Highlights
Politics
- China’s foreign minister pledges closer relationship with Indonesia
Regions
- US Congressman says government working to empower Papuans
- Reforms in Police should continue, says President
Economy
- Government looks to 6.6% growth in second half
- New World Bank chief praises economic progress
Business briefs
Macroeconomy
·         Bank Indonesia cuts benchmark rate on lower inflation
·         Number of Indonesians in poverty falls
Investment
·         Government releases details of investment list
·         Aston group to expand hotel presence
State concerns
·         EU to send team to assess air safety improvements
SOEs
·         PT Semen Gresik cement sales up 14% in May
·         PT Widya Karya to build bridges for Algerian road system
Private sector
·         Noodle maker PT Indofood sales up 12% in first half
Banks
·         Two major banks to move into Shariah banking
Power
·         President urges innovative research into useful nuclear technology
·         PT Semen Gresik to build seven power plants for its cement operations
Oil & gas
·         Tax holidays considered for new refineries
·         LPG imports to rise in changeover from kerosene
Mining
·         Coal miner PT Adaro Indonesia plans $500 million IPO
·         PT Aneka Tambang in talks over alumina plans

POLITICS
China Pledges Closer Ties
Chinese Foreign Minister Yang Jeichi said on Thursday (5/7/07) his government would have more dialogue with Indonesia as part of efforts to resolve regional and international problems, The Jakarta Post reported.

Yang said cooperation between China and Indonesia, two countries of significant power, would be indispensable in striving for developing countries' interests.

"We also have agreed to improve coordination and cooperation in regional and international affairs,” told reporters after a meeting with President Susilo Bambang Yudhoyono. “These two big countries need to build cooperation to defend the interests of developing countries.”

The minister said both governments had agreed to push for a China-Indonesia strategic partnership and to further develop co-operation in infrastructure, energy and electricity.

In an earlier meeting with Indonesian Foreign Minister Hassan Wirayuda, Yang said both countries would find ways to double bilateral trade over the next three years.

The Foreign Ministry has said it hopes that bilateral trade will reach $30 billion by 2010, from last year's $15 billion.

The two ministers signed a memorandum of understanding on economic and technical cooperation. They and their delegations also touched on the need to speed up the realization of an extradition treaty between Jakarta and Beijing.
 

REGIONS
US Congressman Praises Papua Record
Visiting U.S. Congressman Eni Faleomavaega asked the Indonesian government Thursday (5/7/07) not to take harsh measures against the Free Papua Movement (OPM), saying it should be seen as part of democratic expression, The Jakarta Post reported.
Speaking after a meeting with President Susilo Bambang Yudhoyono at the Presidential Office in Central Jakarta on Thursday, Faleomavaega, Democratic congressman from American Samoa, said governments that uphold the principals of democracy, such as in Indonesia, should respect differences of opinion.
"I think in a democracy everybody is entitled to their opinion to the extent that there are factions, some who seek independence, others who seek another status. We should not take it to the extent that this is going to cause a revolution," Faleomavaega told a press conference.
Also present at the meeting with Yudhoyono were Foreign Minister Hassan Wirayuda, Fisheries and Maritime Affairs Minister Freddy Numberi, Papua Governor Barnabas Suebu and West Papua Governor Abraham Atururi.
Faleomavaega, who is chairman of the US House of Representatives' sub-committee on the Asia Pacific and global environment, reiterated his support for Indonesian sovereignty over the province.
He said the Indonesian government under Yudhoyono has done much to empower Papuans, a radical departure from policies of past administrations.
While Faleomavaega had not been allowed to visit Papua because of fears a visit might cause security problems, he was able to meet many Papuan leaders, foreign ministry spokesman Kristiarto Legowo said Friday.

"Although he only visited Jakarta, it does not mean that he had no access to meet a number of prominent figures from Papua," the spokesman said.

