Medco Energi to Invest $1.7b in Projects by 2014

Jakarta Globe, Muklis Ali, March 30, 2010

Energy company PT Medco Energi Inter national plans to invest $1.7 billion between 2010 and 2014 in several major projects, including oil development in Libya, a company official said.

Medco Energi’s Area 47 oil project in Libya is expected to produce between 50,000 and 100,000 barrels per day and is due to start production in 2014.

“We are waiting for approval from the Libyan government for commercialization of the Area 47 block. We will fund the project with a loan of about $200 million,” Medco president director Darmoyo Doyoatmojo said late on Monday.

“Medco will also apply to the Libyan government to operate the Area 47 project.”

Darmoyo said the company was still optimistic that its liquefied natural gas project in Sulawesi would go ahead in 2014 despite issues over where the gas would be sold and whether the project would be economical.

Medco, together with state oil firm PT Pertamina and Japan’s Mitsubishi, had agreed previously to build the Donggi-Senoro LNG plant in Sulawesi, with a capacity of 2 million metric tons per year. The government wants the gas to be sold only to the domestic market, whereas the partners want to export LNG, which they say is essential if the project is to be profitable.

“This project will provide benefits not only for the companies involved but also for the government,” Darmoyo said.

Other Medco projects are the Sarulla geothermal power plant in North Sumatra, with capacity of 330 megawatts, expected to start operations in 2014, and the Block A gas field in Aceh.

Darmoyo said the Block A project would supply a fertilizer firm in Aceh and was waiting for approval by the governor.

Reuters

Indonesia - Libya to Expand Collaboration

Thursday, 26 March, 2009 | 09:16 WIB

TEMPO Interactive, Yogyakarta:The governments of Indonesia and Libya recently agreed to expand their existing collaboration. An MoU between the two countries was recently signed by Foreign Minister Hassan Wirajuda and Libyan Social Affairs Minister, Ibrahim A.M. Al Sharif, in Yogyakarta yesterday. “The value trade between Indonesia and Libya trades so far amounts to only US$400 million. This is far from the potential that can be achieved by both countries,” Hassan said.

Hassan said Indonesian companies have a US$ 1.2 billion stake in Libya’s infrastructure and construction projects. Libya is very interested in improving bilateral cooperation in the areas of trade, culture, social programs, education and youth. “Libya will be wide open to Indonesian investors,” he said.

Hassan also said that Libya is interested in buying airplanes manufactured by PT Dirgantara Indonesia in Bandung. In order to follow up on the Yogyakarta meeting, the Indonesian Trade Minister will visit Libya on April 3 for further discussions.

Meanwhile, according to Ibrahim, Libya will also pave the way for Indonesia to develop cooperation with African countries that have had good relations with Libya, given Libya’s active support in the development of member countries of the African Union, currently led by Libyan President, Col. Mohammar Khadafi. “We will open wide these opportunities,” Ibrahim said.

Ibrahim also said that the meeting opened the way for both countries to improve collaboration in all sectors. Hassan concurred, saying Indonesia had been collaborating with Libya in global affairs, such as when it was a temporary member of the United Nations’ Security Council two years ago.

Moreover, as fellow members of the Organization of Islamic Conference (OIC), Indonesia and Libya have been cooperating in seeking a peaceful solution to the decade-long conflict in South Philippines between the Philippines government and Moro rebels. “Libya is a very influential country in Africa and the Middle East, while Indonesian has the same standing in Asia, particularly Southeast Asia,” Hassan said.

The role of the two countries, according to Hassan, can also lead to wider cooperation between Asian and African countries.

MUH SYAIFULLAH

RI, Libya boosts relationship through agreements

The Jakarta Post, Jakarta | Tue, 03/24/2009 3:52 PM

Foreign Minister Hassan Wirajuda said Tuesday that Indonesia has signed three agreements with Libya, boosting the two country's relationship.

Wirajuda said that during a bilateral meeting in Yogyakarta both countries signed agreements on political consultation, social welfare and establishing a bilateral joint commission.

The minister said both countries were seeking a more intensive economic relationship.

“Our trade with Libya is worth US$400 million, while Indonesian companies have more than $1 billion worth of projects in Libya,” he said as quoted by state news agency Antara.

Wirajuda said the numbers were far from what both countries could actually come together with.

Last year, Libya and Indonesia signed a deal for the North African state to supply the country with crude oil for the next 20 years. Under the agreement, Tripoli will supply Jakarta with a minimum of 50,000 barrels per day, a figure to rise to 200,000 barrels per day from 2013.

