PGN expects robust sales in 2009 on demand from power producers

State gas distributor PT Perusahaan Gas Negara (PGN) expects sales to grow by 33 percent next year on rising demand from power producers.

Sales volume is expected in 2009 to increase to between 700 and 800 million cubic feet per day (MMScfd), up from 600 MMScfd forecast for the end of this year, PGN president director Hendi Prio Santoso told reporters Wednesday.

"Demand from power producers is very high. If we can manage to fulfill this demand we are optimistic for next year, despite the crisis," Hendi said.

"But, we need further evaluation to examine how big the crisis will impact upon the industry and how long it will last," he said, adding that in the meantime PGN would focus on meeting demand from power producers -- its biggest customers.

Currently, PGN hold contracts to supply 260 MMScfd to power producers.

Despite the forecast growth in demand, Hendi said PGN would probably not increase its gas price. "We may maintain current price levels, unless we receive new gas supplies at higher cost."

PGN currently sells gas at an average price of $5.5 per million British thermal units (mmbtu) and buys gas at a price of $3.9 per mmbtu.

Riza Pahlevi Tabrani, PGN finance director, said capital expenditure for next year could reach $200 million financed by a mixture of internal budget and loans, the latter mostly from the Japanese Bank for International Cooperation and the World Bank.

"Most of it will be used to develop the pipeline transmission network," Riza said. PGN finished 1035 kilometers of transmission and distribution pipelines in August this year. The pipeline system has a total capacity of 970 MMScfd.

PGN is one of the state enterprises obliged by the government to buy back their shares to benefit from the large fall in stock prices to help improve liquidity.

Hendi said PGN has so far only spent Rp 2.5 billion buying back its shares from Rp 400 billion allocated for that purpose.

PGN booked Rp 2.04 trillion in net profits in the third quarter this year, up 56.8 percent from Rp 1.30 trillion in the same period last year.

Source: The Jakarta Post

Govt: no price cut for diesel fuel, kerosene

The government said Sunday it would not cut the prices of subsidized diesel oil and kerosene, currently at Rp 5,500 (46 US cents) and Rp 2,500 a liter, respectively, despite cuts in gasoline prices starting Monday.

Even though the price of subsidized gasoline will be lowered to Rp 5,500 from Rp 6,000 a liter from Monday, prices of diesel fuel and kerosene will remain the same, head of the Legal Affairs and Public Relations Bureau at the Energy and Mineral Resources Ministry Sutisna Prawira said in a press release Sunday.

The price of subsidized gasoline is being cut because of a slump in global crude oil prices to below US$60 a barrel in the past month. The price hit $147 a barrel in mid-July.

But the price cut may not last long, as the energy and mineral resources minister will continue to monitor and evaluate changes in global prices.

Critics have urged the government to lower the price of subsidized diesel fuel by Rp 500 a liter to help boost the economy. (dre)

Source: The Jakarta Post

Pertamina moves to acquire Verenex's Libya oil field

PT Pertamina is moving ahead with an expansion plan, with the state oil and gas company in talks with Verenex Energy Inc. to buy the Canada-based firm's stakes in an oil field in the Ghadames Basin, Libya.

The field, known as Area 47, is operated by Verenex and Indonesia's largest publicly listed oil company, PT Medco Energi, with each holding 50 percent of the interest.

"Verenex may pull out from the block. As the drilling has been done, we think why not to enter into this block," said Pertamina's upstream director Karen Agustiawan Friday.

Karen said Area 47 may begin production in 2011 with an initial production estimated at 50,000 barrels of oil per day.

She added that the block, if the talks were successful, would be the third Pertamina block in Libya. "We already own two blocks in Libya and are looking forward to see Libya as one of our bases overseas."

Medco and Verenex won rights in 2005 to explore the basin for 30 years. The area contains about 2.15 billion barrels of oil equivalent according to a best estimate study as of Sept. 20, Medco said on Nov. 7, as reported by Bloomberg.

Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), has 41.5 billion barrels in proven oil reserves and produced more than 1.75 million barrels a day in October.

Karen said Pertamina has yet to decide the portion of the stakes it would acquire. "We are still in talks with Verenex. We don't know yet whether we will enter the block alone or with partners," she said.

Meanwhile, Pertamina is also getting good news on the domestic front.

The company, through its subsidiary, PT Pertamina EP, is developing an oil and gas well in Pondok Tengah, Bekasi, West Java.

In an early trial on Nov. 24, PT Pertamina EP extracted 3,447 barrelsof oil per day and 6.7 million cubic feet gas per day from the well, PT Pertamina EP's president director Tri Siwindono said.

Pertamina expects to produce an average 154,000 barrels of oil per day in 2008, up from 143,000 barrels per day in 2007.

Source: The Jakarta Post

Monday, December 1, 2008 6:38 AM Be a member & get the benefits! Register or login UT prepares to buy two more coal mines

PT United Tractor, the publicly listed heavy equipment distributor and coal mining company, was on track Friday to finalize acquisition of two coal mines in Central Kalimantan for around US$45 million, says an executive.

"We are now completing the due diligence process, hopefully we can announce the acquisitions by next month or January next year," said finance director Gidion Hasan.

Gidion, however, refused to mention the name of the companies he was dealing with as the due diligence process was still underway.

The coal mines in question, according to Gideon, met the company's strategic plan criteria only to acquire mines which had more than 5 million tons of reserves of medium to higher quality coal, with more than 5,800 kcal/kg (calories per kilogram) calorific value.

"We have $45 million on standby to wrap up the deal."

Currently, the company operates a coal mine in South Kalimantan with annual production of three millions tons of coal under its subsidiary PT Pamapersada Nusantara, which has 13 million tons of reserves and contributed Rp 2.8 trillion ($233 million) in sales during the January-September period.

Its other coal mine, located in Kapuas, Central Kalimantan, has 40 million tons of reserves of coal and is expected to start production in 2009.

In the first nine months of 2008, United Tractors generated Rp 21.1 trillion in sales revenue, up by 59.4 percent from 13.2 trillion from the same period last year.

It managed to book Rp 2.1 trillion in net profits, an 88.7 percent increase from last year.

The mining sector is expected to bolster the company's revenue after forecasting that construction machinery sales would probably decrease significantly.

"Next year our sales should be backed up from other sectors, like mining and the parts and services business," Gidion said.

The company's sales revenue in the first nine months of 2009 was made up from sales of construction machinery (47.6 percent), mining contracting (39.2 percent) and coal mining (13.2 percent)

United Tractors is 59.5 percent owned by PT Astra International with the investing public controlling the rest. (hwa)

Source: The Jakarta Post

Indonesia's Mitra to Expand Business in Oil And Gas Drilling

Publicly listed Indonesian transport company PT Mitra Rajasa (JSX:MIRA) has plans to expand business in the oil and gas drilling industry.

The company will use Rp225 billion (US$22 million) in fund it hopes to raise from right issue next month to finance the business expansion, its chief commissioner Tito Sulistio said.

Tito said, Mitra, which earlier this year acquired a major drilling company Apexindo Pratama Duta at a price of Rp5.19 trillion, will team up with at least two other companies in the oil and gas drilling business.

Tito said Mitra also is eyeing business in technology to develop abandoned oil wealth in cooperation with unnamed Russian partner.

The company also plans to develop business in floating storage offshore (FSO), the newspaper Investor Daily quoted him as saying.

