May 03, 2007
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Indonesia's Trade and Investment News, 30 April 2007
Highlights Politics
Economy
Business briefs
Investment
State concerns
SOEs
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POLITICS Jakarta, Singapore Sign Extradition Treaty
Indonesia and
Singapore signed an extradition treaty on Friday (27/4/07) after
years of talks on an agreement that Jakarta hopes will help it
prosecute fugitive business executives. Ex-Bulog Chief on New Charge The Attorney General's Office on Wednesday (25/4/07) declared former State Logistics Agency (Bulog) head Widjanarko Puspoyo and his brother Widjokongko Puspoyo official suspects in a corruption case involving rice imports from Vietnam between 2001 and 2002.
Junior Attorney General for Special Crimes Hendarman Supandji said his office will name more suspects in the coming weeks in a case that involves alleged graft in the transfer of $1.5 million from the Vietnamese exporter to several private accounts belonging to or connected with Widjanarko's family.
"This is the first step and there's always the possibility of more suspects ahead," he told reporters in Jakarta.
It was not clear whether prosecutors would immediately detain Widjokongko, although they said he had been prohibited from leaving the country.
Widjanarko himself has been in detention since March after he was named a suspect in another graft case, this one revolving around Rp11 billion ($1.2 million) Australian cattle import scandal in 2001.
The AGO has so far questioned Widjanarko's immediate family members, including first wife Endang Ernawaty, son Rinaldy, daughter Winda Nindiaty Djuanda and her husband, Andre Djuanda, and second wife Ely.
The rice import case involves the transfer of $1.2 million to an account belonging to Widjokongko between 2002 and 2003.
It is suspected that the money was a gift in return for the Bulog chief selecting a certain Vietnamese company to carry out the imports.
The account, which has been frozen, is held at a branch of Bank Bukopin. Several other accounts in a total of three banks have also been deactivated.
Witoelar Appeals to Big CO2-Emitter Nations Big nations such as the United States, China and India should sign on to the next global climate treaty that will replace the Kyoto accord on greenhouse gas emissions, Environment Minister Rachmat Witoelar said in Copenhagen on Tuesday (24/4/07), the Associated Press reported.
"I don't see how they cannot join," Witoelar told an environmental conference. "The most important thing is whether these countries are aware that there is a danger posed by climate change."
His Danish counterpart, Connie Hedegaard, who was hosting the two-day conference of European and Asian environmental officials, concurred.
"It is a European priority to get as many countries and contributors on board as possible," Hedegaard said. "And that includes of course China and India."
She said she hoped delegates would back Denmark's efforts to achieve a new climate treaty at a UN climate summit in Copenhagen in 2009.
Witoelar called that goal "realistic," adding that action was needed soon. "We cannot quarrel while the boat is capsizing."
The Kyoto Protocol, a UN treaty which expires in 2012, requires 35 industrial nations to cut emissions of carbon dioxide and other harmful gases collectively by 5% from 1990 levels.
The US, which is responsible for about one-quarter of the world's greenhouse gas emissions, has rejected Kyoto, saying it would hurt its economy. It also objects that the protocol allows exemptions for rapidly industrializing economies like China and India.
China, the world's biggest producer and user of coal, is expected to overtake the US as the world's largest carbon dioxide emitter within the next several years.
Witoelar said Indonesia was already seeing the effect of climate change in devastating droughts and flooding.
REGIONS Coordination in Air Traffic Services The Indonesian government is planning to use the air traffic control (ATC) services of other countries such as the Philippines and India to compliment its own controllers in Jakarta and Makassar to ensure the safety of all international flights in Indonesian airspace, The Jakarta Post reported.
"Indonesia is seeking backup air traffic control and management services in case its two ATCs fail to work at the same time," said International Civil Aviation Organization (ICAO) air traffic management regional officer Kyotaro Harano.
Harano was speaking Wednesday (25/4/07) at the start of a three-day meeting on an air traffic management contingency plan with the Transportation Ministry, state-owned airport operators PT Angkasa Pura (AP) I and II and officials from various countries.
"Right now, if the Jakarta ATC was to shut down, then the Makassar ATC could cover its activities and vice versa," Harano told reporters. "A contingency plan is needed for Indonesia, which has a vast amount of space to monitor, so international flights can continue."
