April.
On the sidelines of the ADB’s annual meeting, BKPM chairman
Muhammad Lutfi said it cut its forecast after it saw that the actual inflow of
foreign direct investment (FDI) in April was low compared with the same period
a year ago.
Lutfi said that despite slow FDI realization in April,
The commitments include one from one of the largest European
nickel firms, which is investing as much as $4.6 billion in North Maluku, and
the Senoro-Donggi liquefied natural gas project, which has secured FDI
commitment of about $1.8 billion although it is having trouble getting
regulatory approval. The rest would be from investors who plan to build a power
plant in
In a bid to make investment in the energy and the mining
sectors more attractive, Lutfi said BKPM had recommended to the government that
investors in these sectors be given tax holiday incentives and offered some
offtake agreements, or agreements in which the government would buy industrial
output. In addition, guarantees for project financing were also needed, he
said.
The
Indonesia Stock Exchange continued to reflect the generally buoyant mood, with
the composite index closing for the week at 1,862.53 compared with the previous
week’s close of 1,729.58.
The close
represented a new record high for 2009, with the index adding 37% so far this
year.
BUSINESS BRIEFS
MACROECONOMY
SBY sees 4-4.5% economic growth
President Susilo Bambang Yudhoyono said on Monday that the
country is expected to post economic growth of between 4-4.5% this year, which
he said 'looks good', Reuters reported.
That is more optimistic than the central bank, which has
forecast growth of 3-4% in 2009, a sharp slowdown from 6.1% last year as demand
for exports slump.
“Here in
The government has launched a fiscal stimulus package aimed
at boosting growth including more spending for infrastructure projects and tax
incentives.
Yudhoyono said that apart from the growth rates, the quality
of economic growth was also important for political and social stability in the
country.
“This is significant because it means we have been able to
marry democracy with stability, not an easy thing among countries undergoing
transition. And we expect this trend of democratic stability to continue,” he
said.
The ADB has forecast that the region's economies are likely
to grow just 3.4% in 2009, the slowest pace since the Asian financial crisis a
decade ago. It sees growth recovering to 6.3% next year if demand rebounds.
Finance ministers from 13 East and Southeast Asian countries
met in Bali to set up a $120 billion emergency fund aimed at countering capital
flight of the type that hit during the 1997/98 Asian financial crisis.
BI cuts benchmark rate to 7.25%
Bank Indonesia (BI) lowered its benchmark interest rate for
a sixth straight month to help sustain consumer spending as inflation slows,
Bloomberg reported.
BI Governor Boediono reduced the key rate to 7.25% from
7.50%, according to a statement on Tuesday. The rate is the lowest since the
bank introduced liquidity-tightening measures in July 2005.
BI has cut its benchmark rate by a total of 2.25 percentage
points since December.
April consumer confidence jumps on peaceful election
Consumer confidence in April reached the highest level since
December 2007, a Bank Indonesia (BI) survey showed on Tuesday, in the wake of
peaceful legislative elections, Reuters reported.
The survey of 4,600 households in 18 cities across
It marked the first time the index had crossed the 100 level
-- which indicates that consumers are optimistic -- since December 2007. A
reading below 100 reflects consumer pessimism.
“Relatively peaceful and conducive social and political
conditions up to the legislative elections likely boosted consumer confidence
on the economic condition,” BI said on its website.
INVESTMENT
Volkswagen to open
Volkswagen AG plans to open a new assembly plant in
The planned facility will begin assembling the Touran, a
compact multipurpose vehicle, and could eventually employ between 2,000 and
4,000 people, said a person with knowledge of the discussions.
The
Christoph Adomat, a spokesman for Volkswagen, confirmed the
assembly facility would initially produce several hundred passenger cars
starting in the summer, with output being steadily increased thereafter.
"This local vehicle assembly is to be set up as
Volkswagen's first step toward the long-term development of ASEAN
markets," Adomat said. He declined to comment on the potential size of the
investment.
The investment comes after Volkswagen failed to reach an agreement
in 2007 over an alliance with Proton Holdings Bhd.,
Lonsum to spend $28.5M for expansion
Publicly listed PT PP Sumatra
Lonsum director Emanuel Loe Soei Kim said after a
shareholders' meeting on Tuesday that the company would expand its plantation
areas to South Sumatra and
Kim also said the capital expenditure would be financed from
the company's reserve funds from last year's net profit.