Source: Yahoo Asia News

Nickel producers cut output

The country's two biggest nickel producers have cut 2009 production targets as nickel prices have plunged while the global economic downturn has reduced demand.

State mining company PT Aneka Tambang cuts its production target by almost 30 percent to 12,000 tons for next year on lower demand, president director Alwin Syah Loebis said Wednesday.

Alwin said in a presentation that global consumption of nickel would go below 1 million tons next year from 1 million tons this year, in particular because of the forecast reduction in world economic growth.

The decision to cut the production target was also taken because of rising production costs.

Alwin reported that as of the end of October, production costs reached US$5.69 per pound, while the sales price of nickel was around $4.70 per pound.

Bloomberg reported that nickel on the London Metal Exchange lost 60 percent this year, the biggest decline among the six primary metals traded on the exchange.

"Because of the prices, we decided to cut production and repair our smelters," Alwin added.

Corporate secretary Bimo Budi Satriyo said that it was probable the company would suffer a financial loss in the fourth quarter.

In the first nine months of the year, the company booked a net profit of Rp 1.62 trillion, a 58 percent drop compared to Rp 3.8 trillion in the same period last year.

For next year, the company aims to spend Rp 3.02 trillion in capital expenditure, up from Rp 758 billion this year. Next year's budget will be allocated to routine current expenditure (Rp 427 billion), development (Rp 1.5 trillion) and investment on exploration (Rp 1.01 trillion).

Meanwhile, PT International Nickel (Inco) Indonesia cut this year's production target by 20 percent to 70,000 tons, following its decision to shut down its diesel-fired power plants after production costs rose.

Inco has several power plants with a total capacity of 360 megawatts, of which 85 megawatts are fired by fuels and 275 megawatts by hydro power.

Concerning next year's projections, both companies are optimistic that nickel prices in the second semester of 2009 will rise as demand should start to recover in the second half of the year.

Analysts have said that the recovery of nickel prices may be primarily driven by stronger demand from stainless steel makers, who will opt for nickel rather than chrome, since the price of chrome has steadily increased. (dis)

Source: The Jakarta Post

Indo Tambangraya to invest $200m in 2009

PT Indo Tambangraya Megah (ITM), the Indonesian subsidiary of Thailand's biggest coal producer Banpu Pcl., plans to raise its capital expenditure in Indonesia by more than double next year compared to a year earlier, to increase its production capacity.

Somyot Ruchirawat, ITM's president director, said the company would spend US$200 million next year, up from $71.5 million forecast for 2008.

"The funding is from our internal budget. We would not use any loans," Ruchirawat said.

The budget will mainly be used to expand the company's mining capacity in Tandung Mayang, Kutai Kartanegara Regency in East Kalimantan, which is operated by PT Kitadin, one of ITM's subsidiaries.

"We are going to invest in equipment to increase freight capacity. This project alone will cost us about $60 million," Ruchirawat said.

He was quick to add that these figures and the size of the project could still change, if adjustments were needed due to the current financial situation.

"Because of the economic situation, we are reviewing some projects and acquisition plans to see whether what we are going to invest will satisfy our shareholders or not."

The company however will move forward with projects such as the expansion of its coal port facility in Bontang, East Kalimantan to increase handling capacity to 18.5 million tons from the current capacity of 12.5 million tons.

ITM is the fourth largest coal producer in Indonesia.

As of September this year, the company produced 13.2 million tons of coal, up from 12.9 million tons in the same period last year.

It has reduced its 2008 coal sales target to 18.1 million tons from an initial target of 19.5 tons, because of heavy rain in Kalimantan which has made mining more difficult.

The company hopes to produce 20.5 million tons of coal next year. It exports 90 percent of its production.

As the domestic obligation for coal producers will be enforced next year, ITM will increase its sales to domestic buyers, Ruchirawat said. -- Alfian

Source: The Jakarta Post

PGN expects robust sales in 2009 on demand from power producers

State gas distributor PT Perusahaan Gas Negara (PGN) expects sales to grow by 33 percent next year on rising demand from power producers.

Sales volume is expected in 2009 to increase to between 700 and 800 million cubic feet per day (MMScfd), up from 600 MMScfd forecast for the end of this year, PGN president director Hendi Prio Santoso told reporters Wednesday.

"Demand from power producers is very high. If we can manage to fulfill this demand we are optimistic for next year, despite the crisis," Hendi said.

"But, we need further evaluation to examine how big the crisis will impact upon the industry and how long it will last," he said, adding that in the meantime PGN would focus on meeting demand from power producers -- its biggest customers.

Currently, PGN hold contracts to supply 260 MMScfd to power producers.

Despite the forecast growth in demand, Hendi said PGN would probably not increase its gas price. "We may maintain current price levels, unless we receive new gas supplies at higher cost."

PGN currently sells gas at an average price of $5.5 per million British thermal units (mmbtu) and buys gas at a price of $3.9 per mmbtu.

Riza Pahlevi Tabrani, PGN finance director, said capital expenditure for next year could reach $200 million financed by a mixture of internal budget and loans, the latter mostly from the Japanese Bank for International Cooperation and the World Bank.

"Most of it will be used to develop the pipeline transmission network," Riza said. PGN finished 1035 kilometers of transmission and distribution pipelines in August this year. The pipeline system has a total capacity of 970 MMScfd.

PGN is one of the state enterprises obliged by the government to buy back their shares to benefit from the large fall in stock prices to help improve liquidity.

Hendi said PGN has so far only spent Rp 2.5 billion buying back its shares from Rp 400 billion allocated for that purpose.

PGN booked Rp 2.04 trillion in net profits in the third quarter this year, up 56.8 percent from Rp 1.30 trillion in the same period last year.

Source: The Jakarta Post

CBM Asia Awarded Production Sharing Contract by Government of Indonesia

CBM Asia Development Corp. (the "Company") (TSX VENTURE:TCF)(FRANKFURT:IY2) is pleased to announce that the Government of Indonesia has awarded a production sharing contract ("PSC") for the development and production of coalbed methane on a portion of the Company's Kutai Block located in eastern Kalimantan Island of Indonesia. The Government of Indonesia requires all companies engaged in the drilling for or extraction of coalbed methane to sign a production sharing contract.

The PSC covers an area of approximately 760 square kilometres in the Kutai basin of Indonesia and has been granted to Kutai West CBM Inc. ("Kutai West"), a consortium established by the Company and its joint venture partners, and Newton Energy Capital Inc. ("Newton"). Under the terms of the PSC, Kutai West and Newton have agreed to incur exploration expenditures totalling US$5,606,000 over a period of three years including the drilling of two core holes and four exploration wells on the Kutai Block and pay a US$1,000,000 signing bonus to the Indonesian government.

The awarding of the PSC to Kutai West is a major milestone in the Company's business plan to become a producer of coalbed methane and represents only the fourth time in its history that the Government of Indonesia has awarded PSCs for the development of coalbed methane in the country. The Government of Indonesia estimates that there are approximately 453 trillion cubic feet of coalbed methane resources in Indonesia (ADB Study, Stevens et al, 2004).

President Al Charuk comments: "Our newly signed production sharing contract is incredibly exciting for our company and all our investors. We have been working towards this for two years, and we are ready to hit the ground running in the next phase of development on our Kutai Block properties. Considering the opportunities that exist in alternative energies, we feel that our Company and our shareholders are well positioned."

The Company is currently defining evaluation well locations within certain "sweet spots" previously identified by the Company with a view to drilling its first exploration well on the Kutai Block early in 2009.