Jakarta's area control center, managed by AP II, oversees air traffic for western Indonesia, while the Makassar center in South Sulawesi, managed by AP I, oversees air traffic for Indonesia's eastern regions.
Air traffic control units coordinate aircraft flight paths both on the ground and in the air to prevent collisions and other accidents. An ATC also provides information to pilots, such as on weather, navigation and "notices to airmen".
"Both controllers have sophisticated systems. The tragic events surrounding the Indonesian aviation industry in the recent past have had nothing to do with the ATCs," Harano said.
The ICAO, which is currently providing assistance to Indonesia, said that other countries might follow in the footsteps of Indonesia if its project was a success.
Japan Allocates $155M to Combat Bird Flu The Japanese government has allocated $155 million since 2004 to combat bird flu virus as well as to improve human and poultry health in Indonesia.
The assistance has been collected from the Japan Policy and Human Resources Development Fund (PHRD), the Japan Special Fund of the Asian Development Bank, the Asian Regional Program and the World Bank, deputy Japanese Ambassador Satoru Satoh told Antara Friday (27/4/07).
Some $11 million of the $155 million has already channeled to the Indonesian government.
Last January Japanese Prime Minister pledged a commitment to providing Indonesia with $67 million to combat the avian influenza virus which is responsible for the deadly bird flu illness.
The Japanese government has already established disease investigation centers in Medan and Yogyakarta at a total cost of $7.7 million and has equipped other Indonesian areas with equipment to fight the bird flu virus.
It has also provided training, hundreds of thousands of antiviral immunization doses, influenza test kits and private prevention methods for a total cost of $29 million.
It has actively provided the Research and Development Center of the Indonesian Health Ministry with equipment and financial support worth $3.5 million to implement the avian influenza eradication program.
Villagers to Relocate from Elephant Habitat Thousands of villagers will be relocated on Sumatra after wild elephants repeatedly attacked their villages killing six people, officials said Wednesday (25/4/07).
The local government will move about 10,000 people living in Bukit Barisan National Park, a protected habitat for the animals whose numbers on the island are fast diminishing, the Associated Press reported.
Villagers in the past have co-existed with the elephants in the 363,000 hectare park, which has been declared a World Heritage Site. But new communities were springing up in the park, encroaching on the animals' habitat and causing a series of violent clashes, an official at the Lampung provincial forestry office said.
Conservation group WWF said the elephants had trampled six people to death in the park in the past 12 months and destroyed villages and crops. Nurchalis Fadli of WWF added that it appeared the same six female elephants were involved the clashes, although it was unclear why. "It was not their fault. The incidents have occurred in the elephants' natural habitat," Fadli told Agence France-Presse.
He added the relocation of the villagers was a huge task, as they had built communities and were farming crops.
ECONOMY Banks Lift Spending First quarter results show that most banks are lending more this year, with banks posting gains of between 7% and 17% in loans.
Bank Rakyat Indonesia (BRI) was one of the most aggressive, expanding loans by 19% to Rp91 trillion (around $1 billion), while private Bank Danamon was the most aggressive private sector banks with an increase of 18% to a total Rp43.1 trillion in loans.
Bank Permata boosted lending by 7% in the first quarter, and Bank Niaga pushed its total loans 9% higher.
Loans disbursed by Bank Mandiri, the nation’s largest bank by assets, grew 8.8% year-on-year to Rp114.31 trillion at end March, but were down slightly from Rp117.67 trillion at the end of last year, the bank announced earlier.
Profits at the major banks were also up, with only Bank Internasional Indonesia reporting a decline of 10% in first quarter profit to Rp201 billion, despite lending growth of 14% to Rp26.4 billion from the same period last year.
It was not clear where the banks were directing the new loans. Bank Central Asia said it was planning to boost lending in the property market, where there was increasing demand as interest rates fell.
Vice President Jusuf Kalla called on the private sector to incorporate social responsibility programs that could create more jobs and narrow the social divide.
Opening a conference on Corporate Social Responsibility on Thursday (26/4/07), he said business should cooperate with government to improve the lives of the general populace, The Jakarta Post reported.
In a move hailed by analysts, the government said Monday it was eliminating import taxes on automotive raw materials to help build the automotive industry.
"The import tax on raw materials for automotive components will be 0% effective May 3," the Finance Department said in a statement, according to Dow Jones Newswires. The cut is expected to boost interest in the industry, already chosen by a number of major producers as a regional production center.
