Thursday, June 25, 2009

Oil and Mining Updates from Indonesia

- Indonesia's 2010 oil and gas output seen unchanged at 960,000 b/d
- Pertamina to announce Cilacap EPC contractor in October
- Indonesia's Pertamina not to increase gasoline imports in July
- update: Pertamina buys BP's 46% stake in Offshore Northwest Java block
- Indonesia Oil Drilling Ops Halted Over Land Dispute - Report
- Indonesia's Medco Energy To Repay $130 Mln Debt Next Month
- Indonesian LNG Plant To Start Production Later This Month
- Indonesia PLN says to raise up to $2 bln from global bonds
- Pertamina, Arrtu To Build Methanol Plants For $1.9 Bln
(Courtesy Joyo News Service)

Platts Commodity News
June 25, 2009
Indonesia's 2010 oil and gas output seen unchanged at 960,000 b/d
Jakarta -- Indonesia's oil and condensate output in 2010 is
likely to remain unchanged at 2009's target of 960,000 b/d, even
though output from the Cepu field was expected to resume, a
senior government official said Thursday.
"The figure of 960,000 b/d includes Cepu production, which will
contribute 20,000 b/d, but be offset by natural decline of 12% a
year," Energy and Mines Ministry director general of oil and gas
Evita Legowo said.
Production at Cepu, which saw first oil in December 2008, was
halted April 1 due to pipeline delays, which have since pushed
back the restart from July to August. It had initially been
expected to reach peak production of 165,000 b/d in 2012-2013.
The biggest country's oil producer, Chevron Pacific Indonesia,
expects to pump 364,800 b/d in 2010 and state-owned Pertamina
131,800 b/d, Legowo said.
The official 2010 output target will be set by parliament in the
coming weeks and announced in the 2010 state budget, Legowo said.
Indonesia's oil and condensate output averaged 951,833 b/d over
January-May, below its targeted 960,000 b/d. Output in May rose
0.25% from April to 824,783 barrels/day of oil and 116,800 b/d
of condensate.
However, the country produced an average of 7.773 Bcf/d of gas
January-May, above the 2009 target of 7.526 Bcf/d. The
government estimates gas output will further increase 1.75% to
7.658 billion cu ft/d in 2010.
The country produced 7.653 Bcf/d of gas in May, 1.8% less than
7.796 Bcf/d in April.
It missed its 2008 gas production target of 7.757 Bcf/day,
pumping only 7.478 Bcf/day.
Indonesia has 170.1 Tcf of proven, probable and possible gas
reserves, according to upstream regulator BPMigas. However, it
has seen its crude output fall in recent years due to natural
decline at aging fields. While meeting its 2008 target for oil
and condensate output of 977,000 b/d by pumping 988,060 b/d, it
has become a net importer rather than exporter and withdrawn
from OPEC.
Anita Nugraha,
Platts Commodity News June 25, 2009
Pertamina to announce Cilacap EPC contractor in October
Jakarta -- Indonesia's state-owned oil and gas company Pertamina
will select the engineering, procurement and construction
contractor for its Cilacap refinery expansion in October this
year, a senior official said Thursday.
"The EPC announcement will be made in October this year,"
Pertamina's processing director, Rukmi Hadihartini, said.
The company had delayed the selection of the EPC contractor for
its Cilacap refinery expansion due to the global economic
Pertamina invited bids for the Cilacap expansion project in
October 2008 and had originally planned to award it in January
The company expects construction to start end 2009 or early 2010
and completed 2012-2013, the former president director of
Pertamina, Ari Soemarno, had said.
Pertamina and Japan's Mitsui had earlier signed an agreement to
set up a joint venture to build a $1.5 billion residue fluid
catalytic cracking unit at Cilacap. The unit is to have a
capacity of 60,000 b/d. Mitsui will have an 80% stake in the JV,
while the remaining 20% will be held by Pertamina.
Meanwhile, several companies, including Japanese Toyo
Engineering Corp., JGC Corp., South Korean GS E&C and US' Flour
Corp., have passed the prequalification tender for the EPC
contract. The front-end engineering design for the project will
be handled by Toyo Engineering, a Pertamina official has said
The 348,000 b/d Cilacap refinery, which was designed to produce
mostly fuel oil to supply power plants in the country, is being
modified to produce more valuable products, such as gasoline and
Indonesia currently has seven oil refineries, all owned and
operated by Pertamina, with a total capacity of 1.05 million b/d.