More Reforms for Police
President Susilo Bambang Yudhoyono, in a speech read by National Police deputy chief Comr. Gen. Makbul Padmanagara, called for more reforms in the force and said numbers would be increased to international standards, The Jakarta Post reported.
Indonesia’s Police force celebrated its 61st anniversary Monday (2/7/07).
Dr. Yudhoyono said the National Police must uphold the law both professionally and proportionally, and become a modern and moral police force that could be loved by the people.
Makbul said the police force's professional development would involve a proportional presence of police troops nationwide. "At the moment, some regions, such as Ambon, East Kalimantan and Bali, that have one officer for every 300 people, have achieved the standard international ratio of one police officer for every 500 people," he said.
"But some other regions, especially on Java, have one officer for every 1,100 people. Nationally, the ratio is one per 800."
The National Police currently has some 350,000 officers throughout the country and is attempting to meet the standard international ratio of officers to citizens within the next four years.
The president said he was proud of the police force for capturing several notable terror suspects, an achievement which received international recognition, and the force's firm action against illegal logging, illegal mining, illegal fishing and many forms of trafficking.
The president also stated the need for the police to cooperate with society to encourage community policing strategies that would enable people to solve problems in their own neighborhoods.

ECONOMY
Govt. Looks to 6.61% Growth in H2
The government, amid a host of positive statistics including a further reduction in the inflation rate, is predicting growth of 6.61% in the second half of 2007 as government spending kicks in fully.
The Central Bureau of Statistics (BPS) announced that GDP had increased by 6.0% in the first quarter of 2007 compared to the same period of 2006, with a strong contribution from the industrial processing sector.
Exports in the first half rose 13.3% from a year earlier to $55.2 billion, while imports were up 8.9% to $38.2 billion, the ministry said, adding that foreign exchange reserves may reach $54.2 billion by the end of this year.
Optimism was spurred by a Central Bureau of Statistics (BPS) report that inflation last month came in at 5.77% year to year, slowing from 6.01% in May. It was the first time this year that inflation had registered under 6% and marked a new point in the return to monetary stability since October 2005 fuel price hikes.
Bank Indonesia on Thursday moved to cut its benchmark interest rate by another quarter point to 8.25%, the lowest since the rate was introduced in July 2005, when it stood at 8.5%.
New World Bank country director Joachim von Amsberg, said in an interview on the bank’s website that it was an exciting time to be coming to Indonesia.

"Ten years after the economic crisis, Indonesia has emerged as a strong middle-income country, facing interesting new challenges as one of the region’s largest emerging economies,” he said.
Von Amsberg said he saw his role as to encourage positive developments rather than to criticize Indonesian policies. “Especially when it comes to middle-income countries that do not depend on external support, such as from the World Bank, we can provide more effective support by looking at successes within the country,” he said.
“Exactly ten years after the Asian crisis, it is actually quite remarkable how well the Indonesian economy is doing, how well stability - economic and political - has been restored, and how much the country is broadly appearing to be on the right track.”
Plans by Iran to go ahead with construction of an oil refinery in Banten were announced by Iranian Ambassador to Indonesia Behrooz Kamalvandi, Antara reported.
"President Ahmadinejad ... met with the Indonesian president in Jakarta several months ago to sign various Indonesian-Iranian cooperation documents, including on the development of an oil refinery plant in Banten,” the ambassador said.
The refinery would probably be built in Bojonegara sub-district, close to a planned major port. A statement said that feasibility studies had already been constructed.
While Kamalvandi did not put a cost on the project, he said the plant would produce some 20,000 barrels of oil per day. "This would meet a quarter of Indonesia's need for oil," he said.
South Korea's SK Corp. said it will invest $200 million in a plan with PT Pertamina to build a lubricant-based oil plant in Riau province, the Investor Daily  newspaper reported.
First half sales at noodle maker PT Indofood Sukses Makmur were up 12%, signaling improved disposable incomes at the grassroots.
Meanwhile BPS said the number of poor people in Indonesia in March 2007 was 37.17 million, down 2.12 million or 5.4% from March 2006. The decline occurred although the calculation of the poverty line rose by 9.67% from Rp151,997 ($16.86) per capita in March 2006 to Rp166,697 per capita in March this year.