Part of the funds, Kim said, would be used to add to the
capacity of existing plants by 395 tons per hour from 350 tons per hour.
Last year, Lonsum's net profit soared 64% to Rp928 billion.
The company's total sales grew 31% from Rp2.9 trillion in 2007 to Rp3.8 trillion
in 2008.
Bond transactions up 16.6% in April: IDX
The Indonesia Stock Exchange (IDX) announced Wednesday that
bond transactions went up by 16.6% in April as foreign investors returned to
the market, following signs of economic recovery, The Jakarta Post reported.
"The economy is doing well and keeps growing, while the
market is on the right track," IDX director for fixed income and
derivatives trading Guntur T. Pasaribu said, adding the solid economic
conditions would increase the appetite of foreign investors to put their money
into the country's bond market.
Citing the latest IDX data, Pasaribu said the level of
foreign participation in the bond market rose by 15% in April, back to the
level before the market crash last October.
Pasaribu said bond transactions were Rp61.1 trillion in
April, up from Rp52.8 trillion in March as foreign investors, who retreated in
the October 2008 market collapse, returned.
The bond market has a total value of Rp630 trillion, of
which Rp550 trillion is in government bonds and the remaining Rp80 trillion is
in corporate bonds.
Pasaribu said the situation was conducive to investment,
"Fifteen companies are now in the pipe line to issue bonds worth a total
of almost Rp15 trillion in the first semester of this year."
STATE CONCERNS
Govt.
to cut fertilizer subsidies, restructure system
The
government is seeking a change in the agricultural subsidy system by reducing
the subsidies for fertilizers to 20% of their market price and plans to channel
the funds to agricultural infrastructure development, The Jakarta Post reported.
"The
planned 20% subsidy will be implemented for all types of fertilizers,"
Agriculture Minister Anton Apriyantono said Wednesday, adding that negotiations
regarding the plan were ongoing and that there could be changes to the details.
Apriyantono
said the current subsidy system mostly benefited larger farmers using more
fertilizer and was of less help to small farmers who used only small amounts of
fertilizer.
"The
planned reduction of the fertilizer subsidy will benefit farmers in general
because the government will be able to allocate more funds for agricultural
infrastructure," he said.
According
to Apriyantono, the government will be able to save Rp10 trillion from the
subsidy and allocate it to improved irrigation and the construction of small
organic fertilizer factories which can employ a significant number of local
workers.
"The
government only needs some Rp350 million to build a small organic fertilizer
factory plus 30 cows. So with that money we can build up to 10,000 organic
factories and buy 300,000 cows, that will employ 10,000 workers," he added.
SOEs
Steel maker PT Krakatau Steel said Tuesday its sales fell up
to 25% to 320,000 tons in the first three months of this year because of
slowing demand, Reuters reported.
"Global economic weakness has affected steel demand in
the domestic market," said Fazwar Bujang, Krakatau Steel's president
director, "but we see demand is improving after March as some government
infrastructure projects have started."
The government projects include the construction of an oil
pipeline in Sulawesi worth $40 million and the construction of three fertilizer
factories at PT Petrokimia Gresik in
Krakatau Steel has said it expects sales of Rp15.8 trillion
($1.51 billion) in 2009, down from Rp19 trillion in 2008.
Krakatau Steel has said it will focus its sales on steel
products which are needed in government and private sector infrastructure
projects, as well as meeting demand from the defense industry and gas-cylinder
manufacturers.
It is one of six firms earmarked for privatization through
an initial public offering either this year or next. The sale would help raise
funds to plug a budget deficit and improve the firm's performance.
PRIVATE SECTOR
Bakrie Telecom net profit plunges 79% in Q1
PT Bakrie Telecom – the operator of CDMA brand Esia and
wireless telecommunications services Wifone and Wimode – said its net profit
dropped by 79% in the first quarter of this year as the company booked higher
foreign exchange losses on a weaker rupiah, The
Jakarta Post reported.
Net profit plunged to Rp5.7 billion ($535,800) in the first
quarter compared to Rp27.4 billion in the same period last year, a statement
issued by the company stated.
