ECONOMY
New Push to Rationalize Banks
As China’s Industrial and Commercial
Bank of China (ICBC) was reported to be in talks
to buy an Indonesian bank, Bank Indonesia (BI)
Governor Burhanuddin Abdullah said the central
bank would introduce new regulations to
encourage further mergers in the sector.
He said BI expects the number of banks to shrink
to a total of between 70 and 80 by 2010 from
around 130 currently, Bisnis Indonesia
reported Tuesday (26/9/06).
Abdullah said around 50 banks are currently
facing difficulties in raising capital and are
expected to merge or be acquired by larger
institutions.
The new rules would provide incentives for
mergers, and rule on ways commercial banks
should treat loans to victims of natural
disasters.
"We hope to be able to issue the new regulations
soon. They will be published in a package of new
banking regulations," he said, according to
Reuters.
Abdullah said on Tuesday that China’s
state-owned ICBC is seeking to enter Indonesia's
bank sector, stating that the bank had signed a
memorandum of understanding with one bank.
The chief executive of ICBC, China's largest
lender by assets, confirmed last week at the
International Monetary Fund/World Bank meetings
in Singapore that it is seeking a stake in an
Indonesian bank, Abdullah told reporters.
A spokesman for ICBC in Beijing declined to
comment on any possible acquisition in
Indonesia.
Qatar Islamic Bank (QIB) may invest $100 million
to buy or set up a new bank in Indonesia, State
Enterprises Minister Sugiharto said.
"They may prefer to open a new bank. This has
already been discussed between them and the
Indonesian central bank who advised them to open
a new bank," said Sugiharto.
At Bank NISP, managing director Muliadi Hardja
said Singapore’s Overseas Chinese Bank Corp. (OCBC)
would use NISP, in which it owns 72%, as a
vehicle to acquire other banks and was currently
composing the criteria of banks to be acquired.
Commenting on Daihatsu’s decision announced in
August to invest a further $70 million in
Indonesia’s car industry, Johannes Loman, the
president director of PT. Daihatsu Sales
Operation, a subsidiary of PT Astra
International, told The Jakarta Post
that the Japanese subsidiary of Toyota Corp. had
decided to make Indonesia its regional
production base.
Loman said the automaker saw Indonesia as a
strong prospective market in its self, with a
long way to go to reach more developed markets
in terms of market saturation.
“The ratio of car ownership in Japan is now
1:1.8, meaning that every car is owned by 1.8
people. In Thailand it is 1:9 and in Malaysia
1:4.5. But in Indonesia it is still 1:35,” he
said.
Daihatsu has strong ambitions in Indonesia. “We
hope that we can become the pioneer in the
country's automotive industry,” said Loman,
adding that the automaker would continue to
concentrate on vehicles under 1500 cc and priced
around $15,000.
The State Enterprises Ministry signaled more
activity on privatization, saying the government
would sell stakes in 10 companies next year.
"About 10 state-owned companies are ready to go
public, pending the approval of the
privatization committee," secretary of the state
ministry, Said Didu, said, according to
Bisnis Indonesia.
Companies to be offered to the market were Bank
Tabungan Negara, Indonesia Power, Jasa Marga,
Wijaya Karya, Krakatau Steel subsidiary KHI Pipe
Industry, Pembangkitan Jawa Bali, Commet Plus
and Bank Syariah Mandiri.
Minister Sugiharto also announced that state gas
distributor PGN and the Islamic Development Bank
(IDB) had signed a memorandum of understanding
committing the IDB to help finance PGN's
projects.
State steelmaker PT Krakatau Steel had signed a
cooperation agreement with Saudi Arabia’s second
largest steelmaker, Al Tuwarqi, for the
construction of a steel plant in South
Kalimantan.
Special envoy of the president for Middle East
Alwi Shihab said at least six state companies
have signed memorandums with counterparts from
the United Arab Emirates, Saudi Arabia, Qatar
and Kuwait.