Indicators:
 

BUSINESS BRIEFS
MACROECONOMY

BI Cuts 1-Month Rate to Historic Low
Bank Indonesia (BI) on Thursday (5/7/07) cut its one-month benchmark rate 25 basis points to 8.25% from 8.5% after on-year inflation eased to its lowest level in seven months in June.
"Inflation remains under control and tends to ease," BI Governor Burhanuddin Abdullah was quoted as saying by Dow Jones Newswires.
The new rate is an historic low. BI Deputy Governor Hartadi Sarwono said he still sees room for future rate cuts, but did not elaborate. Senior Deputy Governor Miranda Gultom said the authorities "will see next month" if there's room for further policy easing.
Inflation last month came in at 5.77% year to year, slowing from 6.01% in May, though month to month it accelerated to 0.23% from 0.1% in May, according the Central Bureau of Statistics.  Economists have said rice imports helped stabilize food prices after severe floods hit supplies early this year.  Core inflation, which excludes volatile items such as food, slowed to 5.4% from 5.62% in May.

Govt. Sees H1 GDP Rising by 5.87%
The economy likely expanded 5.87% in the first half of the year from last year and may grow 6.61% in the second half, the Finance Department said in an estimate released to Parliament Thursday (5/7/07).
The consumer price index likely rose 6.1% in the first half and may rise 6.5% in the second half, it said, according to Dow Jones Newswires.
Meanwhile, the country likely ran a budget deficit of just more than Rp2 trillion ($222 million) in the first half of 2007, the department said, noting that government spending reached Rp288.394 trillion in the first half, while total revenue earned was Rp286.365 trillion.
In the second half of the year, the budget deficit may be Rp59.9 trillion as more payments fall due than in the first half, leading to a full-year deficit of about Rp61.9 trillion, the department said.
Exports in the first half rose 13.3% from a year earlier to $55.2 billion, while imports were up 8.9% to $38.2 billion, it said, adding that foreign exchange reserves may reach $54.2 billion by the end of this year.
The government's three-month note rate likely averaged 8% in the first half, and will stay at that level in the second half, it said.
The department said it bases its budget assumptions on the dollar trading on average at Rp9,150 in the second half of the year, compared to an average of Rp9,050 in the first half.

GDP Rises 6.0% in Q1: BPS
Gross domestic product (GDP) increased by 6.0% in the first quarter of 2007 compared to a year earlier, the Central Bureau of Statistics announced on Monday (2/7/07).
All sectors recorded a rise except agriculture, which saw a contraction of 0.5%.
Industrial processing grew by a modest 5.4% but transportation and communications put on 11.1%, construction 9.3%, trade, hotels and restaurants 8.5% and gas, electricity and clean water 8.2%.
In the financial sector, real estates and service companies saw growth of 7.1%, services 7.0%, followed by trade and mining by 5.6%.

Tax Revenue Jumps 20.75% in H1
The country's tax receipts in the first six months of 2007 jumped 20.75% to Rp191 trillion ($21.2
billion) from the same period a year ago, Taxation Director General Darmin Nasution said, according to Asia Pulse. 

"The 20.75% increase exceeds the average 18.8% rise in tax receipts over the past five years," Nasution said Thursday (5/7/07).

Tax revenue from the oil and gas sector in the first semester stood at Rp171 trillion, an increase of Rp20.2 trillion from Rp141.5 trillion in the same period in 2006.

The director general also said tax revenue in 2007 was expected to drop by Rp19 trillion to Rp20 trillion from the target set in the 2007 state budget.

Poverty Level Down to 16.6% in March
The number of Indonesians living in poverty dropped slightly to 37.17 million, or 16.6% of the total population of 224 million as of March from last year, the Central Bureau of Statistics (BPS) said Monday (2/7/07).
During the same period last year, the number of the poor people was 39.3 million people, or 17.75% of the total population, the bureau said, according to The Jakarta Post.
The poverty line for this year's survey was set at a basic expenditure of Rp166,697 ($18.5) per capita per month, as compared to Rp151,997 in March last year.
BPS social statistics deputy director Arizal Ahnaf said this year's poverty line had been raised due to the rising price of basic foodstuffs, including the national staple, rice, as well as housing.
Ahnaf said that the decrease in the number of poor people was due to their obtaining additional income that was more than enough to offset their increasing expenditure on basic necessities.
"This might be the result of the government's direct cash payments to the poor, with people then using the money to set up small businesses or find productive employment," he said.