Wirajuda said Indonesia would send its Trade Minister to visit Libya in early April.

“We are hoping to sign further trade agreements during the visit,” he said. (dre)

Pertamina to Diversify Refinery in $1.7bn Deal

The Jakarta Globe, Mita Valina Liem & Janeman Latul, March 3, 2009 

PT Pertamina on Monday signed a $1.7 billion agreement with Star Petro Energy of the United Arab Emirates and Japan’s Itochu Corp. to expand the state-owned energy producer’s product range and capacity at its oil refinery in Balikpapan, East Kalimantan Province, a senior Pertamina official said at the fifth World Islamic Economic Forum in Jakarta on Monday. 

Rukmini Hadihartini, Pertamina’s processing director, signed the memorandum of commitment for the investment plan, which is aimed at expanding refining capacity to include “bottom products” used to produce plastic bags, car parts and other substances. 

The refinery, with the capacity to process 260,000 barrels of oil per day, now produces premium gasoline, kerosene and other top-end products. It ships bottom product residue to Singapore to be processed into other petrochemical products. 

“We plan to process the residue into more valuable products such as petrochemicals,” said Anang Riskani Noor, Pertamina’s vice president of communications. “We have always exported our bottom products because we don’t have the ability to process them here.” 

Anang said the company was still discussing the kinds of goods to be produced. 

He added that the agreement followed a preliminary deal signed in September with Itochu and Star Petro Energy. 

“In this challenging economic environment it makes sense to be as efficient as possible with our investments,” Karen Agustiawan, Pertamina’s president director, said in a statement. 

“We believe cooperation is the solution. We want to build on our positive partnership experiences in Muslim and non-Muslim countries.” 

Star Petro Energy is a diversified company based in the United Arab Emirates with operations in the airline, mining and insurance sectors. 

Itochu imports and exports goods such as textiles, machinery and oil and gas products. 

Sheikh Saud Bin Saqr Al Qasimi, the crown prince and deputy ruler of the Ras Al-Khaimah Emirate, said Star Petro Energy was investing in a state-owned project rather than a private one because it felt that government-backed projects were safer in the current economic climate. 

It chose Indonesia, he said, because of the country’s wealth of natural resources. 

Pertamina has exploration rights to drill for oil and gas in Malaysia, Libya, Qatar and Sudan. 

The company expects to meet domestic fuel demand by improving the efficiency of its refineries, ports and transportation and distribution networks, it said.

Pertamina moves to acquire Verenex's Libya oil field

Alfian, The Jakarta Post, Jakarta | Sat, 11/29/2008 11:32 AM  

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 barrels of 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.

Pertamina set to sign $2b deal with Iran

Ika Krismantari , The Jakarta Post , Jakarta | Thu, 03/06/2008 1:21 AM

State oil and gas company PT Pertamina will sign an agreement with an Iranian firm to build an oil refinery in Banten with a capacity of 200,000 barrels of oil per day.

If the joint venture materializes, the US$2 billion facility will be the second-largest oil refinery in the country.

President director Ari Soemarno said Wednesday a team from the company's processing and refinery division was on its way to Tehran to meet with representatives of Iran's state oil company, National Iran Oil Company.

Ari was speaking to reporters after the inauguration of the company's new directors.

The team will discuss a number of points before the signing, including the security of the crude oil supply.

The two companies had long planned the project but negotiations stalled over a disagreement on the refinery's oil supply.

Having initially promised to be able to supply up to 300,000 barrels of oil, the Middle East country said later it would only be able to supply 150,000 barrels, putting the project in jeopardy.

However, recently Pertamina struck a deal with Libya for another supply of 50,000 barrels of oil, reviving negotiations.

"We think a refinery with a 150,000-barrel capacity is not economically feasible. But it definitely is with 200,000 barrels now that Libya can help," Ari said.

Also on Wednesday, Pertamina replaced three of its directors.

Two of the three are women, Karen Agustiawan and Rukmi Hadi Hartini, replacing Sukusen Soemarinda and Suroso Atmomartoyo for directors of upstream and processing, respectively.

Waluyo, a former member of the Corruption Eradication Commission (KPK), became the director for general affairs and human resources, replacing Sumarsono.

State Minister for State Enterprises Sofyan A. Djalil said the next target for a shake-up in state firms would be power company PT PLN as the tenure of a number of directors, including president director Eddie Widiono and finance director Parno Isworo, are nearing their ends.