In another effort to push greater growth in the real sector, State Enterprises Minister Sugiharto called on state-owned enterprises to spend more on development to assist wider growth in the market.
Transportation Minister Hatta Radjasa said Thursday his department would be spending Rp9 trillion to renew worn-out railway tracks, another project likely to bring a positive and direct impact on job creation.
The government also had its eye on more long-term growth. On Monday, it officially unveiled its long-term development plan, which envisages the current high poverty rate falling to 5% and per capita income soaring to up to $9,000 by 2025.
The plan is set out in the newly endorsed Law No 17/2007. National Development Planning Board (Bappenas) chairman Paskah Suzetta said all future governments within the timeframe of the legislation would have to use it as the basis for their policies.
Under the long-term development plan, the government is targeting an increase in per capita income to between $3,000 and $9,625 by 2025. BPS figures show that per capita income was $1,663 last year.
BUSINESS BRIEFS MACROECONOMY Govt. Sets Ambitious Targets in Long-Term Plan The government officially unveiled its long-term development plan on Monday (23/4/07), which envisages the current high poverty rate falling to 5% and per capita income soaring to up to $9,000 by 2025.
The economic blueprint set out in the newly endorsed Law No 17/2007 on the 2005-2025 National Long-Term Development Plan was officially unveiled by National Development Planning Board (Bappenas) chairman Paskah Suzetta.
"We will work hard to achieve these targets. Every administration in the future will have to base their programs on this vision. This is not merely a discourse, it is the law," he said in his speech during the launch, according to The Jakarta Post.
The poverty rate stood at about 17% of the country's 220 million people last year, according to the Central Bureau of Statistics (BPS), which officially categorizes people living below the poverty line as those who earn less than $1.55 a day.
Under the long-term development plan, the government is targeting an increase in per capita income to between $3,000 and $9,625 by 2025, which would place Indonesia within the ranks of middle-income countries.
BPS figures show that Indonesia's per capita income was $1,663 last year, meaning that the country is categorized by the World Bank as a lower-middle-income country.
The government has allocated Rp51 trillion ($5.6 billion) for poverty-alleviation programs in the 2007 national budget, and plans to raise the figure to Rp80 trillion in next year's budget. "But increased spending on poverty eradication is not a universal panacea for tackling this problem. We must also invite the private sector to take part in the effort," Suzetta explained.
Government efforts to eliminate rules and regulations that impeded the private sector from doing business were also important as economic growth is essential to providing more jobs, thus leading to less poverty, he said.
"For 2007-2008, President Susilo Bambang Yudhoyono is determined to boost economic growth so as to reduce poverty and unemployment," he added.
The long-term economic plan also stresses the need to create an attractive investment climate to boost foreign investment and support economic growth.
The government recently launched a number of new poverty alleviation programs, including the National People's Empowerment Program (PNPM) and the Family Hope Program (PKH). Both are being partly financed by soft loans from the World Bank and the Japan Bank for International Cooperation (JBIC).
The law's targets and priorities are divided into four development periods: Period I (2005-2009), Period II (2010-2014), Period III (2015-2019) and Period IV (2020-2024).
The main goals are raising per capita income to the level of middle-income countries, and reducing poverty rate to less than 5%; improving the quality of human resources, including the enhancement of women's roles in development; ensuring a stable economy, with agriculture and mining being prioritized; bringing about integration of infrastructure in the transportation and energy sectors; and ensuring clean governance backed by professional administrators.
Q1 Growth Ahead of BI Prediction – BPS Central Bureau of Statistics (BPS) chief Rusman Heriawan estimated that Indonesia`s economic growth in the first quarter of the year will surpass the central bank`s expectation of 5.4% but doubted it will exceed the Finance Department`s projection of 5.7% to 5.9%.
There are many reasons to believe that the economy would perform better in the first three months of 2007, Heriawan was quoted as saying by Antara on Tuesday (24/4/07).
In the three months ending last March 31, exports grew by more than 10% while investment rose by 27.16%, he said. Private consumption, expected to contribute 60% of the economic growth, was also on the rise, he added.
"Based on our preliminary calculation, economic growth has already exceeded 5.4%. But I don’t know whether it will go beyond 5.7% to 5.9%," he said.