Excise Revenue 49% of 2007 Target
Indonesia's excise revenue in the first half of the year amounted to Rp20.1 trillion ($2.2 billion), or 49% of the government-set target of Rp42 trillion, a Finance Department official said.
Nearly 95% of the excise receipts came from cigarette makers, Director General for Customs and Excise Anwar Suprijadi said on the sidelines of a meeting with legislators, Antara reported.
 
Excise revenue rose 14.2% compared to the same period last year when the figure was Rp17.2 trillion, he said.  "The increase was the result of excise rate hike and improved law enforcement," he said.
Import duty receipts in the first half of the year reached Rp7.3 trillion, representing 51% of the target of Rp14.4 trillion for the year, he said.
He said the import duty receipts in the January-June period jumped 28.01% compared to the same period last year when the figure stood at Rp5.7 trillion.
"This means that excise and import duty receipts in the six months to June rose Rp4.1 trillion.  God willing, the target for 2007 will be achieved," he said.

INVESTMENT
Details of Investment List Issued
The government has issued its latest “priority investment list”, which sets out a more comprehensive description of which business sectors are opened and closed to investors.
The new list, required under the recently enacted Investment Law, governs a total of 338 business sectors, of which Trade Minister Mari Pangestu said 69 sectors would now be more open than before, with 11 becoming more restrictive, The Jakarta Post reported Thursday (5/7/07).
The previous 2000 and 2001 “negative investment lists” were less detail which only consist of 83 sectors.
The list increases the number of closed sectors to 25 from 11 previously to protect the national interest in such areas as public health, the environment, culture and natural biodiversity.  It also prioritizes 43 sectors for small and medium enterprises (SMEs).
Other sectors will, however, be more open to foreign investors than before.  Under the new rules, non-national investors will be allowed to take controlling stakes in banks (up to 99%), the power sector, oil and gas industry, toll road operators, water companies, agriculture and plantation firms (95%), insurance firms (80%), the pharmaceutical industry (75%), health services (65%) and construction (55%).
In the telecommunications sector, foreign investors will be allowed to own up to 65% of cellular operators, but only 49% of fixed-line phone companies.
The list, which came into effect on Tuesday (3/7/07), apply only to fresh investments and will not affect existing ones or those being processed now.
“The government put the national interest and the future of the nation first.  (But) basic principles such as transparency and legal certainty are also important things that will affect the investment climate in Indonesia.” Trade Minister Mari Pangestu was quoted as saying by Business Times.

Aston Int'l to Build More Hotels, Resorts
Aston International is planning to increase the number of hotels, resorts and residences it runs in Indonesia to 30 by the end of next year, to take advantage of the increasing number of Indonesians conducting their business meetings in tourist areas, its president and CEO Charles Brookfield said on Monday (2/7/07).
The US-owned company currently manages 12 hotels in Jakarta, Palembang, Bandung and Bali, and is developing 18 other properties across the country, he said, according to Antara.
Brookfield said the company is planning to build six hotels and residences in Jakarta until next year -- Aston Mangga Dua, Aston Kelapa Gading, Aston Marina Ancol, Aston Inn Cengkareng, Aston Serpong, and Aston Aberco Belleza Permata Hijau.
The company has also signed contracts to manage hotels in Ketapang, Central Kalimantan and in Surabaya, East Java beginning in 2009.
Brookfield said the occupancy rates of hotels managed by Aston International have continued to increase.  The hotel occupancy rate in Jakarta has reached more than 85%, in Bandung 75%, in Bali 60%-65% and in Palembang 80%, he said.

Saudi Chamber Eyes Joint Investment
The Madinah Chamber of Commerce and Industry in Saudi Arabia has expressed interest in joint investment in projects in Madinah and Indonesia.
"It would be necessary to introduce investment opportunities both in Madinah and in Indonesia with a view to establishing a partnership between the businessmen of the two countries," Madinah chamber chairman Saleh Al-Suhaimi said on Tuesday (3/7/07), Antara reported.
The Madinah chamber made the offer in a meeting with a delegation of the Indonesian Chamber of Commerce and Industry (Kadin) on Monday (2/7/07).
The Madinah chamber hoped Indonesian businessmen would take part in building the Madinah-Mekkah railway track project.