Under the terms of its existing Participation Agreement on the Kutai Block, the Company has the right to earn an 18% (net) interest in the newly awarded PSC by funding certain cash payments and exploration work as more particularly described in the Company's filing statement dated July 28, 2008. The Company retains the right to earn up to a 40% interest in the remaining 565 square kilometres of its original Kutai Block, which is not included in this PSC.

ON BEHALF OF CBM ASIA DEVELOPMENT CORP.

Alan T. Charuk, President & CEO

This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Source: MarketWire

Chevron Announces First Oil Production From Indonesia's North Duri Field

Chevron Corporation (NYSE: CVX) today announced that its wholly owned subsidiary, PT Chevron Pacific Indonesia, has started producing crude oil from the North Duri Field Area 12 in Indonesia, where Chevron produces nearly half the nation's crude oil.

First oil was achieved on Nov. 14, 2008, and production is projected to increase to 34,000 barrels of crude oil per day by 2012. Initial production from North Duri Area 12 will increase with the application of steamflood technology next year.

"The Duri Field is a remarkable base business success for Chevron. With the application of technology, we have been able to extend the life of this field and increase the amount of oil ultimately recovered," said George Kirkland, executive vice president, Upstream and Gas, Chevron.

North Duri Area 12 represents the latest expansion of the Duri field, the largest producing field Chevron operates in Indonesia. The Duri Field currently produces nearly 200,000 barrels of crude oil per day. Discovered in 1941 on the island of Sumatra, the field is one of the world's largest steamflood projects. Steamflooding is an enhanced oil recovery method that injects steam into the reservoir to increase oil recovery. At the Duri Field, steamflooding has more than tripled oil production, and has enabled the recovery of more than 2 billion barrels of crude oil.

"This remarkable achievement builds on our 84-year history in Indonesia, where we are working together with the government to efficiently develop Indonesia's crude oil, natural gas and geothermal resources," said Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Company.

Chevron Corporation is one of the world's leading integrated energy companies, with subsidiaries that conduct business across the globe. The company's success is driven by the ingenuity and commitment of approximately 59,000 employees who operate across the energy spectrum. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops and commercializes the energy resources of the future, including biofuels and other renewables. Chevron is based in San Ramon, Calif.

More information about Chevron is available at www.chevron.com.

Source: Your Oil and Gas News

Petronas, Shell bid to distribute subsidized fuels

Local units of oil and gas companies Petronas (of Malaysia) and Shell (of the Netherlands) are bidding to distribute subsidized fuels in Indonesia next year, a project currently monopolized by state-owned Pertamina, Antara reported on Wednesday.

Ibrahim Hasyim of Downstream Oil and Gas Regulatory Agency BPH Migas said the body would convene to determine fuel distributors in early December.

He said in addition to Petronas and Shell, Pertamina and five other companies were bidding for tenders. The other companies are AKR Corporation, Patra Niaga, Petrobas, Bumi Asri Prima Pratama and Trans Pacific Petrochemical Indonesia (TPPI).

Ibrahim said the winners would need to sign contracts stipulating obligations.

According to the 2009 state budget, the government will subsidize a total 36.8 million kiloliters of fuel -- mostly premium (petroleum). It has also allocated an 8 percent margin for distributors.

Source: The Jakarta Post

Exports of CPO to miss target on lower demand

Indonesia will likely export 13 million tons of crude palm oil (CPO) this year, 1 million tons short of an earlier target, as the global economic downturn has reduced demand.

The Association of Palm Oil Producers (Gapki) said Monday the export would likely drop further next year, also due to an estimated increase in domestic demand, according to Gapki chairman Akmaluddin Hasibuan.

The global economic downturn, which has led to reduced demand, is being exacerbated by falling commodity prices, prompting many importers to cancel orders or seek price renegotiations, Akmaluddin said.

According to Gapki, Indonesia, the world's largest CPO producer, is expected to produce 18.5 million tons of CPO this year and 19.5 million tons next year.

The country benefited from windfall profits generated by a boom in primary commodity prices -- including palm oil -- starting from the middle of last year.

During the January to July period of 2008, the price of CPO rose to between US$1,000 and $1,300 per ton.

The boom, which began only four to five months ago, has reversed in line with the global financial crisis, with the commodity now fetching from $400 to $500 per ton.

"We expect to see an average price of $518 a ton for CPO next year", Akmaluddin said.

The governments of Indonesia and Malaysia -- the world's second-largest producer -- have agreed on a new replanting program covering a total of 300,000 hectares of plantations -- including 50,000 hectares in Indonesia -- starting next year to help cut short-term supply and stabilize the price of the commodity.

The two nations expect the replanting effort to lift the price of CPO as the program will see Indonesia's output cut by 75,000 tons next year and Malaysia's by 500,000 to 600,000 tons.

The replanting effort will see older low-yielding trees cut down and replaced with seedlings.

Akmaluddin said he welcomed the plan, "Currently, more than a million hectares of oil palm plantations have very old plants."

Most of the plantations are owned by small-scale or seasonal farmers.

According to Gapki, up to 35 percent of the country's total 5 million hectares of palm oil plantations is owned by Indonesian small-scale or seasonal farmers. The remaining 65 percent is owned by private or state-owned companies.

Akmaluddin said the replanting program would cost on average Rp 30 million per hectare of plantations. "The government may facilitate these small-scale farmers with credit or funds to help them replant their land."

Derom Bangun, Gapki executive chairman, said private investment in replanting would be welcome as CPO was still a promising commodity. (hwa)

Source: The Jakarta Post

Bumi closes flat, in first since Nov. 6

Shares of publicly listed PT Bumi Resources plunged in early Monday trading but staged a recovery -- the first since it resumed trading Nov. 6 -- to close at Rp 710, matching the price at Friday's close.

Early Monday, share price for the nation's largest coal producer, tumbled 9.86 percent to Rp 640 (5.3 US cents) before orders were halted under the stock market's automatic shutdown scheme.

Under the scheme, orders are automatically blocked for any stocks which have declined by 10 percent or risen by 20 percent during the trading day.

But share price bounced back later in the day, curbing the free fall which has so far caused the company to lose more than 90 percent of its value since its all-time high six months ago. Bumi shares peaked in June at Rp 8,750.

Share price managed to close not lower than the previous day for the first time since trading resumed on Nov. 6 following a month-long suspension.

The suspension followed a global market rout which slashed share values for Bumi and its parent company, PT Bakrie and Brothers by almost 40 percent in early October. The rout had forced the Indonesian Stock Exchange (IDX) regulators to suspend all market activity for two days to avoid a further slide, since shares of the Bakrie flagship accounted at that time for 35 percent of all market capitalization.

Bakrie and Brothers, the investment mothership of family holdings of the politically powerful Aburizal Bakrie, also the Coordinating Minister for People's Welfare, is selling assets -- including stakes in units -- to limit share dilution amid declining value of shares it has put up as collateral for debts.

After almost a month, the IDX resumed trading of Bumi shares on Oct. 6, after the company announced it was in talks with private equity firm Northstar Pacific to sell off a 35 percent stake to raise $1.3 billion.

Since then, Bumi shares have been dropping by more than 9 percent almost every trading day.

Bumi shares only once dropped less than 9 percent; on Nov. 14 it only declined by 1.69 percent on news the company would spend Rp 8 trillion to buy back shares from the market.

Bumi's last hope rests with the Northstar deal, scheduled to be announced on Friday.