He was commenting after it was announced that
Qatar would invest some hundreds of millions in
infrastructure projects in Indonesia.
BUSINESS BRIEFS
MACROECONOMY
Room for October Rate Cut – BI
Easing inflationary pressure in
September will boost the likelihood of a cut in
the benchmark Bank Indonesia (BI) one-month rate
in October, central bank Deputy Governor Hartadi
Sarwano said Monday (25/9/06).
There is room for the inflation rate to ease in
September "because there are not big challenges
in the economic situation," Sarwano was quoted
as saying by Dow Jones Newswires. "There's room
for the Bank Indonesia rate to go down from this
level."
BI Governor Burhanuddin Abdullah said the
previous week that any movement in October in
the benchmark rate, currently at 11.25%, would
hinge on September consumer price index data.
The Central Bureau of Statistics will issue
August trade and September CPI data on October 2
while BI's Board of Governors will decide on any
benchmark rate moves at a regular monthly
meeting on October 5.
Sarwano said Indonesia's macroeconomic situation
is "on track" and would make the central bank's
end-2006 on-year CPI forecast achievable.
The impact of the annual upsurge in consumer
spending during the Islamic fasting month of
Ramadhan, which began September 24, won't derail
official inflation forecasts, he said.
"There are seasonal conditions like Ramadhan,
Idul Fitri and Christmas, but the impact of
seasonal conditions isn't big so the central
bank's inflation target can be achieved."
Short-Term Inflows Total $7b - BI
Current short-term investment inflows
into Indonesia's economy total about $7 billion,
Bank Indonesia (BI) Deputy Governor Aslim
Tadjuddin said Monday (25/9/06).
That figure included Rp10 trillion invested in
BI Certificates (SBIs), Rp56 trillion in
treasury bonds and the remainder in the
country's equity markets, Tadjuddin was quoted
as saying by Dow Jones Newswires.
President Susilo Bambang Yudhoyono cautioned in
his annual budget speech in August that
policy-makers needed to carefully manage those
inflows to prevent "economic turbulence" created
by investor sentiment swings.
Volatility resulting from a turn in investor
sentiment against riskier emerging markets
caused a 5.5% decline in the value of the rupiah
to the dollar in May.
Meanwhile, the Finance Department sold Rp125
billion worth of treasury bonds at its regular
debt auction with the weighted average yield
coming in at 11.3%, XFN-Asia reported on Tuesday
(26/9/06).
The paper sold comes from the reopening of an
earlier bond series, the FR0040, which matures
in 2025 and carries a coupon of 11%. It
replaces two older T-bond series that were to
mature in 2007 and 2009, treasury director Mulia
Nasution said.
"Bids were small because the market is bearish,"
he said, noting that the bids totaled just Rp300
billion.
INVESTMENT
Govt. to Offer 17m Ha of Forest
Concessions
Indonesia plans to offer some 17
million hectares of lapsed or unused forest
concessions to investors interested in
developing timber and farming estates, Forestry
Minister MS Kaban said Thursday (28/9/06).
"We will offer nine million hectares for timber
estates from forest concessions, which are no
longer productive," he was quoted as saying by
Agence France-Presse.
He said the move aims to boost timber production
and open up more job opportunities, with plots
to be given out for management for a period of
100 years, which would allow some 15 harvests of
trees such as acacias.
Some Rp9.7 trillion ($1 billion) from the
government's reforestation fund had been
allocated to prepare the land on Sumatra and
Sulawesi.
Institutions to manage the funds would first
need to be set up and could start work in
November, he said. He did not give details on
how the concessions would be determined or under
what terms.
Agriculture Minister Anton Apriyantono, speaking
on the same occasion, said the government is
also preparing 8.2 million hectares of land for
plantations and agriculture, particularly for
palm oil and sugar cane. He said the land had
been cleared some time ago.