Finance Minister Sri Mulyani Indrawati reiterated that with encouraging increases in consumption, exports and investment during the first three months of the year, the economy is well on track for higher growth of between 5.7% and 5.9%, The Jakarta Post reported.
"Things are generally improving in all areas of the economy that contribute to growth," she said. "We will still keep a watch on rice prices. But it seems that in April and May, the rice market will be better than earlier."
The indicators in the real sector monitored through value-added tax and income tax payments and trade flows showed an upward trend particularly in March, she said.
The government’s expenditures on goods and capital in the first quarter of 2007 were higher than those in the same periods in the past two years, she said.
INVESTMENT Govt. Sets Aside 6.1m Hectares for Oil Palm The government is reserving 6.1 million hectares of land for oil palm plantations to meet growing demand for crude palm oil, State Minister for State Enterprises Sugiharto said.
He said land has been set aside in Kalimantan, Papua and other areas, and that the government hopes to boost the country's CPO production so that growing additional supplies for the bio-fuel industry will not affect stability in domestic supply, Antara reported on Monday (23/4/07).
CPO is used in the country mainly as feedstock for cooking oil, the prices of which surged lately with growing demand for CPO abroad.
Sugiharto said about 2.4 million hectares of the land will be reserved for state plantation companies.
Foreign investors are expected to have greater interest in the plantation sector, especially after the announcement of a new law allowing foreign investors to have control over land for 90 years.
Japan Allocates $15.7m for Jakarta MRT The Japanese government reiterated it would lend Indonesia $15.7 million to develop Jakarta’s Mass Rapid Transit System (MRT) to reduce traffic congestion and improve the country’s investment climate through infrastructure development, a Japanese official said.
Japan’s readiness to provide Indonesia the loan was first conveyed in a meeting between Indonesian Foreign Affairs Minister Hassan Wirayuda and his Japanese counterpart Taro Aso when President Susilo Bambang Yudhoyono visited Japan, Deputy Japanese Ambassador Satoru Satoh said Friday (27/4/07), according to Antara.
The MRT project will be built from Lebak Bulus, South Jakarta to Dukuh Atas, which already has a railway track. The system will have a 4-km track under ground and a 10.5-km track above ground. Construction of the MRT system is slated to be finished in 2014.
The cost of the project is estimated to reach 110 billion yen or $917 million, including a loan for technical service.
The Japanese loan carries 0.4% interest rate per year with a repayment period of 40 years.
Rp300b Sugar Refinery for W. Sumatra PT Semesta Berjaya is set to build a sugar refinery in the Padang Industrial Park, Padang Pariaman regency, West Sumatra at a cost of some Rp300 billion ($33.3 million).
Company director Burhanuddin said the refinery, which would be built on a seven-hectare site, would have a refining capacity of 500 tons per day and is expected to meet surging sugar demand in the province.
"Construction will commence in July and we hope that the refinery will have entered into commercial operation within three years," he said after the groundbreaking ceremony, The Jakarta Post reported.
To ensure a continuous supply of sugarcane, the company will develop 17,000 hectares of sugarcane plantations in five different locations in the province in collaboration with local growers.
About 5,000 hectares of the planned sugarcane plantations would be located in Pesisir Selatan regency, 5,000 hectares in Dharmasraya regency, 3,000 hectares in Padang Pariaman regency and 1,000 hectares in Padang.
Burhanuddin said the sugar refinery and sugarcane plantations would create up to 2,800 jobs.
STATE CONCERNS Govt. Allocates Rp9t to Renew Old Railway Tracks The government has allocated Rp9 trillion to renew worn-out railway tracks, Transportation Minister Hatta Radjasa said Thursday (26/4/07).
"The government will repair old railway tracks, rails and railway bridges," he said, according to Antara.
Most of the wooden rail ties are no longer in good condition as they date from the Dutch colonial period, he said.
Renewing railway tracks, rails and railway bridges will take time as damage has been found in many railway tracks, he said. "Railway bridges which were made during the Dutch colonial era will not be removed but renewed," he said.
Textile Exports Up 17.5% in Q1 Indonesia’s textile and garment exports in the first quarter of 2007 rose 17.5% from the same period in 2006, the chairman of the Indonesian Textile Producers Association (API) said Thursday (26/4/07).