Analysts have said, however, that the Northstar deal is at risk given the steady declines in Bumi share values.

Bloomberg reported Monday that PT Tambang Batubara Bukit Asam, the state-owned mining company which is part of a consortium led by Northstar, may ask for a lower price for the proposed Bumi stake.

Source: The Jakarta Post

Oil falls below $53 in Asia after rising overnight

Oil prices fell below $53 a barrel Tuesday in Asia after surging overnight as investors mulled whether a U.S. government bailout of Citigroup Inc. restores enough confidence to staunch crude's slide since July.

Light, sweet crude for January delivery was down $1.68 to $52.82 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.

The contract overnight rose $4.57 to settle at $54.50 after the Treasury Department announced a rescue of banking giant Citigroup. Fears the sprawling financial firm would collapse sent stock markets plunging and the price of oil to a 3-year low near $49 last week - a third of its peak near $150 a barrel in July.

But some oil market watchers think euphoria over the government lifeline for Citigroup will soon give way to more dismal news about a severe global economic slowdown and trigger a test of the lows that oil hit last week.

"We could see some renewed oil price weakness in the very near term as economic data from the U.S. and Europe is likely to be weak," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "That would keep pressure on the oil price."

Investors are eying the Organization of Petroleum Exporting Countries, which accounts for 40 percent of global supply, for signs the group may reduce output quotas at an informal meeting Nov. 29 in Cairo.

Venezuelan Oil Minister Rafael Ramirez said Sunday that OPEC should cut oil production by 1 million barrels per day at the Cairo meeting. OPEC President Chakib Khelil said Monday that if the organization met today, a cut of 1 million barrels would not be enough to support oil prices.

The group, which cut output by 1.5 million barrels a day last month, will hold its next official meeting on Dec. 17.

"My guess is OPEC is looking to cut production by about 1 million barrels a day at the December meeting," Moore said. "If there is compliance with the previous cut, it tightens the oil market up quite a bit."

Investors brushed off OPEC's output cut last month, but lower production should eventually help support higher prices, Moore said.

"By late this year or early next year, as the OPEC cuts start to bite a little more, you might see a modest recovery in oil prices," he said.

In other Nymex trading, gasoline futures dropped 1.49 cent to $1.13 a gallon. Heating oil slid 1.94 cents to $1.77 a gallon while natural gas for January delivery fell 1.1 cents to $6.82 per 1,000 cubic feet.

In London, December Brent crude fell $1.81 to $52.12 a barrel on the ICE Futures exchange.

Source: The Jakarta Post

Govt told to act against illegal logging, fishing, mining

Contributions to state income from the exploitation of natural resources will remain lackluster unless efforts are intensified to curb illegal activities in the forestry, mining and fishery sectors, a report says.

Illegal logging, mining and fishing are not only badly hurting the environment, but they are also causing trillions of losses in potential state income, Greenomics Indonesia said last week.

In the report, executive director Elfian Effendi said illegal logging and fishing alone caused Rp 60 trillion (about US$5.35 billion) in losses to the nation every year, which could have been used to pay the nation's mounting debts.

"Non-tax revenue from the forestry, mining and fishery sector cannot pay the nation's debts, for instance, because they account for 0.92 percent, or Rp 9.5 trillion of next year's budget of around Rp 1,000 trillion," he said.

"It is ironic how the three sectors play such a small part in the budget, yet illegal practices in those sectors keeps ruining the environment."

Under the 2009 state budget, the government will spend around Rp 165 trillion to pay back the nation's debts -- both principals and interests -- while the non-tax revenues from the three sectors only make up around 6 percent of it.

Moreover, Elfian added, the majority of the revenue will be disbursed to producing regions as part of a so-called revenue sharing scheme between the central and local governments.

"For example, in the 2009 budget, the central government will receive around Rp 2.4 trillion from the three sectors, because some Rp 7.1 trillion out of the total revenue must be transferred to the regions," he said.

Accelerating debt payments means the government could allocate more funds to more productive activities to help boost economic growth.

Elfian said that unless the government acts more aggressively to reduce illegal logging, fishing and mining, the country would continue to suffer a rapidly deteriorating environment and an inability to gain greater economic gains from the three sectors. (dis)

Source: The Jakarta Post

Pertamina strikes oil in West Java

PT.Pertamina EP said it had discovered oil in its recent drilling of Pondok Makmur-2 well in West Java.

CEO Tri Siwindono declined to give detail, saying that release about the discovery would be issued on Friday.

Pondok Makmur is part of Pondok Tengah oil, gas field complex, where Pertamina is currently producing oil and gas.
(godang)

Source: http://www.petromindo.com

RI coal mines attractive for buyout

A drop in the share price of Indonesian coal companies is making the sector more attractive for potential acquisitions by foreign investors, a report from global rating agency Fitch Ratings says.

“Given the lower value of coal mines compared with earlier in 2008, there will likely be a re-emergence of foreign interest in acquiring stakes in Indonesian coal mines to ensure future coal supply,” Fitch Ratings’ analysts Jessie Wahab and Kalai Pillay said in a report.

Shares in Indonesian coal companies have taken a heavy battering lately, dragged down in part by an decline in oil prices, exacerbated by ongoing concerns of a global recession, which would eventually reduce demand.

The share price of PT Bumi Resources, Asia’s biggest thermal coal exporter, has declined by more than 90 percent, to close at Rp 710 (US60 cents) on Friday, after peaking at Rp 8,500 in
mid-June.

Shares in PT Adaro Energy, Indonesia’s second biggest coal miner, have fallen 56.36 percent since their initial public offering in July this year. Adaro’s shares, priced at Rp 1,100 each in the IPO, closed at Rp 480 on Friday.

The value of shares in PT Indo Tambangraya Megah, Indonesia’s fourth largest coal company, have dropped 60.60 percent since the start of the year. Its shares, trading at Rp 18,150 on
Jan. 2, were priced at Rp 7,150 on Friday.

Such a phenomena, the report says, attracts global producers, particularly from coal-hungry India, to look for opportunities in Indonesia’s coal mines.

According to Fitch Ratings, over the past few year, Indian global producers have been actively seeking to acquire coal blocks in Indonesia to meet India’s growing demand for coal, as it aggressively expands power networks.

To India, Indonesia presents an attractive market, because of both its prox-imity and the higher caloric value of its coal, the report added.

So far, the biggest transaction between Indonesia and India has been Tata Power’s acquisition of a 30 percent stake in PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia in 2007, valued at US$1.3 billion.

Investors from other regions have also shown interest in acquiring Indonesian coal mines. Northstar Pacific, for example, is in talks to finalize a purchase of a 35 percent, or $1.3 billion stake in Bumi.

The lower value of coal mines has also led to increased interest in the sector from local companies. Tin miner PT Timah and a heavy equipment supplier PT United Tractors are reportedly looking for coal concessions to acquire.

However, Fitch Ratings said this potential acquisition might be deterred because of uncertainty in regulations, as the government and lawmakers have yet to pass the new mining law.

Also in the report, Fitch said it expects the country’s coal production output to grow at a lower rate than expected, due to delays in planned production increases and the fall in the value of mineable reserves, given the decline in coal prices.

Source: The Jakarta Post

Govt to enforce coal DMO in 2009

The government may require coal producers to set aside at least 20 percent of their production to the domestic market next year and impose sanction -- in the form of output reduction -- if they fail to comply.

Bambang Gatot Ariyono, director for coal and mineral development at the energy and mineral resources ministry, said Thursday the regulation would take effect next year and form part of the companies' domestic market obligation (DMO) scheme.