The head of the land registry agency, Joyo
Winoto, said that about three million hectares
would be allotted for palm oil.
Bakrie to Build Infrastructure Projects
Publicly listed steel pipe maker PT
Bakrie & Brothers said it will set aside $4.81
billion to finance nine infrastructure projects
it hopes to build until 2010.
Three of the nine projects are toll road
projects in Java, which will cost $810 million
and will be offered in the Infrastructure Summit
in November, company secretary Juliandus Tobing
said, according to Antara.
The three toll road projects are
Kunciran-Serpong, to cost $190 million;
Cimanggis-Cibitung, $340 million, and
Serpong-Cinere at $280 million, Tobing said.
Bakrie & Brothers has already been awarded the
Tanjung Jati A power project, to cost $1.4
billion and a gas pipeline project spanning the
sea between East Kalimantan and Central Java, to
cost $1.26 billion.
SOEs
Dirgantara Signs Contracts Worth
Rp125.4b
State-owned aircraft manufacturer, PT
Dirgantara Indonesia has signed three new
contracts with the Defense Department for the
supply of one aircraft and three helicopters to
the Navy and Army.
The company said Monday (25/9/06) that the
contracts, worth up to Rp125.4 billion ($13.6
million), were for the supply of an NC212-200
aircraft, two NBO-105 helicopters and an
NBELL-412 helicopter to the Defense Department,
The Jakarta Post reported.
PRIVATE SECTOR
Textile Producers Call for FTA with US
The Association of Textile Producers
(API) has urged the government to push for a
free trade agreement (FTA) with the US.
The call came after the two countries signed a
memorandum of understanding to jointly fight
illegal transshipments through Indonesia of
third country textiles. "We hope the signing of
the agreement will lead to the signing of an FTA,"
API secretary Ernovian G Ismy was quoted as
saying by Antara.
Trade Minister Mari Pangestu signed the
agreement with US Trade Representative Susan
Schwab to work together to stop the
transshipment of textiles from countries without
access to the US market through Indonesia.
"Transshipments have jeopardized Indonesia's
legitimate textile and apparel exports by taking
up market space in the United States," Schwab
said at a ceremony to sign the pact.
Pangestu said the textile accord was part of a
"building block" approach to increasing trade
ties with the US.
Indonesian exports of textiles and garments to
the US have continued to increase -- up 26.7% to
$2.17 billion in the first seven months of the
year from the same period last year.
Samsung Optimistic on Boosting Sales
PT Samsung Electronics Indonesia said
it is optimistic that it can reach its target to
boost sales of its consumer electronics in the
country by 25% this year despite the economic
slowdown.
Marketing director of the company Stefanus
Indrayana said that in the first eight months of
the year, sales of its household electronics
grew by 20% on average, Antara reported on
Thursday (28/9/06)
Indrayana predicted the market condition will
improve in the last quarter of this year, with
total sales this year more or less the same as
last year.
He acknowledged that sales in the first eight
months of the year fell compared with the same
period last year, but increases were recorded
for certain products.
BANKS
Clearing System to Help Track Illegal
Transactions
The National Clearing System designed
to save more accurate banking information can
help investigators uncover illegal bank
transactions, Bank Indonesia (BI) Deputy
Governor Maulana Ibrahim said recently.
The system, which saves information on customer
data and time of transfers, the recipients of
money transfers, as well as operator identity,
has enabled the central bank to have more
complete data on transactions, Ibrahim said,
according to Antara.
Highly confidential computer identity and data
as well as operator passwords are registered at
BI's main server. "With the data, BI can give a
better contribution to investigators in their
efforts to uncover funds suspected to come from
illegal transactions," he said.
Ibrahim was talking after a ceremony dedicating
the National Clearing System in Medan, Padang
(West Sumatra), Banjarmasin (South Kalimantan),
Sibolga (North Sumatra), Batam (Riau), Pekanbaru
(Riau), Pontianak (West Kalimantan), Kendari
(Southeast Sulawesi) and Palu (Central Sulawesi).