The drop in net profit was attributable to foreign exchange
losses of Rp14.2 billion, recorded by the company as of March 2009 against a
profit of Rp25.9 billion last year.
However, the company saw a significant jump in the number of
its subscribers, rising to 8 million in the first three months of this year
from 4.5 million in the same period last year.
Two more palm oil firms get green certification
Two more local palm oil plantation companies — PT London
Sumatra Plantation and PT Hindoli — have secured environmental certification
from the Roundtable on Sustainable Palm Oil (RSPO), The Jakarta Globe reported.
This means three of the 10 major palm oil producers in the
country have now received the RSPO stamp of approval. PT Musim Mas was the
first in
“Besides the three companies, there are a number of others
that are also on the waiting list for RSPO certification,” Achmad Mangga
Barani, the Ministry of Agriculture’s Director General of Plantations, told a
media conference on Wednesday.
“We are hoping that 10 companies will have RSPO certificates
by the end of the year.”
The firms hold concessions extending to more than 2.9
million hectares around the country.
Hero
Supermarket reports rise in net profit
Retailer Hero Supermarket posted a 22.5% profit rise in the
first quarter of this year, the company said in a press release Monday, Tempo
Interaktif reported.
It said net profit rose to Rp 2.06 billion, with net sales
up 13.1% from Rp1.35 trillion in first quarter 2008 to Rp1.53 trillion.
Operational profit surged 31.7% to Rp47.8 billion, enough to
cover interest cost which sky-rocketed 14 times from Rp243 million in the first
quarter last year to Rp3.6 billion this year.
BANKS
Banks likely
to cut lending rates after presidential polls
Banks are likely to begin cutting their lending rates after
the July 8 presidential elections, Minister for State Enterprises Sofyan Djalil
said, Antara reported.
"Bank Indonesia (BI) has lowered its benchmark rate,
risk condition has been improved while interest rates in the world have also
been going down so that the lowering of banks` lending rate could be
realized," Djalil said at his office on Friday.
He said that there is now enough spread between the central
bank`s benchmark and banks` interest rates, yet banks had not responded to the
BI rate cut.
Djalil said banks still saw that risks might still be high but the recent
smooth legislative elections had been responded to positively by the stock
market.
"The stock market has been very good. It means that investors have judged
what the market is going to be with regard to the upcoming presidential
elections," the minister said.
However, Djalil said, he would let banks interest rates develop based on the
market mechanism. State banks could not dictate their will on interest rates to
the market.
Banks to see 15% loan growth in 2009: BI
"Loan growth (is expected) to be 15% -- that's based on
the business plans of the banks submitted to BI," said Muliaman Hadad, a
deputy governor of the central bank.
Hadad said that BI will continue to review whether further
monetary easing is still needed.
BNI Islamic unit to get $500M from
IDB
Islamic Development Bank (IDB) plans
to invest as much as $500 million in PT Bank Negara Indonesia’s (BNI) shariah
banking unit to help it expand in Asia, Bloomberg reported.
A unit of IDB, the Islamic
Corporation for the Development of the Private Sector, will help the venture
buy banks and expand in
The investment will be made in
stages and the unit may be spun off as an independent business this year, he
said, without providing further details.
BNI’s Islamic unit has total assets
of $300 million, Suwondo said.
BNI’s profit rose 36% to Rp1.2
trillion last year from Rp898 billion a year earlier. Net interest income rose
33% to Rp9.9 trillion.
BEI to offer $192M in bonds
State-controlled Bank Export Indonesia (BEI) will offer
bonds worth up to Rp2 trillion ($192 million) in June, The Jakarta Post reported.
BEI president director Arifin Indra Sulistyanto said
Thursday that the company would use the proceeds for financing.
The bank will start offering the bonds on June 4, 5 and 8.
The bonds have been given a rating of triple A from
BEI has appointed PT Trimegah Securities and PT Danareksa
Sekuritas as underwriters.
The bonds will be divided into four packages with fixed
interest rates that will be paid every three months.
Those packages are series A with a maturity period of 370
days and rates at the same value as the government bond FR0010 plus between
87.5 and 187.5 basis points. Series B with maturity period of three years and
rates at the same value as the
government bond FR0023 plus between 87.5 and 187.5 basis points.
Sulistyanto said BEI targeted this year's lending would grow
by 26% to Rp12 trillion.