"Their production target for the following year will be reduced as much as their unfulfilled obligation in the current year," Bambang said, explaining the proposed sanction.

Coal producers are required to seek government approval for their production target annually.

The government is still formulating the percentage of required DMO for coal producers, but Bambang said the DMO would be likely more than 20 percent of the annual production of each company.

In response, coal producers are still waiting to see how the implementation of DMO will work out.

"We are waiting for the government decision. Once the DMO regulation in place, we will definitely fulfill the obligation," Jenny Quantero, a director at Indonesia's eighth biggest coal producer PT Bayan Resources, told The Jakarta Post.

Bayan expects to increase its coal production to 9 million tons this year from 4.7 million tons last.

Bob Kamandanu, president director of PT Berau Coal, Indonesia's fifth largest coal producer, said he was confident that Berau would not be affected by sanctions.

"We have no problem with a DMO of 20 percent, because even without the DMO we have supplied 35 percent of our coal to the domestic market," Bob told the Post, adding that the situation might be different for other coal producers.

Berau is forecast to produce 14 million tons coal this year.

As the DMO would soon be mandatory for coal producers, Bob warned domestic buyers to work out long term projections for their coal consumption.

Bob also suggests the government should create a floating price system for coal. The government has stipulated that the ceiling price for the domestic market should be the lowest export price.

As the coal price fluctuates, Bob said the lowest price should be based on the price when a contract was signed, instead of a flat long-term price.

Bambang said the government was working on formulating a coal price index for Indonesia.

There would be a ceiling price for coal sold on the domestic market and a floor price for exported coal, he added. The government will also impose fines on coal producers that violate this price regulation.

Source: The Jakarta Post

Indonesia to Order Oil, Gas Firms to Keep Funds in Local Banks

The Indonesian government will order oil and gas companies to use local banks to keep tens billions of US dollars of funds for energy projects as an effort to boost falling rupiah, the oil-and-gas regulator body BP Migas said here Thursday.

The effort comes as the country is struggling to strengthen rupiah value against the US dollar which has touched to the lowest level of more than 12,000 following the global financial routs.

"This policy aims to help boost rupiah value against the dollar, " BP Migas deputy for finance Djoko Harsono told Xinhua by phone.

According to the deputy, the biggest Southeast Asia economy plans to finance oil and gas projects over 11 billion US dollars in 2008 and 12 billion US dollars in 2009.

He said that the order would be imposed within one or two months.

"We wants contractors in energy projects to put all their US dollars funds in local banks, especially state-owned banks," he said.

According to the deputy, not all of the contractor's funds so far, have been kept in national banks.

The country's central bank has restricted purchasing of US dollars and provided assistance funds for local banks in a bid to maintain the value of rupiah in a rational level and restore confidence on economy. The financial authorities have also ordered people to release their US dollars rather than to keep them.

The global economic turmoil has led investors sell off their assets from emerging market, including in Indonesia, which depreciated rupiah value by up to 20 per cent low against the dollar.

Indonesia imported a number of essential products such as foods, failure to stabilize rupiah will raise pressure cost the import payment which could disturb the country's balance of payment.

Indonesia has been gearing up for massive energy projects to support rising energy demand amid the declining of oil and gra products due to aging wells and low investment.

The country's oil production has been declined to below one million barrel a day since February, and led Indonesia to become a net oil importer country.

Originally published by Xinhua news agency, Beijing, in English 0627 20 Nov 08.

(c) 2008 BBC Monitoring Asia Pacific. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.

Source: Energy IQ

Coal producers prepare for tough times ahead

Two coal producers are revising down their targets for next year and resetting priorities given global economic uncertainties.

PT Berau Coal, Indonesia's fifth largest coal producer, has revised down its planned capital expenditure for next year to US$27 million from its initial plan of $60 million.

"Preparing for the worst, we will be careful in setting our priorities," Berau's president director Bob Kamandanu said on Wednesday.

Bob said the company has set a lower expenditure target for next year because it also had revised down its production target for 2009. He said Berau would produce between 15.5 million and 16 million tons of coal, down from an initial target of 18 million tons.

By end year 2008, Berau forecast it would produce about 14 million tons of coal compared to its initial target of 15 million tons.

Bob said the new 2009 target would be easier for the company's partners to achieve under the current unfavorable economic conditions.

"We pretty much depend on our contractors who work mainly with heavy equipment. This heavy equipment is not purchased with cash, but acquired through leasing which is harder to arrange during an economic crisis.

"If we set high targets and offer more coal to buyers, we will face penalties if we cannot meet our commitments," Bob said.

He pointed to the likelihood of decreasing demand from importing countries, including China, as another reason for the company to lower its production target.

With reduced investment spending, a number of projects would consequently be delayed, Bob said.

One of these is a port upgrading project in Suaran, Berau Regency, East Kalimantan. Previously the project was expected to be finished by 2010, but the company would now delay completion until 2011.

Another coal producer, state owned PT Tambang Batubara Bukit Asam (PTBA), said it would also reconsider its long term projects, including a steam-turbine power plant project.

"We are still analyzing our plans. But, it seems that we may reconsider projects that need finance from overseas funds," said president director Sukrisno, so as to respond to the ongoing global credit crunch.

He was quick to add however that the company would not back down from any plans that could harm directly the company's production capacity. Bukit Asam for example would move forward its project to enlarge its dock facilities at Tarahan, Lampung Province.

Bukit Asam forecasts it will produce 10 million tons of coal this year.

It has yet to finalize its plans for 2009, but Sukrisno said production would likely increase due to the expected high demand for coal because of the government's 10,000 megawatt electricity program.

Source: The Jakarta Post

Kalimantan Gold Corporation Limited

Kalimantan Gold Corporation Limited (TSX VENTURE: KLG)(AIM: KLG) has signed an Option Agreement with PT Indobara Pratama ("IBP") to bring the coal deposit on IBP's 100%-owned coal KP (the "Concession") into production and acquire up to an 80% interest in IBP. The project is permitted for production and the potential to be an open cut coal deposit. The work done on the Concession to date indicates a potential deposit of between 55-60 million tonnes of approximately 5,400 kcal/kg coal. The coal occurrences in the concession area are ranked sub-bituminous thermal coal which are becoming increasingly sought after as a reliable new supply of low ash and low sulphur coal to the new generation of power stations currently being constructed in many parts of Asia, including Indonesia. The Concession located in East Kalimantan, Indonesia is 130 kilometres northwest of Samarinda and is accessible by road and river (to view the figures and pictures accompanying this press release, please click on the following link: http://media3.marketwire.com/docs/klg_figure.pdf).

The potential quantity and grade is conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Kalimantan Gold CEO Rahman Connelly comments: "After reviewing the project we believe it meets our criteria for a viable near production coal deposit. We have had early discussions with potential buyers of the off-take and it is hoped that during the due diligence period these buyers will become a source of either equity or debt capital to fund Kalimantan Gold's entry into coal production. We will also consult with Macquarie Bank, who have expressed interest in financing a coal production project with us, as part of our evaluation of the IBP Concession as a production opportunity."

The Concession has substantial exploration potential and that according to the current owners the coal deposit is permitted and ready to place into production. Transportation to the nearest coal terminal by river is reasonable and the acquisition of IBP will include a barge and conveyor loading system. Only 2,700 hectares of the total 4,993 hectare Concession has been explored.