The nine BI regional offices are the latest to
be connected to the system, by which all BI
regional offices become integrated under a
clearing system.
Ibrahim said data on transactions would be
provided to investigators upon request, or to
the state under the prevailing regulations.
ABN Amro to Open Shariah Unit
ABN Amro NV said it plans to open a
shariah unit in Indonesia in the first half of
2007, its country executive, Henk G Mulder said.
"ABN Amro already has shariah units in Dubai and
Pakistan and we hope to open one in Indonesia,"
Mulder was quoted as saying recently by Antara.
POWER
Bukit Asam to Complete 2 Plants in 2010
State-owned coal mining company PT
Tambang Batubara Bukit Asam said it will start
building two coal-fired power plants in South
Sumatra.
The company will build a 200-MW plant in Lahat
regency, expected to be completed by 2009, and a
2,400-MW plant in Muara Enim regency, expected
to be completed by 2010, company manager Eko
Hadianto was quoted as saying by Antara.
Bukit Asam will supply the coal. The Lahat
plant will need about 1.5 million tons of coal a
year.
OIL AND GAS
Govt. to Spend $1.4b for Bio-diesel in
2007
The government will set aside Rp13
trillion ($1.42 billion) from its 2007 state
budget to help spur private sector initiatives
aimed at hitting an overall bio-diesel output
target of 250,000 to 300,000 metric tons a year,
an industry official said Monday (25/9/06).
Such funding would be a first for the
government, which has never allocated any part
of its budget for the bio-diesel sector.
The budgetary allocation will be broken down
into Rp10 trillion in infrastructure subsidies,
Rp2 trillion in subsidies for seed purchases,
and Rp1 trillion in interest breaks offered to
bio-fuel investors, the chief of the
government-backed National Bio-fuel Promotion
team, Alhilal Hamdi, said, according to Dow
Jones Newswires.
Hamdi said the government next year would seek a
further Rp15 trillion to Rp20 trillion ($1.64
billion to $2.2 billion) from banks for bio-fuel
development.
President Susilo Bambang Yudhoyono said earlier
this year that the country ought to prioritize
development of bio-fuels -- blends of vegetable
oil and fossil fuel -- as a potential solution
to many economic and social problems.
Meanwhile, air pollution levels are high in many
of the country's urban hubs, and bio-fuels'
cleaner emissions are seen as a way of
alleviating this problem. The government sees
increased need for bio-fuel feedstocks as a
source of job creation, which could help to
reduce poverty and unemployment in the sprawling
archipelagic nation.
Tatang H Soerawidjaja, chairman of the
Indonesian Bio-diesel Forum, said recently that
the government would offer Rp10 trillion ($1.1
billion) in subsidies for developers of
transport infrastructure, such as roads and
ports to ensure a ready supply of bio-fuel
feedstocks from remote plantation areas.
Soerawidjaja said the government will also offer
companies investing in the bio-fuels sector Rp1
trillion in "interest incentives", whereby the
government subsidizes part of those companies'
interest repayments on bank loans used to fund
their investments.
Hamdi said some 19.7 million hectares of
plantation area in Indonesia are suitable for
the propagation of bio-fuel feedstocks such as
palm oil, jatropha and cassava.
While Indonesia's fast-growing bio-fuel sector
has so far focused primarily on bio-diesel,
which can be burned in some diesel engines, the
country could see construction start on its
first ethanol plant at the end of next year, he
said. Ethanol is a bio-fuel that can be used in
some gasoline-burning cars.
A Pertamina spokesman said recently that it is
researching ethanol development in Indonesia,
but that few available car models in Indonesia
can run on the fuel. Pertamina already sells a
5% bio-diesel blend in many of its gasoline
service stations in Jakarta.
