Thursday, June 18, 2009
Oil, Gas, Mining Updates from Indonesia
- Indonesia Drops Plan For Independent Appraiser To Set NNT Value
- Indonesian Govt To Audit PLN's Request For Additional Subsidy Funds
- Indonesia's PT Timah Hopes To Expand Tin Market To North America
- Indonesia's Indika Nearer To Clinching Petrosea Deal
- Indonesia Lacks Funds To Develop Alternative Energy: Official
(Courtesy Joyo News Service)
Indonesia Drops Plan For Independent Appraiser To Set NNT Value
JAKARTA, June 18 Asia Pulse - Indonesia's finance ministry has
cancelled its plan to use independent appraisers to estimate the
price of the shares of PT Newmont Nusa Tenggara (NTT).
Earlier the government was reported to have listed six
independent appraisers to be selected to audit the PT Newmont
Nusa Tenggara (NNT) to help speed up the process of divesting
part of the shares of the company .
The divestment process has been delayed over price disagreement
between the government and Newmont, which controls the copper
and gold mining company.
Newmont has been ordered by an international arbitration court
to sell part of its shares based on its contract signed in 1986.
Mineral, Coal and Geothermal Director General Bambang Setiawan
said the finance minister said the government should pursue
negotiation to reach price agreement.
If further negotiations still failed the government may rely on
independent appraiser , Bambang said.
Based on its contract, Newmonth was to sell 7 per cent of its
shares in 2008 and another 7 per cent in 2009 to the government.
NNT has offered a price of US$426 million for 7 per cent stake
to be divested in 2008 and US$348 million for this year's 7 per
cent stake divestment
NNT claimed its assets were worth US$4.9 billion but the
government said the assets were worth only US$4 billion, the
newspaper Investor Daily said.
Indonesian Govt To Audit PLN's Request For Additional Subsidy
JAKARTA, June 18 Asia Pulse - The Indonesian government will
audit state electricity company PLN`s plan to propose Rp2
trillion-Rp3 trillion (US$294 million) in additional subsidy
funds for investment in new power connections before submitting
it to the House of Representatives (DPR), an official said.
Director General for Electricity and Energy Utilization Jacobus
Purwono said here on Wednesday PLN had not yet officially
proposed the additional subsidy to the government .
"But we will carry out an audit on it first to know the PLN`s
calculations, the amount really needed and the mechanism of the
funds` allocation," Purwono said before attending a working
meeting with the House`s Working Committee on electricity.
He said the option that could be taken in order to meet PLN`s
request was to use existing unspent subsidy funds.
Previously, PLN President Director Fahmi Mochtar had proposed
additional subsidy in an effort to overcome a shortage of funds
for the installation of new power connections.
He said that PLN only had Rp1 trillion in funds for the
installations of new power connections, while the need reached
Rp3 trillion-Rp3.5 trillion so that additional subsidy was
Purwono said earlier that it was quite possible for the
government to provide PLN with extra funding this fiscal year
for the installation of new power connections.
"But the additional subsidy will be disbursed following an audit
by the Supreme Audit Board (BPK)", he said.
Purwono added that officially PLN had yet to submit the figures
on the additional subsidy, but in an informal way, PLN had
submitted a proposal for Rp2 trillion in additional funds.
PLN was recently reported to have raised the cost of the new
connections without the government`s approval which is
contradictory to the Law.
Following objections from many circles, PLN canceled the
increase, saying that in meeting applications for new power
connections, it had only received Rp1 trillion from the
government while it actually needed Rp3 trillion.
Indonesia's PT Timah Hopes To Expand Tin Market To North America
JAKARTA, June 18 Asia Pulse - Publicly-traded tin producer PT
Timah (JSX:TINS) said it is studying the possible expansion of
its tin market to North America.
The early targets were spot market buyers, depending on the
fluctuation of tin prices in the future, finance director of the
state company Krishna Syarif said.
Tin prices are hovering around US$11,000 - US$15,000 per ton at
Krishna said that currently, sales on the spot market accounted
for around 20% of the company's total sales.
Around 55% of its production was exported to the Asia Pacific
region and 35% to Europe, adding that sales on the domestic
market were only 3%.
The company hoped to sell 50,000 tons of its tin production this
year, he said.
Indonesia's Indika Nearer To Clinching Petrosea Deal
JAKARTA, June 18 Asia Pulse - PT Indika Energy (JSX:INDY),
Indonesia's third largest miner, said its shareholders had
approved its plan to acquire an 81.95 per cent stake in local
oil and gas and mining service contractor .
Indika, which has a coal producing subsidiary, already signed a
sales and purchase agreement to acquire 81.95 per cent of
Petrosea from Clough International Singapore Pte Ltd for US$83.8
The deal is expected to be closed early this month
Indika President Director Arsjad Rasjid said the shareholders
told the company management to conduct further due diligence
study of Petrosea before finalizing the transaction.
The shareholders also approved plan to launch a tender offer for
Petrosea shares held by retail investors, Arsjad said, adding
18.05 per cent of Petrosea is owned by the public.
Indonesia Lacks Funds To Develop Alternative Energy: Official
BANDUNG, W Java, June 18 Asia pulse - Indonesia is rich in
potential alternative energy sources such as solar, hydro and
geothermal but does not have enough funds to develop them to
meet its energy needs, an energy official said.
"We have enough alternative energy potentials but we are
constrained by the huge investment needed to develop them,"
Marwansyah Lobobalia, an expert adviser to the minister of
energy and mineral resources, said on the sidelines of an energy
He said so far Indonesia had only utilized about four per cent
of the three energy potentials but in 2025 it was expected that
the utilization of those energy types would reach 15 per cent.
The investment needed to build a geothermal power plant with a
4-MW capacity over five years, for example, was five times the
amount needed to build a thermal power plant.
Geothermal energy could become an alternative energy because it
was quite environment friendly and produced very little
dangerous emissions for the environment.
Marwansyah said the government was making efforts to develop
alternative energy sources so that they could be utilized.
"At present energy sources such as electricity and fuel oils are
being used inefficiently while finding alternatives is still
difficult. So, we all have to carry out efficiency in order to
save energy," he said.
He said that the government was still providing 30 per cent
subsidy for the electricity sector.