POWER
PLN,
State power company PT PLN said Monday it signed credit
facilities worth a combined $1.061 billion with the Bank of China and the
Export-Import Bank of
China Exim will provide $481 million credit to PLN to build
three 350 MW power plants in
Bank of China will loan the firm $455 million to build three
plants, each of 315 MW capacity in Banten.
The credit facilities with the Chinese lenders will provide
85% of the US dollar portion of funding for the plants, with the remainder of
US dollar funding to be sourced from local banks, PLN said.
Finance Minister Sri Mulyani Indrawati said at the signing
ceremony for the credit facilities that the Indonesian government will fully
guarantee the loans.
Mitsubishi, Wika power plant project launched
The project was launched by Energy and Mineral Resources
Minister Purnomo Yusgiantoro on Wednesday morning in
Wika said in a press
statement that Mitsubishi Corporation will be the main contractor for the
project, while Wika was appointed by Mitsubishi to carry out civil construction
work with a total value of Rp387
billion.
The project will be funded by Japan International
Cooperation Agency (JICA) and is expected to be completed in 32.5 months.
The gas for the power plant will be supplied by
E. Java to develop micro hydropower plants
The
"Apart from that, the technology is also easy to learn
for the local community," East Java Governor Soekarwo said Thursday as he
officially launched the development of a PLTMH in Seloliman sub-district,
Trawas district, Mojokerto.
To realize the plan, Soekarwo said, his administration would
establish a regional guarantor institution tasked with providing guarantees to
both investors investing in the development of PLTMH and banks providing loans
for the projects.
"We will offer the projects to banks to help sub-district
administrations develop PLTMH in the province," he said.
The PLTMH in Seloliman, with investment of Rp450 million,
produces 14.7 kW to help economically challenged families in the region that
had so far remained untouched by PLN.
OIL & GAS
President urges oil firms to boost production
President Susilo Bambang Yudhoyono on Tuesday urged oil
contractors working in the country to intensify exploration and boost
production, Reuters reported.
"We are determined to boost our oil production. This
means that we will expand and intensify exploration. We have many basins yet to
be explored," Yudhoyono told the opening of the Indonesian Petroleum
Association (IPA) convention.
"We have developed a package of investment incentives
and established a prudent fiscal policy. We are formulating ways to overcome
tax problems in oil and gas resources investment," he said.
Oil and gas, Yudhoyono said, play strategic roles as
critical sources of energy and fuel for industries in the domestic market. “The
export of oil and gas continues to be an important source of revenue for the
state,” he added.
Both industries remain pillars of
He also said
"We will not stop exporting, of course...We have major
gas development projects that are expected to secure a steady supply of natural
gas for domestic and export needs," Yudhoyono said.
The president also witnessed the signing of 20 energy
contracts worth $1.4 billion, including 12 upstream oil and gas contracts worth
$219 million, five gas sales agreements worth $1.15 billion and three coal-bed
methane (CBM) contracts worth $26.9 million.
The largest oil and gas deal was a $45 million, three-year
contract for the Cendrawasih block in Papua, which involves Black Gold
Cendrawasih, ExxonMobil Exploration and Production Indonesia Cendrawasih. The
biggest CBM contract signed was for a block in Sangatta,
Govt. offers 24 new oil, gas blocks
The government is offering 24 new oil and gas blocks for
bids in an effort to boost the country's declining output, the Energy and
Mineral Resources Ministry said Thursday, Dow Jones reported.
The ministry said seven blocks are being offered through a
"direct offer mechanism through joint study." They are the Kubu
Block, North East Ogan Komering Block, Offshore West Java Block, Blora Block,
North Makassar Block, East Simenggaris Block and Digul Block.
The government is opening 17 blocks for regular tender in
the eastern part of the country, namely the
It set July 30 as the deadline for investors to bid on the
seven blocks, and October 13 for the 17 blocks, the ministry said.
Pertamina plans to invest $2B in 2009
State-owned oil and gas company PT Pertamina plans to
increase its investment by 25% to Rp22 trillion ($2 billion) this year, 65% of
which will be used to finance upstream projects, according to deputy president
director Omar S. Anwar, The Jakarta Post
reported.