Meanwhile, executive chairman of the Indonesian
Palm Oil Association, Derom Bangun, said on
Monday (25/9/06) that bio-diesel projects would
not be hit by the fall in crude oil prices as
investors feel the current dip is temporary and
prices will bounce back.
"Even if crude oil prices go down for a while,
people believe after one or two years they will
again go up," he said. Developments in
bio-diesel will continue and investments on new
plants will not be hampered. It is not the
government but private investors who will decide
when and where to build bio-diesel plants."
Bangun said Indonesia expects six new bio-diesel
plants to be in operation by 2007, and about
500,000 tons of bio-diesel to be produced from
three of these plants by early next year. He
estimated about 600,000 tons of palm oil would
be used for bio-diesel production in Indonesia
in 2007.
Indonesia to Halve LNG to Japan
Indonesia has notified Japanese
companies that it intends to reduce exports of
liquefied natural gas (LNG) to Japan by as early
as 2010, sources said Thursday (28/9/06),
according to The Daily Yomiuri.
The two sides have already entered into
negotiations on the reduction plan, which will
be implemented when current long-term export
contracts expire, the sources said.
LNG imports from the Bontang plant in
Kalimantan, which account for more than 90% of
overall LNG imports from Indonesia, will be
reduced dramatically, according to the sources.
Japanese companies such as Tokyo Gas Co and
Kansai Electric Power Co, which signed long-term
deals to import a total of 14.54 million tons of
LNG annually from the plant, will see contracts
on about 12 million tons expire from 2010
through 2011.
2006 Fuel Consumption Lower than
Predicted
Indonesia expects to consume 37.9
million kiloliters (kl) (238 million barrels) of
subsidized fuel this year, lower than previous
estimates of 41.6 million kl, due to lower
domestic demand, an official at the state oil
firm, PT Pertamina said on Monday (25/9/06).
"Domestic consumption is lower than earlier
predicted because the government raised oil
product prices last October," the official, who
declined to be identified, told Reuters.
The official said consumption of subsidized
gasoline is likely to fall slightly to 17
million kl from 17.1 million kl and diesel oil
is seen down to 11 million kl from 14.5 million
kl estimated earlier. Subsidized kerosene
consumption is likely to be slightly lower at
9.9 million kl compared with an earlier estimate
of 10 million.
Govt. to Open 40-50 Blocks
The government plans to invite
interested companies for direct negotiations
over 40 to 50 exploration blocks in the
country's frontier areas next year, a mines and
energy official said Thursday (28/9/06).
While Indonesia has embraced the open tender
system for awarding exploration blocks, it
occasionally still parcels out a few based on
direct negotiations with the interested parties.
"Major oil companies, including ExxonMobil,
Chevron, Conoco and Total, are interested in
exploring our oil and gas blocks in frontier and
deep sea areas. They are difficult areas, but
may be interesting for them," Priyono said,
according to Platts Commodity News.
Most of the challenging acreages are located in
southern Java, western Sumatra, Kalimantan,
Sulawesi and Nusa Tenggara, Priyono said.
Under Indonesia's direct-offer mechanism, a
company interested in a block that has not been
offered for open bidding, can take its interest
to the government. After discussions with the
company, the government opens up the block for a
limited period to seek competitive offers. The
most competitive offer wins. If there are no
rivals, the original company wins the block.
ExxonMobil, Total, Chevron, ConocoPhillips,
Malaysia's Petronas, Italy's Eni, China's CNOOC
and Amerada Hess of the US have expressed
interest in some of the blocks, Priyono said
earlier.
Genting Unit Finds Gas in Natuna Block
Genting Oil & Gas Ltd, a unit of
Malaysia's Genting Bhd, has discovered gas with
the successful completion of the drilling of
exploration well Anambas-1X in West Natuna,
reported Dow Jones Newswires.
Both dry gas and gas condensate were found, the
company said in statement Monday (25/9/06).