$65.5m Investment in Jambi in 2006
Five foreign investors and their Indonesian partners invested $65.5 million in Jambi province last year, a report said, according to Antara.
The investment projects created jobs for more than 2,700 people, said the report, issued by the provincial development and promotion body on Monday (2/7/07).
Malaysian-Indonesian venture PT Plant Biofuel Indonesia, engaged in base organic chemicals, invested $48 million to open its business in Tanjung Jabung Barat district.
Thai-Indonesian fishery company, PT Bumi Laut Sumber Utama, invested $13.5 million and absorbed 1,759 Indonesian workers.
PT Doosan Crude Petroleum Forest Korea meanwhile invested $3.5 million in a timber estate in Tanjung Jabung Timur and employed more than 1,000 Indonesians.
Two Indian-Indonesian companies invested in Jambi -- PT Shaaj International Agro, engaged in the trade and distribution of agricultural products, invested $255,000; and import export company PT Vipul Jaya Lestari invested $200,000 and created jobs for 16 Indonesian workers.

STATE CONCERNS
EU to Study Airline Security
The European Union is to send a team of aviation safety experts to Indonesia and hopes to repeal an effective operating ban on all Indonesian airlines within three months or less, the EU's top representative in Indonesia said Friday (6/7/07), according to Dow Jones Newswires.

"We hope to revert it (the ban) as soon as possible," Jean Breteche, EU's head of delegation in Indonesia, told reporters.

Breteche said the EU's team of safety experts will work with officials from the International Civil Aviation Organization (ICAO) to assess Indonesian airlines' progress in improving safety standards.
The ICAO also last week sealed a deal with Indonesian authorities under which it will assist in improving systems in Indonesia, including in critical oversight agencies. Australia also announced an aid package to assist security and safety improvements in Indonesia’s airline industry.
CEO of Panorama Tours, Dharma Tirtawisata, said as many as 700,000 to 800,000 European tourists come to Indonesia every year, and about 250,000 of them use domestic airlines for inter-island flights.
Chairwoman of the Association of Indonesian Tour & Travel Agencies (ASITA) Herna P Danuningrat said tourist destinations such as Maluku, Sulawesi, Papua, Lombok, Nusa Tenggara and South Kalimantan where foreign airlines have no direct flights would suffer.
She called on all Indonesian airlines to take measures to improve their flight safety to a level where they meet international standards.

SOEs
Semen Gresik Cement Sales Up 14% in May
State-owned PT Semen Gresik said sales in May rose 14% from a year earlier, helped by a construction boom in commodity-producing areas outside the main island of Java, Antara reported on Tuesday (3/7/07).
Sales rose to 1.46 million metric tons from 1.28 million tons a year earlier, the East Java-based company said.  Domestic sales climbed 14% to 1.34 million tons, while exports gained 12%.
Gresik, citing figures from the Indonesian Cement Association, said total sales by all producers in the country in May rose 13% from a year earlier to 2.9 million tons.

WIKA to Build Bridges for Algeria
Listed state-owned construction firm PT Wijaya Karya (WIKA), in cooperation with a Japanese consortium, COJAAL, has won a project to build 57 bridges worth $50.4 million in Algeria, Asia Pulse reported.
WIKA president director A Sutjipto said Tuesday (3/7/07) that a contract had been signed on June 22. The bridges will form part of the Highway East West Motorway construction which connects West Algeria with Morocco and East Algeria, bordering Tunisia.
The Japanese consortium is composed of Kajima, Taisei, Nisimatsu, Hazena and Teken.
As part of the contract, WIKA will build a precast girder factory in Algeria. At present, the company has seven girder factories in Indonesia with a production capacity of one million concrete girders.