Libya to supply Banten refinery

Ika Krismantari, The Jakarta Post, Jakarta

State oil and gas company PT Pertamina has secured the remaining 150,000 barrels of oil (per day) supply it needs to feed its refinery plant, currently under construction in Banten, from a Libyan company, an official says.

The project is expected to have a fuel processing capacity of 300,000 bpd, making it the country's second largest refinery after the refinery in Cilacap, West Java.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said Wednesday that during his visit to Libya last week, Libya's National Oil Corp (NOC) had agreed to provide the crude supply for the Banten refinery.

The deal was part of broader agreements also signed by the two companies last week, under which NOC will supply Pertamina with a minimum of 50,000 bpd, from the moment the refinery comes on stream, and will increase the supply to 200,000 bpd by 2013.

The agreement will last for 20 years.

Pertamina has been looking for a supplier for its Banten refinery since last year, as it has only succeeded in securing 150,000 barrels per day from Iran, with whom it is also constructing the US$550 million refinery project in Bojonegara, Banten.

Iran, which previously agreed to supply all the crude needs, recently decided to cut its supply commitment to the refinery to only 150,000 bpd.

Meanwhile, Pertamina president director Ari Sumarno said the company was also seeking opportunities for a partnership with a Libyan counterpart in building a new refinery project.

Currently, Indonesia has 10 operating refineries with a total capacity of 1.190 million barrels of oil per day.

Pertamina, Petroecuador ink exploration agreement

Ika Krismantari, The Jakarta Post, Jakarta

State oil and gas company PT Pertamina will team up with Ecuador's national oil firm, Petroecuador, for the preliminary exploration of three blocks in the Latin American country.

Witnessed by Indonesian President Susilo Bambang Yudhoyono and Ecuador's President Rafael Correra Delgado, the two state firms on Monday signed a memorandum of understanding on the cooperation at the State Palace in Jakarta.

Later in the day, on the sidelines of a luncheon with Ecuador's president, Pertamina president director Ari H. Soemarno said his company was exploring the possibility of expanding its overseas operation to Ecuador and was set to spend US$50 million during the first year of operation to gather technical data on the three blocks' reserves.

The names of the three blocks, according to Ari, are Guanta, Dureno and offshore Lago Agrio.

Petroecuador executive president Carlos Pareja Yannuzzelli said the partnership with Pertamina was forged to realize the government of Ecuador's goal to increase its oil production.

Ecuador, which was just granted membership to the Organization of Petroleum Exporting Countries during a recent summit in Riyadh, Saudi Arabia, has produced about 500,000 barrels of oil per day this year.

"We will give Pertamina 90 days to gather all the technical data, and after that we hope Pertamina can submit their offer for the actual exploration development plan," Yannuzzelli said.

He said the form of the partnership and the share composition between the two companies in each block would be decided later, pending the results of the preliminary exploration.

Refusing to give exact figures, he estimated the investment for the projects would involve "hundreds of millions of U.S. dollars".

Monday's agreement bodes well to Pertamina's intention to pursue overseas expansion, to help improve its output and global standing.

It just won an oil block in Qatar, in which it holds a 25 percent interest, with partner Wintershall -- the world's largest German-based oil and gas drilling company.

Pertamina is also the operator of two oil blocks in Libya, onshore and offshore, and the holder of a 15 percent share in an offshore oil field in Sudan operated by China National Petroleum Corporation and a local partner.

Commenting on the company's recent bid for an oil block in Iran, Ari said the company had been outbid by other companies.

"However, the Iranian government is still considering having us as its partner on other projects. We are still discussing it," he said.

Banks Asked to Build Middle East Network

Thursday, 19 April, 2007 | 15:18 WIB

TEMPO Interactive, Jakarta: State Minister of State-Owned Enterprises (SOEs) Sugiharto has asked the national banking sector to form a network with banks in the Middle East.

The reason for this is that many infrastructure projects can be established there by SOEs.

In addition to building a network, Sugiharto has requested banks to set up consortia.

According to him, the potential for the construction market in the Middle East is huge.

Countries such as Qatar, Abu Dhabi, Dubai, Libya, and Saudi Arabia still need foreign contractors to work on infrastructure projects in their countries.

However, financing is still not running well.

Managing Director of Bank Mandiri Agus Martowardojo has estimated that there are obstacles in Bank Indonesia's regulations, especially those associated with bank guarantees for projects.

Other countries do not recognize bank guarantees, which refer to Indonesia's Code of Commercial Law.

AGUS SUPRIYANTO