Tests found a gas flow of 15.6 million cubic ft
of gas a day and a condensate flow of 488
barrels of condensate a day. Drilling commenced
July 9.
Further evaluation of the results will be taken
to determine the reserve size, development
potential and commercial viability of the
discovery.
The Anambas Block is 100% operated by Genting's
Oil & Gas' wholly owned unit Sanyen Oil & Gas
Pte Ltd under a production-sharing contract with
upstream oil and gas regulator BP Migas.
Genting's oil and gas division will shortly
begin the drilling of two more exploratory
wells, 90 km to the north of Anambas-1X, in the
oil-rich Northwest Natuna Block.
MINING
BDI Mining Finds Rare Blue Diamond
BDI Mining Corp announced on Monday
(25/9/06) that it has recovered a rare 3.02
carat blue diamond from its Cempaka alluvial
diamond mine in southeast Kalimantan, Dow Jones
Newswires reported.
The company recovered the intense-blue diamond
from its Indonesian mining operations, where
more than 50,000 carats of gem-quality diamonds
have been recovered since mining operations
began in March 2005. Blue diamonds, along with
green and red stones, are considered to be among
the rarest and most valuable of all diamonds.
"The recovery of such a stone is very much a
highlight for the mine and the company,” BDI
Mining chairman, David Lenigas said.
"Given the intense color of the stone and
therefore its rarity, we have decided to
christen the diamond 'Chelsea Blue',” he said,
adding that it will be sold by private tender
within the coming months.
The discovery of the Chelsea Blue comes at a
time when the expansion of the Cempaka
operations are progressing as planned. The
processing facilities upgrade is scheduled for
completion within the next two weeks and the
initial mining expansion phase of the Cempaka
main channel is well advanced.
AFX reported that BDI Mining narrowed its pretax
loss to $2.22 million in the first half of the
year from $3.38 million a year earlier. The
company said average monthly recoveries of
3,500-4,000 carats prove that the operational
systems adopted at Cempaka are “extremely
effective in the difficult mining conditions
encountered locally and provide us with the
confidence to move forward as we seek to develop
the mine.”
Thai Banpu to Improve Water Treatment
Thailand's largest coal miner, Banpu
PCL, said Thursday (28/9/06) improvements in
water treatment at its Trubaindo mine in
Indonesia following complaints would not disrupt
production.
Banpu said in a statement it was told by
Indonesian authorities to improve the quality of
water in one of the 10 ponds at the mine after
an investigation following complaints of
pollution indicated high acid levels.
The investigation showed the water quality in
most of the mine's 10 ponds complied with
industry regulations and the Trubaindo mine is
expected to complete improvements and report
back to the authorities shortly, it said,
according to Reuters.
Banpu has six mines in Indonesia, two in China
and two in Thailand and has said it aims to
raise sales to 21 million tons this year from 17
million tons last year.
Local Govt. May Buy 3% Newmont Stake
West Nusa Tenggara’s West Sumbawa
regency can proceed to acquire a 3% stake in
Newmont Mining unit PT Newmont Nusa Tenggara
after the central government decided not to buy
it, a government official said.
Finance Minister Sri Mulyani Indrawati has
confirmed that the central government will not
proceed with the purchase, the Mines and Energy
Department’s Director General for Geology and
Mineral Resources, Simong Sembiring, said,
according to XFN-Asia.
Under the terms of a contract struck between the
government and the Newmont unit, the foreign
owners must gradually reduce their holding,
starting from the sixth year of operation, to
49% by the end of the tenth year. The first
reduction has to take place this year.
Newmont Nusa Tenggara is an 80%-20% joint
venture between Nusa Tenggara Partnership and
local firm PT Pukuafu Indah. Nusa Tenggara
Partnership is 56.25% owned by Newmont Indonesia
Ltd and 43.75% by Sumitomo.