The US is the largest market for Indonesian textiles and garments with exports to that country contributing $3.1 billion (about 4%) to overall textile and garment exports in the first three months of the year, Benny Sutrisno was quoted as saying by Antara.
He said domestic sales of textiles and garments in the first quarter of 2007 grew by about 5% from the same period in 2006.
Meanwhile, domestic sales of textiles and garments in the January-March 2006 period rose by 7% from the same period in 2005, he said.
SOEs State Firms Encouraged to Invest The government will encourage state-owned companies to increase investment in the country to spur the real sector’s growth, State Minister for State Enterprises Minister Sugiharto said on Wednesday (25/4/07).
"In discussions on the government’s 2008 work plan and an evaluation of developments in 2007, both the president and the vice president hoped that state-owned companies will not only pay dividends and taxes to the state but also encourage the real sector’s growth," he said. He projected state firms’ capital expenditures in 2007 at Rp114 trillion and expected the figure to increase to Rp150 trillion in 2008.
Garuda Needs $1b to Buy 25 Boeing 737-800s Garuda Indonesia said it needs Rp9 trillion ($1 billion) to buy 25 Boeing 737-800 aircraft to modernize its fleet.
The new aircraft will replace the old series of Boeing 737s, including the Boeing 737-300, 737-400 and 737-500, Garuda president Emirsyah Satar said, according to an Antara report on Monday (23/4/07).
Satar said the airline will seek loans to buy the aircraft in phases from 2009 and 2012.
By the end of last year, Garuda had 52 aircraft in its fleet, including six Airbus A330s, 46 Boeing 737s, two of them Boeing 737-800 NGs.
Jamsostek Gets ISO Certification State-owned workers' insurance company PT Jamsostek has received ISO certification setting international standards for the company in providing services to its customers.
The ISO 9001:2000 certification was presented by president of PT SGS Indonesia Robert James Rom Paris to Jamsostek president director Hotbonar Sinaga, The Jakarta Post reported on Monday (23/4/07).
Rom Paris said the certification would prompt a cultural change in Jamsostek's management and the company's future direction.
"The handing over of the certificate involves a long process and demands the company's commitment to implement internationally standardized quality management in investing its assets and providing service to the public," he said. "The certification is an international recognition of the company in terms of the delivery of services to satisfy customers, good corporate governance and transparency."
The certification was granted after SGS Indonesia and PT Surveyor Indonesia conducted a five-month audit of Jamsostek's investment and service systems from December 2006 to March 2007.
Sinaga said the certification would improve the company's status as a national financial institution as well as improve its services to workers as customers.
He said that receiving the certification means Jamsostek has to ensure its investments and services to workers follow international standards. "We are required to comply with international quality management in investing our assets and delivering services to our customers. For instance, Jamsostek will deposit its funds in banks certified by SGS and protect our workers with social security programs," he said.
Jamsostek manages almost Rp50 trillion ($5.3 billion) in assets with some 25 million workers registered with the company. However, only about 7.9 million workers are active and many employers have reported only a part of their workforce or their gross monthly salaries to Jamsostek.
PRIVATE SECTOR Corporations Told to Reduce Social Disparity - VP Vice President Jusuf Kalla has told the business community to generate labor opportunities through their corporate social responsibility (CSR) programs to help alleviate poverty and reduce the widening social disparity, The Jakarta Post reported.
Addressing the opening ceremony of a conference and expo on CSR on Thursday (26/4/07), Kalla said corporations and the government should cooperate in providing fair and secure lives to the general populace.
"It will be uncomfortable for the affluent people to have offices in skyscrapers and live in luxurious apartments next to slum areas that are frequently submerged by flooding," said the owner of the Kalla Group.
"It is also unfair for businesspeople to ride in luxury cars every day while many Indonesians have to take jam-packed trains to their workplaces and when they go back home," he added.
Import Tax on Automotive Raw Materials to Go The government said Monday (23/4/07) it will eliminate import taxes on automotive raw materials to help build the automotive industry.
"The import tax on raw materials for automotive components will be 0% effective May 3," the Finance Department said in a statement, according to Dow Jones Newswires.
The government did not specify the types of raw materials.
The import tax on such items currently ranges from 0% to 5%, a Finance Department official said.
PT Astra International may benefit from the new regulation as it could reduce its cost of operations, analysts said.