The Company does not have a study to determine if the project is economic and there is no certainty the project will be found to be economic.

The Option Agreement

Kalimantan Gold has an exclusive 90 day option to undertake due diligence on IBP and we will fund and undertake a 3,000 metre drilling program during the option period at an estimated cost of $150,000. On its completion, the Company may provide notice it wishes to proceed to acquire shares of IBP based on the value of $1 per tonne of Proven Recoverable Coal Reserves ("PRCR") estimated in accordance with JORC (the "Purchase Price"). A Share Purchase Agreement ("SPA") will be executed and payment of the Purchase Price will be made in four stages as follows: 5% payable by February 15, 2009; 15% payable by March 15, 2009; 40% payable by July 15, 2009 and the final payment of 40% payable on the December 15, 2009 or the date of the first commercial shipment of coal from IBP's mine if this is earlier. Upon the third payment being made, 48% of the shares of IBP will be transferred to the Company with another 32% of the IBP shares transferred when the fourth and final payment is made. All IBP costs from the time the SPA is executed until the first shipment of coal shall be borne 80% by the Company and 20% by the selling shareholders of IBP.

Technical Discussion

The coal occurrences within the concession area occur within Balikpapan Formation rocks, a well-known coal-bearing formation in East Kalimantan. Exploration to date has outlined two main seams with thicknesses between 5-7 metres and 13-20 metres respectively. This data was obtained from 63 surface exposures and 20 drill holes that have been completed in the concession area to a depth of 80-100 metres. The seams can be described as low sulphur (less than 0.20%) and low ash (less than 5%) with an average calorific value reported from the vendor documents as approximately 5,400 kcal/kg (air dried basis) based on sampling from drill cores and outcrops. The seams strike north-south and dip between 5-15 degrees to the east.

The property has been subject to a detailed review and geological modelling but the results require validation before being classified into a reportable category and due diligence, currently being planned for the property, will aim to verify the conclusions made within various studies available on the coal occurrences in the area. The concession is located approximately 20 kilometres from a river suitable for barging operations and the operational scenario suggests a road haulage-barging operation via the Mahakam River to a loading point at the mouth of the Samarinda Delta.

All data, as disclosed in this press release, has been verified by Brett Dennis Gunter, the Company's Qualified Person for the coal prospects and a principal of PT GMT. Mr Gunter, who acts as a technical consultant to the Company, is a geologist with over 18 years experience in exploration and mining and has more than 12 years experience in Indonesia in various commodities, including coal. He is a member of the AusIMM.

About Kalimantan Gold

Kalimantan Gold Corporation Limited is a junior exploration company listed on both the TSX Venture Exchange in Canada and on AIM. The Company is active on gold, coal and copper prospects in Indonesia and has exploration rights in three areas: the Jelai epithermal gold prospect in East Kalimantan, five coal prospects, also in East Kalimantan and porphyry copper and gold prospects in Central Kalimantan.

RFC Corporate Finance Ltd acts as KLG's Nominated Adviser for the purposes of its AIM listing, contact Stuart Laing, ph: +618 9480 2506 or email: stuartl@rfc.com.au.



The TSX Venture Exchange does not accept responsibility for the adequacy or the accuracy of this release.

Contacts:
Kalimantan Gold Corporation Limited
Rahman Connelly
Deputy Chairman and CEO
+61 7 552 32298 or +61 418 116 955
Email: rconnelly@ozemail.com.au

Kalimantan Gold Corporation Limited
Nick Cottam
Corporate Relations Manager
+44 (0) 1394 384115
Email:nick@nickcottam.com
Website: www.kalimantan.com

Source: http://www.earthtimes.org/articles/show/kalimantan-gold-signs-option-on-coal-opportunity,623825.shtml

Adelphi acquires Indonesian production sharing contract

Adelphi Energy Limited is pleased to announce that it has acquired a majority interest in a new production sharing contract ("PSC") in Indonesia.

Pursuant to a joint bid agreement ("JBA") with Continental Energy Corp and GeoPetro Resources Company, the group's joint venture company, ACG (South Bengara-II) Pte. Ltd ("ACG"), signed a new PSC for the South Bengara-II block. Adelphi owns a 50.002% interest in ACG and its new PSC.

The South Bengara-II PSC was one of several new PSC's signed by the minister of Mines and Energy at a ceremony in Jakarta yesterday. The award is a result of ACG's winning bid submitted in the August 2008 international bid round held by the Indonesian ministry of oil and gas.

ACG, in accordance with the terms of its bid and the PSC, is obliged to pay a signing bonus of US$1 million and complete a work programme during the first three PSC contract years which includes conducting geological and geophysical field surveys and studies, acquiring at least 100 line kilometres of 2D seizmic, and drilling one exploration well for a total minimum expenditure of US$7,850,000.

In accordance with the provisions of the JBA, Adelphi will be free carried through the first US$4 million of gross expenditure on this block including the initial US$1 million signing bonus.

This is expected to cover the first two-years of the PSC term.

The South Bengara-II Block encompasses an area of 5,257 square kilometres and lies onshore on the northeast coast of the island of Borneo in the Indonesian province of East Kalimantan. The block contains an existing gas accumulation, several oil and gas seeps, and large prospects and leads. It also lies adjacent to and immediately south of the Bengara-II Block which is partly owned by Continental and GeoPetro and in which a drilling programme revealed encouraging results last year.

Continental will have management rights over ACG's operations during the initial exploration phase of the PSC given the synergies with its existing Indonesian interests and its fully staffed Jakarta office with experienced technical and commercial personnel.

Commenting on the award, Chris Hodge, Adelphi's Managing director said that "we are delighted to have signed this PSC with the government of the Republic of Indonesia and we look forward to working closely with our new partners to immediately commence exploration work on this prospective acreage.

Importantly, Adelphi has no cost exposure towards this PSC for the initial years and has retained a significant equity interest which provides us with options to fund future drilling expenditures."

This release is available on the Company's website at:

Source: http://www.adelphienergy.com.au

Pertamina starts supplying biodiesel to industries

State-owned gas and oil company Pertamina is to start supplying biodiesel to 28 industrial consumers in Jakarta, Banten and West Java, here Tuesday, a Pertamina executive said. ANTARA reported (11/11/08).


The operation would constitute the first phase of a plan to supply biodiesel to 436 industrial consumers in the three provinces after the implementation of a similar program for consumers in the transporation sector, Maulanatazi HZ, general manager for fuel marketing of Pertamina's Region III, said.

"The biodiesel will have a FAME (fatty acid methyl ester) content of five percent," he said.

Pertamina would on Tuesday also raise the FAME content of biodiesel at gas stations to five percent, Maulantari added.

The start of the biodiesel supply to industrial conusmers would be done at Peramina's Plumpang fuel oil depot in North Jakarta witnessed by Energy and Mineral Resources Minister Purnomo Yusgiantoro and Pertamina Managing Director Ari Soemarno.

The program was in line with the Energy and Mineral Resources Minister's Regulation No 32/2008 on mandatory minimum biofuel usage.

Maulanatazi said at first the mixing of FAME and diesel fuel was carried out in temporary tanks such at Tanjung Gerem, Padalarang, Ujung Berung, Cikampek, Tasikmalaya and Balongan.

However, the mixing would in the future be done directly at storage tanks in Plumpang, he said. "The mixing job will take six months' time since certain tools are required," he said.

All the 1,287 gas stations in Pertamina's Region III selling 200,000 kiloliters of fuel per month were scheduled to be offering biodiesel with a FAME content of five percent by the end of November.