"The future of the oil and gas industry is in the
upstream sector, and we don't want to be left behind; we have to focus on that
sector as well," Anwar said on the sidelines of the Asian Development
Bank's (ADB) annual general meeting over the weekend.
The company plans to double its investment budget to Rp41
trillion by 2012, again with a focus on upstream projects.
He added the upstream sector offered higher returns than the
downstream sector, which is more competitive.
Pertamina's returns from its downstream operation average
between 5 and 10%, while returns from the upstream industry reach 50%.
Medco seeks funding for Libyan oil field
Energy firm PT Medco Energi Internasional needs to borrow as
much as $250 million to finance the development of its Libyan oil project,
senior executives at the firm said on Friday, Reuters reported.
Medco Energi and Canadian partner Verenex have a 13.7%
interest in a production-sharing agreement in area 47 with
Medco's project director, Lukman Mahfoedz, said development
of the oil project in
“Medco will have to pay 25% of the total amount,” Mahfoedz
said, adding that oil reserves in the area 47 are estimated at about 307
million barrels.
He said the field is expected to begin producing oil at the
end of 2010 at about 50,000 barrels per day (bpd).
Donggi reserves may be lifted by new wells: Medco
PT Medco Energi Internasional, a member of the Donggi-Senoro
LNG consortium, said on Tuesday that the company was drilling two more wells to
add some 600 billion cubic feet to estimated gas reserves, The Jakarta Globe reported.
“We’ll continue exploring to find more gas. We are drilling
two more wells and expect them to add 600 billion cubic feet (bcf),” Lukman
Mahfoedz, president director of Medco E&P, said on the sidelines of the
33rd Indonesia Petroleum Association convention.
The block’s reserves are regularly estimated, he said,
adding that the more wells were drilled, the bigger the gas reserves the
company would find.
The consortium, which consists of state-owned oil and gas
company PT Pertamina, Japan’s Mitsubishi and Medco E&P, a unit of Medco
Energi, is expected to produce as much as 2 million tons of LNG a year from the
Matindok and Senoro fields.
MINING
Weda Bay Minerals, a consortium of Japanese and French
companies, and state nickel and gold miner PT Aneka Tambang (Antam) are
expected to invest $4.6 billion to develop a nickel mine in Weda Bay on
Halmahera Island, North Maluku, The
Jakarta Globe reported.
Alwin Syah Lubis, Antam’s president director, said
Paris-based Eramet, the operator of the world’s biggest ferronickel plant, and
Mitsubishi were joining the project.
Lubis said a feasibility study on the project was scheduled
for completion by early 2010.
“We sincerely hope Antam will be made the operator of the
project,” Lubis said, adding that the anticipated $4.6 billion investment could
also include a seaport, nickel smelter and refinery.
Eramet said in 2007 that it would spend about $2 billion to
begin mining at
An Eramet study has forecast output of 60,000 metric tons of
nickel a year from an ore body of more than 500 million tons.
Speaking separately, Muhammad Lutfi, the chairman of the
Investment Coordinating Board (BKPM), said the project was expected to help
boost foreign direct investment in the oil, gas and mining sector this year to
$7 billion.
The consortium, Lutfi said, is in the final stages of
closing the financing although he disclosed few details beyond saying the Japan
Bank for International Corporation will be involved in financing part of the
investment.
Govt. to take priority in Newmont share purchase
The government would have the first priority to purchase PT
Newmont Nusa Tenggara (NNT) shares, State Minister for State Enterprises Sofyan
Djalil said on Wednesday, Antara reported.
"Yes, the first priority to purchase NNT shares is
given to the government and the second priority to state-owned companies,"
he said after attending a seminar held by the Indonesia Petroleum Association.
Djalil did not disclose when exactly the government would
purchase the shares. "What is clear is that the government will buy them
but when it will be done has not yet been determined as it is all still being
discussed," he said.
When asked if local governments would also be given part of
the shares he said "yes", adding that the purchase was still being
coordinated.
President director of state-owned mining company PT Aneka
Tambang, Alwinsyah Lubis, said on Wednesday that his company was ready to buy
the shares to be divested by NNT, if the government would allow it to do so.
Several state-owned companies have expressed interest in
buying the shares.
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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
welcomed to forward it in its original form but no reproduction is allowed
without permission.