BANKS Major Banks Report Solid Q1 Results The banking sector appears to have shrugged off last year's mini-recession and to have started this year with a bang, with most major lenders booking higher first-quarter profits on higher lending growth.
Bank Rakyat Indonesia (BRI), Bank Danamon and Bank Permata are the latest banks to follow Bank Mandiri, Bank Niaga and Bank International Indonesia (BII) in reporting sound performances for the first three months to the end of March. All of the banks are on the list of the nation's top 10 lenders.
State-owned BRI, the country's fourth largest lender by assets, saw its net profit for the first quarter rise by 4% to Rp1.22 trillion ($134 million) from the same period last year, as its loan book grew 19% to Rp91 trillion, BRI president Sofyan Basyir said in a statement Thursday (26/4/07), according to The Jakarta Post.
The bank booked net interest income of Rp3.96 trillion, up 21% from last year's first quarter. Most of the bank's additional lending went to the SME sector. BRI's total deposits as of the end of March stood at Rp121.9 trillion, while its assets amounted to Rp152.1 trillion.
Announcing even more impressive profit growth, Bank Danamon, the country's fifth largest lender, said its after-tax profits nearly doubled by 92% to Rp482 billion during the first quarter. Bank Danamon's loan book grew 18% to Rp43.1 trillion as of the end of March, its president, Sebastian Paredes, said, resulting in net interest income of Rp1.65 trillion. The bank had total assets of Rp84.9 trillion as of the end of the quarter.
Meanwhile, Bank Permata reported first-quarter after-tax profits of Rp73.9 billion, up 14% from the same period last year. The profits were mostly derived from a 37% increase in the bank's net interest income to Rp595.6 billion. Its lending grew 7% to Rp23.8 trillion as of the end of March.
Bank Permata president Stewart D Hall said the bank's loan-to-deposit and non-performing loan (NPL) ratios were 87% and 3%, respectively, as of the end of the quarter.
State-owned Bank Mandiri, the largest lender by assets, recently announced its first-quarter results, which showed a doubling of net profit to Rp1 trillion. Mandiri increased its total outstanding loans as of the end of March to Rp105.6 trillion, having finally lowered its NPL ratio to a net level of 4% -- just below the central bank's 5% ceiling for the industry.
Bank Niaga, the country's seventh largest lender, also reported good results, with profit rising by 18% to Rp647.7 billion on a loan book that grew by 9% to Rp2.3 trillion as of the end of March.
Only BII reported worse results -- a 10% decline in its first quarter profit to Rp201 billion, despite lending growth of 14% to Rp26.4 billion from the same period last year.
The banking sector has suffered from high inflation and interest rates since 2005, which caused a slump in loan demand, with industry lending growing by a disappointing 14% to Rp792.3 trillion last year. Bank lending continued to decrease in January, before picking up again to Rp783.5 trillion in February.
OIL & GAS Govt. Mulls Incentives for Biofuel Sales The government is considering offering financial incentives to encourage gas stations to stock biofuel blends, says an official.
Evita H. Legowo, an assistant to the energy and mineral resources minister, told The Jakarta Post on Monday (23/4/07) that the incentives, which could take the form of tax relief or subventions, were necessary to ensure that biofuel retailers could continue to operate profitably.
"It is important to provide incentives because if oil prices fall below $70 per barrel, the market prices of biofuels will be higher than the prices of pure hydrocarbon-based fuels," Evita explained.
She added that the government was in the process of formulating a mechanism for providing the proposed incentives so as to ensure that retailers would be interested in stocking biofuels.
Pertamina EP Signs Four Gas Deals State oil and gas firm PT Pertamina's unit, Pertamina EP, has signed a gas sales deal with four buyers -- PT Pupuk Sriwijaya, PT Titis Sampurna, PT Pertiwi Nusantara and PT Energi Kompresindo.
Under the agreement signed Thursday (26/4/07), Pertamina EP will supply 325.03 trillion British thermal units (tbtu) of gas for five years to Pupuk Sriwijaya; 2.19 tbtu to Titis Samurna for three years; 0.87 tbtu for three years to Pertiwi Nusanatara Resources and 0.7 tbtu to Energi Kompresindo, also for three years.
Separately, Pertamina said it signed an agreement with Chevron Indonesia to purchase 65 tbtu of gas from the latter's Seturian gas field over six years.