The Plumpang depot had the largest fuel oil storing capacity in the country with the volume reaching 318,515 kiloliters comprised of diesel oil 91,466 kiloliters, premium 119,749 kiloliters, pertamax plus 11,800 kiloliters, pertamax 22,000 kiloliters, and kerosene 73,500 kiloliters.

Fuel oil supply to the Plumpang depot takes place through a pipeline from Pertamina's oil refinery at Balongan, Indramayu, West Java.

Source: BKPM
http://www.bkpm.go.id/en/node/3119

LUNDIN PETROLEUM SIGNS NEW PRODUCTION SHARING CONTRACTS IN INDONESIA

LUNDIN PETROLEUM SIGNS NEW PRODUCTION SHARING CONTRACTS IN INDONESIA

Lundin Petroleum AB (“Lundin Petroleum”) is pleased to announce that it has signed two new production sharing contracts (PSCs) for the Baronang and Cakalang Blocks with BPMIGAS, the Indonesian oil and gas regulating authority in Jakarta on November 13, 2008. Both blocks are located in the Natuna Sea, offshore Indonesia.

The Baronang Block covers an area of approximately 5, 157 km² and the Cakalang Block 4,520 km². Previous drilling activities on the blocks have confirmed the presence of active petroleum systems in or adjacent to both blocks. Several prospects and leads have been identified in the blocks from earlier 2D seismic campaigns.

Lundin Petroleum holds a 100 percent interest in both the Baronang and the Cakalang blocks.

Lundin Petroleum is a Swedish independent oil and gas exploration and production company with a well balanced portfolio of world-class assets in Europe, Africa, Russia and the Far East. The Company is listed at the Nordic Exchange, Sweden (ticker "LUPE"). Lundin Petroleum has existing proven and probable reserves of 184,2 million barrels of oil equivalent (MMboe) as at 1 January 2008.

Source: http://www.lundin-petroleum.com/Press/pr_indonesia_13-11-08_e.html

Biofuel Will be Available in Petrol Stations Around Indonesia by 2010

PT Pertamina has targeted that biofuel products such as Biopertamax, Biopremium, and Biosolar, will be available in petrol stations around Indonesia by 2010.

By the end of 2008, Pertamina has targeted Biofuel distribution in West Java, East Java, and Bali. By 2009, this product will be distributed in all regions of Java, Sumatra, part of Kalimantan and in Makassar, South Sulawesi. This is explained by the Pertamina Managing Director, Arie H. Soemarno during the launching of Pertamina Biosolar for industry and the expansion of biofuel sales in petrol stations around Indonesia on Tuesday (11/11).

As a national company with 51 years of experience in the oil and gas sector, Pertamina has learned that technical difficulties is not a major obstacle in the distribution of fuel. By distributing biofuel, Pertamina has contributed to the central government’s plan for nature conservation.

The current biofuel sold by Pertamina will be able to be used for motor vehicles and the industrial sector. The use of biofuel for motor vehicles will not need any form of engine modification, while at the same time increasing engine life because of its cleaning attributes and being environmentally friendly.

Source: DESDM

PTTEP Wins Gas Exploration Rights in Indonesia

Thailand’s PTT Exploration and Production along with Murphy Oil and Inpex have won the exploration rights for the Semai II Block off West Papua as part of Indonesia’s 2007 licensing round.

During the first three years the partners will shoot 3D seismic over the 3379 square metre Block and drill three exploration wells.

PTTEP holds a 33.33% share in the block, while Murphy Oil, the operator holds 33.33%, and Japan’s Inpex holds the remaining 33.33% stake.

Semai II is PTTEP’s third petroleum block in Indonesia, following the Merangin-1 and Bangara-1 Blocks.

Source: Upstream Online

http://www.upstreamonline.com/live/article166435.ece

Govt, BP Migas sign four coal contracts

The government and Upstream Oil and Gas Regulator (BP Migas) signed four contracts on Thursday to develop coal bed methane (CBM) in Kalimantan, with investment totaling US$20.3 million, Antara news agency reports.

Energy and Mineral Resources Minister Purnomo Yusgiantoro and BP Migas chairman R Priyono signed the contracts with four consortiums that won in the tender process.

The four consortiums were BP Indobararambai Gas Methan (to develop CBM at Barito Banjar 1 with an investment value of $3 million); PT Barito Basin Gas (Barito Banjar 2, $3 million); a consortium of PT Pertamina Hulu Energi Metana Kalimantan and Sangatta West CBM Inc. (Sangatta, $7.7 million); and a consortium of Kutai West CBM Inc. and Newton Energy Capital Limited (Kutai, $6.6 million).

In addition to the CBM contracts, the government and BP Migas also signed 29 production sharing contracts to develop oil and gas fields.

Source: The Jakarta Post
http://www.thejakartapost.com/news/2008/11/13/govt-bp-migas-sign-four-coal-contracts.html

Govt, BP Migas sign four gas contracts

The government and Upstream Oil and Gas Regulator (BP Migas) signed four contracts on Thursday to develop coal bed methane (CBM) in Kalimantan, with investment totaling US$20.3 million, Antara news agency reports.

Energy and Mineral Resources Minister Purnomo Yusgiantoro and BP Migas chairman R Priyono signed the contracts with four consortiums that won in the tender process.

The four consortiums were BP Indobararambai Gas Methan (to develop CBM at Barito Banjar 1 with an investment value of $3 million); PT Barito Basin Gas (Barito Banjar 2, $3 million); a consortium of PT Pertamina Hulu Energi Metana Kalimantan and Sangatta West CBM Inc. (Sangatta, $7.7 million); and a consortium of Kutai West CBM Inc. and Newton Energy Capital Limited (Kutai, $6.6 million).

In addition to the CBM contracts, the government and BP Migas also signed 29 production sharing contracts to develop oil and gas fields.

Source: The Jakarta Post

Government to cut subsidized fuel price

Responding to a fall in global crude oil prices, the government will cut the price of subsidized Premium gasoline by Rp 500, or 8.3 percent, effective Dec.1, and continue to adjust it monthly, economic ministers announced Friday.

The cut will bring the price of Premium to Rp 5,500 per liter. The government has decided to keep the prices of subsidized diesel and kerosene for December unchanged.

Acting Coordinating Minister for the Economy Sri Mulyani Indrawati said the decision was in response to falling crude oil prices and to help ease people's burden because of high commodity prices in the recent months.

"The decrease is expected to revive consumer spending as well as the business climate. This will also counter the impact of the global financial crisis on our economy," Mulyani said after a meeting at the presidential office.

The central bank says the economy is entering a slowdown in the last quarter of the year as the global turmoil begins setting in. Year-on-year growth is projected at 5.9 percent in the quarter, less than the 6.4 percent recorded in the third quarter.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said the government would also adjust the prices of subsidized fuels -- gasoline, kerosene and diesel -- every month to keep in line with global crude prices.

He was quick to add however, that in the event of a spike in global prices, the government would cap the price of subsidized gasoline at the current Rp 6,000 per liter.

In May, the government raised the prices of Premium gasoline, diesel and kerosene by an average of 28.7 percent due to skyrocketing global oil prices at the time.

Crude oil prices have since dropped by more than half after hitting record highs of more than $147 per barrel in July.

On Thursday, Brent North Sea crude for December dropped US$1.13 to $60.74 on London's Intercontinental Exchange (ICE), AFP reported. Light sweet crude for December delivery in New York fell $1.32 to $63.98 a barrel.