PRIVATE SECTOR
Indofood H1 Noodle Sales Up 12%
PT Indofood Sukses Makmur posted a more than 12% increase in its first-half noodle sales, a senior company executive said on Wednesday (4/7/07).
Flour sales volumes rose 2% in the first six months from the year-ago period because of stronger demand, Franciscus Welirang, senior vice president director of the company, was quoted as saying by Reuters.
Welirang did not give the details, but Indofood produced an average of 200 million packs of noodles per week during the first half of last year.
"For flour sales volumes, in the first half we recorded a 2% increase and for the full year our target is 5%-7%," he said.
Indofood also controls the world's top two flourmills through its subsidiary, Bogasari Flour Mills.
The company, controlled by the Salim family through Hong Kong listed First Pacific Ltd, is aiming for a 6% increase in its noodle sales volumes from 11.82 billion packs last year.
It is also aiming to boost its annual capacity to 14.5 billion packs from 13.5 billion currently.
Per capita instant noodle consumption in Indonesia, with 220 million people, is about 57 packs a year, lower than top instant noodle consumer Korea's about 70 packs.

France's Thales to Build New Indosat Satellite
PT Indosat on Tuesday (3/7/07) said it had appointed Thales Alenia Space France (TASF) to build and launch its latest telecommunications satellite, Palapa D, Agence France-Presse reported.
In a statement, the company said the satellite will be launched in 2009 and have a service life of 15 years.  It will replace its existing Palapa-C2 satellite, which is set to end its service life in 2011.
Indosat president Johnny Swandi Sjam said in the statement that the satellite will be provided to TV broadcasters, VSAT providers and other corporate customers.
Indosat will also use the new satellite as a backbone to support other services, such as cellular, fixed voice telecommunications and fixed data services.
The new satellite will have a larger capacity than its predecessor, with coverage extending to Indonesia, other Asian countries, the Middle East and Australia.
Indonesia has in the past mostly had its satellites built in the US.

Car Sales Move Upward
First half sales figures in the automobile industry show strong upward growth. The country’s largest car maker, PT Toyota Astra Motor, reported a 12% increase in sales to 69,075 units of Toyota cars in the first half of this year, from 61,805 units a year earlier, Asia Pulse reported.

In June its sales rose to 13,300 units from 13,182 units in the previous month, marketing director Joko Trisanyoto said Thursday (5/7/07).

Meanwhile, car distributor PT Indomobil Sukses International reported a 20% increase in car sales in the first half of this year to Rp2 trillion from the same period last year.

BANKS
BCA, BRI to Buy Small Banks for Shariah Units
Bank Central Asia (BCA) is planning to acquire a small bank later this year to develop its Shariah unit, its vice president Aswin Wirjadi said Tuesday (3/7/07).
The bank is preparing Rp200 billion to finance the acquisition, Dow Jones Newswires reported.
He refused to name the bank, but said that after the acquisition, the bank would be converted to a shariah bank.
BCA's outstanding loans likely rose 13.42% year-on-year to about Rp60 trillion, of which most were extended to the infrastructure sector, including toll roads and telecommunications.
Wirjadi noted that the bank's undisbursed loans however remain high, standing at about 30% of total loan commitments for the period which amounted to Rp90 trillion. 
Loan demand is expected to pick up in the second half on the back of softer lending rates, as the central bank has been trimming its benchmark rate, and is expected to continue doing so amidst a benign inflation environment, he was quoted as saying by Thomson Financial.  For the full year, he expects the bank's outstanding loans to grow by at least 15%.
Meanwhile, Bank Rakyat Indonesia (BRI) said it will make an offer to buy the small, unlisted Bank Jasa Arta for Rp60 billion ($6.6 million), Kompas daily reported.
The daily quoted BRI president Sofyan Basir as saying the bank will hold a meeting of shareholders later this year to approve the proposal to take over Bank Jasa Arta.
Basir said BRI plans to merge Bank Jasa Arta with its shariah unit, then spin it off as an independent entity.