The gas will be supplied to Pertamina's Balikpapan gas refinery, the company was quoted by XFN Asia as saying.
GeoPetro Spuds New Well GeoPetro Resources Company announced that its 12% owned Indonesian subsidiary, Continental-GeoPetro (Bengara-II) Ltd., has spudded the first well of its four well exploration drilling campaign planned for this year in the Bengara-II Block, onshore East Kalimantan, BusinessWire reported on Thursday (26/4/07).
Drilling of the 13,200 feet deep Seberaba #1 is expected to take 75 to 90 days at a cost of over $6 million. The well will test a large faulted structure ideally located to receive a hydrocarbon charge and trap hydrocarbons. It will test the oil production potential of four separate stratigraphic zones at depths between 4,900 to 13,100 feet.
GeoPetro is an independent oil and natural gas company headquartered in San Francisco, California. It currently has projects in the United States, Canada, Indonesia and Australia.
MINING Newmont Considers New Investment Newmont said it will proceed with plans to expand its gold and copper output in Indonesia following the decision of a court in North Sulawesi to acquit a subsidiary, PT Newmont Minahasa Raya (NMR) and its president director, Richard B Ness, of pollution and environmental damage.
A panel of judges said Tuesday (24/4/07) that the data submitted by the public prosecutors to support their charges differed from those presented by a number of national and international research centers.
Following the verdict, Newmont's vice president for Indonesia and Australia, Robert Gallagher, told Dow Jones Newswires that, in light of the acquittal, the company will now assess the possibility of expanding copper and gold output at its Batu Hijau mine on Sumba island by 30%-40%.
Gallagher said that Batu Hijau produces around 500,000 troy ounces of gold a year, and just over 270,000 metric tons of copper. According to data from the Energy and Mineral Resources Ministry, Newmont produced about 732,000 troy ounces of gold and 270,344 tons of copper last year.
Gallagher said Newmont's expansion plans at its Batu Hijau mine also depend on technical evaluations of the site's untapped metals deposits.
Newmont is the operator of Batu Hijau and owns a 45% stake in the mine. Japan's Sumitomo Corp. (SSUMY) and Indonesia's PT Pukuafu Indah own the remaining stake in the mine, which is located on the island of Sumbawa.
Govt. Awards 5 More Tin Export Licenses Indonesia, the world's second largest tin producer, has awarded five more tin export licenses, bringing to 10 the number of companies that can ship the metal overseas, Bloomberg reported.
“We have awarded five more,'' Diah Maulida, Director General of International Trade at the Trade Ministry, said Thursday (26/4/07). The five licenses went to PT Tinindo Inter Nusa, CV DS Jaya Abadi, PT Bangka Putra Karya (BPK), PT Bukit Timah, and CV Donna Kembara Jaya, an official from Maulida's office said.
Indonesia started a crackdown on illegal tin mining in October last year, driving up the price to its highest in at least 18 years. From February 23, only companies with licenses and that have paid royalties have been able to export refined tin.
“It may signal that the government may not be as strict in giving out licenses, so the market sentiment will weaken,'' said Ahmad Solihin, an analyst at PT Mandiri Sekuritas in Jakarta. “It will add supply to the market.''
Three-month tin futures on the London Metal Exchange declined as much as $300, or 2.2%, to $13,200 a ton. The price reached $15,100 on April 18, the highest since the contract started trading in dollars in 1989.
With the new restrictions, Indonesian output will drop by about 30% to 90,000 tons this year, according to a report.
Kalimantan Gold, Oxiana Launch Drill Program Kalimantan Gold Corporation Limited announced Monday (23/4/07) the start of drilling operations with its funding partner Oxiana Ltd. The program covers what Oxiana has confirmed to be "numerous high potential targets" at KGC's 941 km2 Contract of Work (KSK CoW) in Central Kalimantan.
Both parties believe that the selected drill targets have the potential for the discovery of a significant porphyry copper gold deposit, Dow Jones Newswires reported.
The first phase of the program takes place at the Beruang Kanan prospect and is then scheduled to move on to Mansur and Baroi, two other major targets on the property. The drilling at Beruang Kanan is a fully helicopter-supported operation involving the use of three drills testing to varying depths over a 3.5-km strike length.
The location of the drilling follows what Oxiana reports are "very positive results" from its detailed analysis of existing drill and other data which was completed at the end of March.
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