Pertamina imports around 350,000 b/d of crude oil as Indonesia's
output is insufficient to meet domestic demand
Anita Nugraha,
Platts Commodity News June 25, 2009
Indonesia's Pertamina not to increase gasoline imports in July
Singapore -- Indonesia's state-owned Pertamina does not plan to
increase its gasoline imports in July, despite an upcoming
partial turnaround at its Cilacap refinery, an industry source
said late Wednesday.
Pertamina has already lined up 4.6 million barrels of gasoline
imports for July -- all of which are from its third quarter term
Of the 4.6 million barrels, 4.2 million barrels are 88 RON
gasoline and the other 400,000 barrel comprise 92 RON grade.
This is unchanged from imports in June.
Pertamina plans to shut one of its two platformers at its
348,000 b/d Cilacap refinery for two weeks in August for
scheduled maintenance.
The company however, does not have any immediate plans to seek
additional spot barrels as it deems stocks as sufficient.
The Cilacap refinery has two platformers with a capacity of
8,000 b/d and 20,000 b/d, respectively. According to a source
the 8,000 b/d platformer is the one likely to be shut in August.
Platts Commodity News June 25, 2009
Pertamina buys BP's 46% stake in Offshore Northwest Java block
Jakarta -- Indonesia's state-owned oil and gas company Pertamina
and the local unit of BP signed sales and purchase agreement on
Thursday for the Offshore Northwest Java block, Pertamina's
President Director Karen Agustiawan told Platts.
Pertamina has bought BP's entire 46% stake in the block at $280
million, and would be the operator, he added.
"The acquisition is important for us to be a world class
company," he said. "Pertamina has a strong upstream business. We
are keen to cooperate with BP, whether in Indonesia or abroad."
The two companies expect to complete the transaction by June 30.
BP and Pertamina have agreed to cooperate on developing coalbed
methane projects in Indonesia, BP's chief executive of
exploration and production, Andy Inglis, said.
Pertamina is the sole buyer of BP's stake in the Offshore
Northwest Java block though earlier it had planned to do so in
partnership with Indika Energy. Medco Energi Internasional had
also expressed an interest in buying BP's stake.
BP sold the block as it did not fit the company's long-term
strategy, BP's Indonesia country head Nico Kanter said in
February. BP wanted to focus on the Tangguh LNG project in
eastern part of Indonesia, he added.
The other stakeholders in the Offshore Northwest Java block are
China's CNOOC (36.7205%), Japan's Inpex (7.25%), Orchard Energy
(Salamander) (5%), Japan's Itochu (2.5795%) and Canada's
Talisman Energy (2.45%).
The block produced 24,000 b/d of crude oil and 270,000 Mcf/day
of gas in 2008, and is expected to produce 28,000 b/d of oil and
around 270,000 Mcf/day of gas this year. Oil output is expected
to fall to 26,000 b/d in 2010, while gas output is expected to
be 135 MMBtu/d, according to data released by upstream regulator
Pertamina's target for oil production in 2009 is 171,900 b/d
compared with 156,000 b/d in 2008. It aims to maintain its gas
output at 1.2 Bcf/d in 2009.
Anita Nugraha,
Indonesia Oil Drilling Ops Halted Over Land Dispute - Report
JAKARTA, June 25 (Dow Jones)--Citizens in the village of Kota
Baru in Indonesia's Jambi Province have blocked an oil drilling
operation by a contractor to the state oil company Pertamina due
to a land dispute, state news service Antara reported Wednesday.
Antara quoted a local man, identified only as Hidayat, as saying
that he and his family owned 2.3 hectares of land at the
Pertamina drilling site and that he had stopped the contractor's
drilling operation by cordoning off the area.
Hidayat told Antara that his family had agreed for the land to
be bulldozed in order to allow drilling but that the company had
moved other equipment onto the area without permission.
Antara reported that Hidayat had a certificate of ownership of
the land that appeared to be valid.