Separately, Newmont Nusa Tenggara spokesman
Kasan Mulyono said the firm paid the government
$101 million last year in taxes, non-taxes and
royalties. He said the firm produced 550
million pounds of copper and 500,000 oz of gold
last year from its Batu Hijau mine on Sumbawa.
and investments on new plants will not be
hampered. It is not the government but private
investors who will decide when and where to
build bio-diesel plants."
Bangun said Indonesia expects six new bio-diesel
plants to be in operation by 2007, and about
500,000 tons of bio-diesel to be produced from
three of these plants by early next year. He
estimated about 600,000 tons of palm oil would
be used for bio-diesel production in Indonesia
in 2007.
Indonesia to Halve LNG to Japan
Indonesia has notified Japanese
companies that it intends to reduce exports of
liquefied natural gas (LNG) to Japan by as early
as 2010, sources said Thursday (28/9/06),
according to The Daily Yomiuri.
The two sides have already entered into
negotiations on the reduction plan, which will
be implemented when current long-term export
contracts expire, the sources said.
LNG imports from the Bontang plant in
Kalimantan, which account for more than 90% of
overall LNG imports from Indonesia, will be
reduced dramatically, according to the sources.
Japanese companies such as Tokyo Gas Co and
Kansai Electric Power Co, which signed long-term
deals to import a total of 14.54 million tons of
LNG annually from the plant, will see contracts
on about 12 million tons expire from 2010
through 2011.
2006 Fuel Consumption Lower than
Predicted
Indonesia expects to consume 37.9
million kiloliters (kl) (238 million barrels) of
subsidized fuel this year, lower than previous
estimates of 41.6 million kl, due to lower
domestic demand, an official at the state oil
firm, PT Pertamina said on Monday (25/9/06).
"Domestic consumption is lower than earlier
predicted because the government raised oil
product prices last October," the official, who
declined to be identified, told Reuters.
The official said consumption of subsidized
gasoline is likely to fall slightly to 17
million kl from 17.1 million kl and diesel oil
is seen down to 11 million kl from 14.5 million
kl estimated earlier. Subsidized kerosene
consumption is likely to be slightly lower at
9.9 million kl compared with an earlier estimate
of 10 million.
Govt. to Open 40-50 Blocks
The government plans to invite
interested companies for direct negotiations
over 40 to 50 exploration blocks in the
country's frontier areas next year, a mines and
energy official said Thursday (28/9/06).
While Indonesia has embraced the open tender
system for awarding exploration blocks, it
occasionally still parcels out a few based on
direct negotiations with the interested parties.
"Major oil companies, including ExxonMobil,
Chevron, Conoco and Total, are interested in
exploring our oil and gas blocks in frontier and
deep sea areas. They are difficult areas, but
may be interesting for them," Priyono said,
according to Platts Commodity News.
Most of the challenging acreages are located in
southern Java, western Sumatra, Kalimantan,
Sulawesi and Nusa Tenggara, Priyono said.
Under Indonesia's direct-offer mechanism, a
company interested in a block that has not been
offered for open bidding, can take its interest
to the government. After discussions with the
company, the government opens up the block for a
limited period to seek competitive offers. The
most competitive offer wins. If there are no
rivals, the original company wins the block.
ExxonMobil, Total, Chevron, ConocoPhillips,
Malaysia's Petronas, Italy's Eni, China's CNOOC
and Amerada Hess of the US have expressed
interest in some of the blocks, Priyono said
earlier.
Genting Unit Finds Gas in Natuna Block
Genting Oil & Gas Ltd, a unit of
Malaysia's Genting Bhd, has discovered gas with
the successful completion of the drilling of
exploration well Anambas-1X in West Natuna,
reported Dow Jones Newswires.
Both dry gas and gas condensate were found, the
company said in statement Monday (25/9/06).
Tests found a gas flow of 15.6 million cubic ft
of gas a day and a condensate flow of 488
barrels of condensate a day. Drilling commenced
July 9.
Further evaluation of the results will be taken
to determine the reserve size, development
potential and commercial viability of the
discovery.