The current subsidized prices for diesel and kerosene are Rp 5,500 and Rp 2,500 per liter respectively, while the prices of non-subsidized ones, sold to industry, are Rp 6,065 per liter for diesel and Rp 6,687 per liter for kerosene.

Despite the price cut, Mulyani said the allocation for the fuel subsidy in the state budget would remain at Rp 57.6 trillion for the three types of fuel, with the possibility of change in the composition.

The reduction will only be effective until the end of 2008, she said, adding the government would consult further with the House of Representatives on monthly price adjustments and the impact on the 2009 state budget.

"The government will conduct monthly evaluations to monitor various indicators affecting fuel prices, including global prices, the currency exchange rate and fuel consumption, so we will still be able to sustain the fuel subsidy from the state budget," Mulyani said.

Politically, a fuel price cut would provide a major popularity boost for the current administration led by President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla, ahead of next year's general elections.

Source: http://www.thejakartapost.com/news/2008/11/07/govt-cut-subsidized-fuel-price.html

Indonesia Awards 9 More Oil, Gas Exploration Licenses

Indonesia has awarded more oil and gas exploration rights on nine blocks to energy companies including U.S. firm Hess Corp, a senior mines and energy ministry official said on Friday.

It has been offering new exploration rights and financial incentives for exploration in a bid to stem its steady production decline, which has turned the former OPEC member into a net importer of crude oil in recent years.
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Evita Legowo, a director general at the ministry, said Hess was awarded Semai V block, an offshore block west of Papua province.

"There were many companies have bid for Semai V but Hess gave better terms for exploration," Legowo told reporters.

Mines and Energy Minister Purnomo Yusgiantoro said the companies which awarded exploration rights will spend about $465 million for the first three years.

"There are potential oil and gas reserves at those blocks but we have to wait until the companies explore the wells there before we know the amount of reserves," Yusgiantoro said.

Indonesia also awarded Semai II blocks on offshore West Papua province to a consortium of Japan's Inpex, Thailand energy firm PTT, and U.S. firm Murphy Oil .

Legowo said the government awarded Downstream Mahakam block onshore of East Kalimantan to Singapore Petroleum.

The government has awarded Gunting block, onshore and offshore of East Java province, to Esso Exploration International, a unit of Exxon Mobil.

Five other blocks were awarded to little-known domestic and foreign companies.

Earlier this month, Indonesia awarded oil and gas exploration rights on 22 blocks to energy companies including Chevron Indonesia, a unit of U.S. oil major Chevron, and Conoco Phillips.

Officials have said that Indonesia has 8.4 billion proven and potential oil reserves. Indonesia produced 846,300 barrels per day (bpd) of crude oil in October, down from 862,200 bpd in September.

Copyright 2008 AFX News Limited. All Rights Reserved.
Source: http://www.rigzone.com/NEWS/article.asp?a_id=68674

Onshore Drilling Safety Operation Seminar

Onshore Drilling Safety Operation

Onshore drilling operations have many risks and hazards to health, safety and environment, and those who could be impacted by the hazards and risks are man power/employee (People), Equipment/tools, Materials and Environment around/close to drilling locations area. High-standard of HSE in drilling operations could be achieved if the labours/employees are well trained both in the drilling technology/operations and HSE related aspects. Also, the supplies/equipments which are used need to match with design operations standard and are well organized, and are operated referring to the drilling program and in good engineering aspects. Main factor of good drilling operations, healthy, safely and environmental friendly are well planning and good communication among employees from rig manager to roustabout and other parties involved in the drilling operations.


Course Objective

After the course, the participants expected to earn:

1. Knowledge, and understanding to executing Laws, regulations and Procedures of the Government of Republic Indonesia regarding HSE matters in drilling operation onshore.

2. Planning, Organizing, Actuating, and Controlling onshore drilling operations to achieve smoothly, healthy, and safely, with no negative result in occupational health, or no accident, fire, and pollution to environment.



Speaker :

Didi Sugandi, Ir.

1. Ir. Didi Sugandi has totally 30 years of hands on experience in production operation, and HSE (Health, Safety, and Environment) at Stanvac Oil, Huffco/VICO, JOB Pertamina-Gulf Resource, and a Geothermal Company (Karaha Bodas). He was successful to implement ISRS (International Safety Rating System) audit at VICO Indonesia in 1993-1996. His last position was HSE Manager. He has been for years becoming HSE course leader at both in-house and public course, and HSE consultant at companies of Oil & Gas, Geothermal, Petrochemical, Cement, Fertilizer Plant, Electronics, Electrical Power Plant, Agro/Plantation, etc. He completed his petroleum engineering program from AKMIGAS Cepu in 1977, and from UPN Veteran Yogyakarta in 1991.



Outline :

1. Introduction to Laws/Regulations of Republic of Indonesia which related to drilling operation in oil& gas, and geothermal,:

a. Law no.1 year 1970 regarding safety

b. Mijn Politie Reglement/ Regulation of mining policy statute book 1930 no.341

c. Guidance of execution of onshore drilling operation from Directorate General of gas and Oil (MIGAS)

d. Code/law and its regulation related to drilling operation and geothermal

2. Introduction to Loss Control Management.

3. PPE (Personnel Protective Equipment) in drilling operations

4. HSE aspects at preparation stage of onshore drilling operations

5. Safety equipment aspect of onshore drilling which cover, for example:

a. Hoisting system (derrick/mast, substructure, Rig floor, draw works, Crown block, 7.

b. Travelling Block, Hook, Elevator, Drilling, Drilling Line)

c. Rotating system (Rotary table, Master Bushing, Kelly Bushing, Rotary slips, make up & break out tongs, swivel, Kelly, Kelly saver sub, drill collar, specialized down hole tools bit)

d. Circulating system (drilling fluid/mud, mud house, steel mud pits/tanks, mixing hopper, chemical mixing barrels, bulk mud storage bins, water tank, reserve pits, discharge & return lines, stand pipe, rotary house, mud pumps, special pumps & agitators, settling tanks, mud gas separator, shale shaker, degasser, desander, desilter)

e. Blow out prevention system (accumulator, BOP stacks, choke manifold, kill line)

f. Power system (prime movers, power transmission system)

g. Support equipment such as Crane, Dozer, Forklift, Backhoe, Excavator, Vacuum truck, and other transportation requirements.

6. HSE audit and inspection in onshore drilling operations

7. Permit to Work System in onshore drilling operations

8. Prevention, handling and controlling anti fires in onshore drilling operations

9. Accident/incident review (blow-out, fire etc) in onshore drilling operations

10. Handling of hazardous chemical in onshore drilling operations

11. Case study to analyze of equipment inspection in onshore drilling operations


Untuk pendaftaran atau informasi lebih lengkap, silahkan hubungi

Sdr. Randy, Sdri. Tety atau Sdri. Yanthi di

T. (021) 719 1612 (Hunting)/ 719 9555 (Hunting)

F. (021) 719 9552

Date :

Wednesday, 12-11-2008 - Friday, 14-11-2008

08:00 AM - 04:00 PM



Venue :

Holiday Inn Hotel

Jl. Ir. H. Juanda No. 33

Bandung, INA

Fee : Rp. 7.150.000

- The price exclude V.A.T 10%
- The course fee is included, Meals (2x coffee break and lunch), Training Kits, Training Materials (Hardcopy + Softcopy), Documentation and Certificate of Completion.