BNI Channeled $3.4b to SMEs in June
Bank Negara Indonesia’s (BNI) loans to small and medium enterprises (SMEs) rose 5.2% to Rp30.84 trillion ($3.4 billion) in June from Rp29.3 trillion in April, its managing director Bien Subiantoro said.
"The amount of credits extended to small-scale businesses per June was Rp14.52 trillion, or an increase by Rp902 billion compared to its position in April at Rp13.6 trillion," Subiantoro said, according to an Antara report on Wednesday (4/7/07).
The loans extended to medium-scale businesses totaled Rp16.32 trillion last month, up Rp620 billion from April’s Rp15.7 trillion.
"Our target for the channeling of credits to medium-scale businesses until the end of this year is Rp17.4 trillion and for small-scale enterprises Rp16.5 trillion," he said.  This means the bank has already channeled 89.45% of the total credits for SMEs, he added.

Bahraini Bank to Open Office
Bahraini Islamic lender Albaraka Banking Group (ABG) said it would open an office in Indonesia as part of plans to expand in Asia, possibly through acquisitions, Reuters reported on Wednesday (4/7/07).
Albaraka has operations in Arab countries, South Africa, Pakistan and Turkey, where its local unit sold a 20.57% stake to the public last month.
Indonesia has approved Albaraka's application to set up a representative office, chief executive Adnan Yousif said in a statement.
"The other countries under review are Malaysia and China over the medium term.  ABG will, over the longer term, look to expand into India and Europe," it said.  "ABG is looking to expand into the Far East either by way of... branch expansion or by... acquisitions."

POWER
SBY Calls for Peaceful Nuclear Research
President Susilo Bambang Yudhoyono has called on researchers to develop nuclear technology for peaceful purposes, Antara reported.
In a visit to the National Atomic Energy Agency (Batan) at the Center of Science and Technology in Serpong, Tangerang, on Wednesday (4/7/07) the president called for the proper use of nuclear technology to help deal with global problems.
"I call on you to change our country by inventing technology breakthroughs, conducting research in various fields, particularly concerning food, energy, water and medicines, which can save our life in the future," he said.
He expressed his appreciation to the recent Batan's research to strengthen the food security program that resulting in inventing superior paddy varieties, and several applications in the healthcare sector.

PT Gresik to Build Seven Plants
In tandem with the construction of the two new cement plants, PT Semen Gresik is planning to build seven new power plants with a total capacity of 350 MW to supply energy to both its proposed and existing plants, The Jakarta Post reported.
The company will invest a total of $350 million on the construction of the seven coal-fired plants.
Excluding the cost of the power plants, the company's investment in business expansion will amount to some $1 billion, president director Dwi Soetjipto told reporters after the company's annual shareholder's meeting on Thursday (5/7/07).

PLN Tender for Gas Pipeline
State-owned power utility PT PLN has launched a tender for the construction of a 7.2-km gas pipeline from Muara Bekasi to its Muara Tawar power plant in West Java, Thomson Financial reported on Wednesday (4/7/07).
Tony Agus Mulyantono, PLN's deputy director for primary energy and power plants, said 10 companies have expressed interest in participating in the bidding process.
He said construction of the gas pipeline is expected to start in September.
 

Pertamina to Import More LPG in 2008
State oil and gas firm PT Pertamina will import 500,000 tons of liquefied petroleum gas (LPG) next year to support the government's program to gradually replace highly subsidized kerosene, an official told The Jakarta Post Tuesday (3/7/07).
Pertamina deputy head of marketing Hanung Budya said that the country would need the additional supplies of LPG in 2008 in order to meet the government's target of replacing one million kiloliters (kl) of kerosene.
The government's kerosene-to-LPG conversion program is expected to raise Indonesia's LPG demand to 1.9 million tons in 2008 from this year's 1.4 million. Hanung said imports could be bigger if the government accelerates the conversion program.
"The government wants us to replace 75% to 80% of the total of 10 million kl of kerosene that people consume annually with LPG by 2010. But, it's possible that we might decide to speed things up so as to achieve 60% of that target next year. That means we would need a lot more than the 500,000 tons of LPG," Hanung said.
Hanung said that Pertama was currently in talks with a number of major players, such as American oil giant ConocoPhillips and British-based oil company BP with a view to securing the additional gas supplies.
As a result of the conversion program, the government hopes to save about Rp1.28 trillion in fuel subsidy spending should the program achieve its target of replacing 319,000 kl of kerosene with 181,000 million tons of LPG.