The Anambas Block is 100% operated by Genting's
Oil & Gas' wholly owned unit Sanyen Oil & Gas
Pte Ltd under a production-sharing contract with
upstream oil and gas regulator BP Migas.
Genting's oil and gas division will shortly
begin the drilling of two more exploratory
wells, 90 km to the north of Anambas-1X, in the
oil-rich Northwest Natuna Block.
MINING
BDI Mining Finds Rare Blue Diamond
BDI Mining Corp announced on Monday
(25/9/06) that it has recovered a rare 3.02
carat blue diamond from its Cempaka alluvial
diamond mine in southeast Kalimantan, Dow Jones
Newswires reported.
The company recovered the intense-blue diamond
from its Indonesian mining operations, where
more than 50,000 carats of gem-quality diamonds
have been recovered since mining operations
began in March 2005. Blue diamonds, along with
green and red stones, are considered to be among
the rarest and most valuable of all diamonds.
"The recovery of such a stone is very much a
highlight for the mine and the company,” BDI
Mining chairman, David Lenigas said.
"Given the intense color of the stone and
therefore its rarity, we have decided to
christen the diamond 'Chelsea Blue',” he said,
adding that it will be sold by private tender
within the coming months.
The discovery of the Chelsea Blue comes at a
time when the expansion of the Cempaka
operations are progressing as planned. The
processing facilities upgrade is scheduled for
completion within the next two weeks and the
initial mining expansion phase of the Cempaka
main channel is well advanced.
AFX reported that BDI Mining narrowed its pretax
loss to $2.22 million in the first half of the
year from $3.38 million a year earlier. The
company said average monthly recoveries of
3,500-4,000 carats prove that the operational
systems adopted at Cempaka are “extremely
effective in the difficult mining conditions
encountered locally and provide us with the
confidence to move forward as we seek to develop
the mine.”
Thai Banpu to Improve Water Treatment
Thailand's largest coal miner, Banpu
PCL, said Thursday (28/9/06) improvements in
water treatment at its Trubaindo mine in
Indonesia following complaints would not disrupt
production.
Banpu said in a statement it was told by
Indonesian authorities to improve the quality of
water in one of the 10 ponds at the mine after
an investigation following complaints of
pollution indicated high acid levels.
The investigation showed the water quality in
most of the mine's 10 ponds complied with
industry regulations and the Trubaindo mine is
expected to complete improvements and report
back to the authorities shortly, it said,
according to Reuters.
Banpu has six mines in Indonesia, two in China
and two in Thailand and has said it aims to
raise sales to 21 million tons this year from 17
million tons last year.
Local Govt. May Buy 3% Newmont Stake
West Nusa Tenggara’s West Sumbawa
regency can proceed to acquire a 3% stake in
Newmont Mining unit PT Newmont Nusa Tenggara
after the central government decided not to buy
it, a government official said.
Finance Minister Sri Mulyani Indrawati has
confirmed that the central government will not
proceed with the purchase, the Mines and Energy
Department’s Director General for Geology and
Mineral Resources, Simong Sembiring, said,
according to XFN-Asia.
Under the terms of a contract struck between the
government and the Newmont unit, the foreign
owners must gradually reduce their holding,
starting from the sixth year of operation, to
49% by the end of the tenth year. The first
reduction has to take place this year.
Newmont Nusa Tenggara is an 80%-20% joint
venture between Nusa Tenggara Partnership and
local firm PT Pukuafu Indah. Nusa Tenggara
Partnership is 56.25% owned by Newmont Indonesia
Ltd and 43.75% by Sumitomo.
Separately, Newmont Nusa Tenggara spokesman
Kasan Mulyono said the firm paid the government
$101 million last year in taxes, non-taxes and
royalties. He said the firm produced 550
million pounds of copper and 500,000 oz of gold
last year from its Batu Hijau mine on Sumbawa.
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