The news service didn't identify the Pertamina contractor, or
give further details about which of Pertamina's operations had
been halted.
A spokesman for Pertamina was unable to immediately verify the
Pertamina owns stakes in several oil and gas developments in
Jambi, including the large Jabung oil and gas block.
Indonesia's Medco Energy To Repay Us$130 Mln Debt Next Month
JAKARTA, June 23 Asia Pulse - Largest Indonesian private energy
company PT Medco Energy Internasional said it will repay it
debts totaling Rp1.3 trillion (US$130 million) next month.
The company has enough cash at US$300 million to repay the
debts, company finance director Cyril Noerhadi said.
Last month, the company repaid a bond debt of US$230 million
also with its own cash, Cyril said.
He said the company is considering to sell treasury shares to
repay more debts in 2010.
He said the company also needs a total of US$1.5 billion to
finance its projects until 2013 including the Sarulla geothermal
power project in North Sumatra and the Senoro liquefied natural
gas project in Sulawesi.
Indonesian LNG Plant To Start Production Later This Month
JAKARTA, June 25 Asia Pulse - The Indonesian government said the
Tangguh liquefied natural gas (LNG) plant will start operation
on June 28 after long delay.
The first shipment of LNG from Tangguh to its first contract
buyer, the Chinese province of Fujian, however, was yet to be
announced, Oil and Gas director general Evita Herawati Legowo
Under its contract the first shipment to Fujian was to be made
in February, but it was delayed on technical problem.
In May 24, the government shipped 153,000 cubic meters of LNG to
Fujian from the Badak LNG plant, which is bound by long term
contracts with buyers from Japan, South Korea and Taiwan.
The government could set aside LNG from Bontang for Fujian the
Bontang buyers imported LNG from other countries.
The Tangguh LNG also has other long term contract buyers
including Mexico-based Sempra Energy and K-Power and Posco
Energy from Korea.
Indonesia PLN says to raise up to $2 bln from global bonds
JAKARTA, June 24 (Reuters) - Indonesian state power firm
Perusahaan Listrik Negara (PLN) plans to raise as much as $2
billion of global bonds by the end of 2009 or early next year to
finance its power projects, its chief said on Wednesday.
PLN, long rumoured to be eyeing a global debt deal, had hired
Barclays Capital and UBS to arrange meetings with global debt
investors last month, sources said. [ID:nHKX001222]
"It (the global bond issue) won't happen in the near term. It
may be in the fourth quarter or early next year. It is something
that we need to consider in our financing structure," Fahmi
Mochtar told reporters.
When asked if PLN planned to raise between $1-$2 billion from
the bond issue, Mochtar said: "Yes, it will be around that
He said PLN was in the process of selecting underwriters and
that proceeds from the bonds would be used to finance all power
projects, including electricity-generating and transmission
The state-owned Indonesian electricity provider said in April
that it expected to report a net profit of 1 trillion rupiah
($96.71 million) in 2009 as it cuts costs.
PLN has been a perennially loss-making firm, and posted a loss
of 12.3 trillion rupiah last year. [ID:nJAK421923]
The company is under pressure to ramp up capacity and modernise
its plants. It has switched to natural gas and coal to meet
demand and cut consumption of crude oil. ($1=10340 Rupiah)
(Reporting by Fitri Wulandari, editing by Sara Webb)
Pertamina, Arrtu To Build Methanol Plants For $1.9 Bln
JAKARTA, June 25 Asia Pulse - Indonesian state oil and gas
company PT Pertamina will team up with PT Arrtu Mega Energie
(AME) to build two methanol factories at a total cost of US$1.9
billion .
Construction of the two factories in Indramayu, West Java and in
Peranap, Riau., will start in September, AME President
Christoforus Richard said.
The two factories are expected to start operation in 2012 with a
total capacity of 1.7 million tons a year, Richard said.
Pertamina will have a production share of 20 per cent or 340,000
tons, he said.
The factory to be built in Indramayu will have a capacity of
800,000 tons and the one in Peranap to have a capacity of
900,000 tons.
The factories will use sub bituminous coal as feedstock to be
supplied by state coal producer PT Tambang Batubara Bukit Asam.
Methanol could be used as an alternative to oil fuel, Richard

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