CNPC, Pertamina to Work in Sudan: Report
China's No. 1 oil company, CNPC, and Indonesia's PT Pertamina have agreed to co-develop a Sudanese offshore oil block, a report said Monday.
The agreement, signed at the end of June in Sudan's capital, Khartoum, calls for a six-year exploration phase and shared future oil production under a 20-year concession, the CNPC-backed China Petroleum Daily reported.
Sudan is among Beijing's key oil suppliers. It shipped 4.7 million metric tons of crude oil to China in January-May, a fivefold increase over the same period in 2006.
 

Salamander to Buy Stake at Simenggaris
UK independent Salamander Energy is to acquire a significant stake in the Simenggaris block in East Kalimantan in a deal that will boost its Indonesian acreage, Upstream reported on Friday (6/7/07).

Salamander is picking up a 21% interest in Simenggaris in the Tarakan basin from Medco Energi.

The new partners plan to start drilling the two remaining commitment wells on the block this month, both appraising the South Sembakung gas condensate discovery.

Estimated resources at the field are put at about 125 billion cubic feet of gas and 3 million barrels of condensate, according to Medco. South Sembakung's gas would have a ready local market,
where supply is critically short, according to Salamander.

The main customer would be the Bunyu methanol plant, which  started operating in 1983, where production has slumped over the past four years due to lack of feedstock gas.

The drilling program will involve deepening last year's SS-2 well, which did not reach the deeper zone that tested gas in the  discovery wildcat, and a new well on the crest of the structure.

Borneo Oil to Buy Indonesian Company
Malaysian oil and gas company Borneo Oil Bhd said its unit Borneo Oil (Indonesia) Ltd will pay 30.87 million ringgit to acquire Indonesian company PT Pelangi Haurgeulis Resources, Thomson Financial reported on Monday (3/7/07).
Pelangi Haurgeulis holds a 20-year technical assistance contract (TAC) for oil and gas field development of the Haurgeulis field in Indonesia.
Borneo Oil (Indonesia) will acquire the entire issued shares of Pelangi Haurgeulis from PT Bumi Hastamukti and PT Pancuran Rizki Semesta, the company told the Malaysian exchange Tuesday.
Borneo Oil said the acquisition will enable it to develop "a balanced portfolio of oil and gas assets."
The 20-year TAC was awarded to Pelangi Haurgeulis by state oil company Pertamina in 1995. The Haurgeulis field, which has a daily output of about 1.5 million standard cubic feet of gas, is located in an onshore region in West Java.

Adaro Eyes $500M S'pore IPO
Indonesia's second-largest coal producer, PT Adaro Indonesia, plans to raise around $500 million in what could be the country's biggest initial public offering (IPO), a source familiar with the deal told Reuters on Tuesday (3/7/07).
Adaro aims to sell a 25-30% stake on the Singapore exchange this year, with the proceeds to be used to expand the business, said the source. Adaro produced 34.3 million tons of coal last year.
Last month, Indonesian media firm PT Media Nusantara Citra Tbk (MNC) raised $419 million in the largest IPO in four years. "The size of the (Adaro) IPO would be bigger than $500 million. I expect the company to be priced maybe 20-30% lower than Bumi," the source said.
PT Bumi Resources, which has a market capitalization of $5.26 billion, trades on a multiple of around 20 times forecast 2007 earnings.
Shares in Bumi have traded in a fairly narrow range for several years, but have more than doubled this year to change hands at around Rp2,400 as demand for coal surged.
In June an Indonesian government official said domestic coal demand will double in the next three years to reach 90 million tons by 2010.

Antam in Alumina Talks
PT Aneka Tambang is still in talks with a potential strategic partner from China to build a $500 million alumina processing plant in Indonesia.

"We are now at the stage of drafting a heads of agreement with the potential investor (but) the talks will still take time," Antam investor relations head Eko Endriawan told Thomson Financial.

Endriawan said the project, which will be called the Bintan Smelter Alumina, is expected to have an annual capacity of around 400,000 tons.