Cars for high officials to switch from gasoline to gas

Bagus BT Saragih, The Jakarta Post, Jakarta, Mon, 01/16/2012

The government plans to equip all official cars used by President Susilo Bambang Yudhoyono’s Cabinet members and other high-level state officials with gas converter kits as part of the oil-to-gas conversion program.

“We have appointed [state-owned aircraft maker] PT Dirgantara Indonesia to produce the kits. But if the company fails to provide all the demanded kits, we will import more kits to fill the gap,” Coordinating People’s Welfare Minister Agung Laksono told reporters at the presidential office on Monday.

Agung added that the government expected to reach its goal by April.

The oil-to-gas conversion campaign was launched to support government plans to limit the amount of subsidized fuel used by private cars in Java and Bali, which will be gradually carried out from April.

The government hopes the program will allow it to reduce the fuel subsidy.(dic)

Related Article:

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Shell plans to enter upstream market in Indonesia

Hans David Tampubolon, The Jakarta Post, Kuala Lumpur, Sat, 07/09/2011

Royal Dutch Shell Chief Executive Officer (CEO) Peter Voser says that his company plans to enter the upstream market in Indonesia within the next few years while further developing its downstream business.

“For Shell, Indonesia plays an important role in Asia, in line with population growth, market development and significant demand,” Royal Dutch Shell CEO Peter Voser said during a discussion with journalists at the Sepang International Circuit in Kuala Lumpur, Malaysia, on Friday.

Speaking about the future of energy, Voser said Shell had three pillars for the future, namely more energy, cleaner energy and smarter energy. For more energy, Shell is developing new sources of oil and gas that the world will need.

“Renewable energy sources will supply up to 30 percent of global energy by 2050, while now it is only 13 percent. Shell invested over US$100 billion from 2011 to 2014 to develop new energy. In 2010 we invested more than $1 billion for research and technology development,” Voser said.

Shell to open lubricant plant in Indonesia

Rangga D. Fadillah, The Jakarta Post, Jakarta | Sat, 02/12/2011

Anglo-Dutch Royal Dutch Shell announced Friday that the company would set up a US$100 million lubricant plant in the western part of Java with a total capacity of 100,000 tons per year.

PT Shell Indonesia president director Darwin Silalahi said the plant would be the company’s production hub, not only to supply the Indonesian domestic market, but also the Asian regional market.

“We’ve been discussing with the Industry Minister [M.S. Hidayat] about what incentives Shell can

get to make the plant competitive for the export market,” he told reporters after meeting the minister in Jakarta.

Darwin said that in addition to fulfilling domestic demand, lubricants from the planned plant would be exported to emerging Asian economies such as China, India and Vietnam, whose demand has been rising over the past several years.

The plant would start operations in late 2013 or early 2014, Darwin said. He estimated that the plant’s construction process would absorb around 700 workers, while its operation would open around 250 new job opportunities.

Industry Ministry director general of upstream chemical industry Tony Tanduk reported that Shell was eying opportunities to profit from the rapid growth of Indonesia’s automotive industry.

“That remarkable growth has caused the demand for lubricants to rise significantly,” he said.

Indonesia’s automobile sales reached 764,710 units in 2010, while motorcycle sales exceeded 7 million. The Indonesian Automotive Industry Association (Gaikindo) projects car sales may top 850,000 this year.

Tony said that the government was now considering several incentive options for Shell. Besides tax allowances, he said the company requested the government lift import duties for raw materials.

Hidayat explained that in the near future the Investment Coordinating (BKPM) would submit a

revision draft on the 2008 government regulation on income tax incentives for investors to accommodate Shell’s requests.

The 2008 government regulation on income tax incentives for investors stipulated that only investors intending to build oil and gas refineries are eligible for an income tax reduction of 5 percent of their total yearly investment for the first six years of the project.

“We want that by the revision, companies committed to building downstream oil and gas businesses will also get that incentive,” Hidayat said.

He revealed that the company was currently conducting studies on suitable locations for the planned lubricant plant. There were two potential candidates; Marunda in North Jakarta and Cilegon in Banten province, he added.

Investments from Shell would provide positive momentum for Indonesia to boost its efforts in developing the downstream industry, Hidayat said. He continued that this year he would focus on luring more investment to the sector.

Darwin said that the $100 million lubricant plant would be the first phase of the company’s investment in downstream businesses.

“If the progress is good, we’ll have no doubt to expand the plant capacities in the future,” he said.

However, he was still waiting for the government’s decision on what incentives the company would receive, because other countries had also offered interesting incentives that might boost the company’s products’ competitiveness.

Pertamina takeover plan confirmed

Nani Afrida, The Jakarta Post, Jakarta | Fri, 10/08/2010 10:00 AM

The government confirmed Thursday that Pertamina planned to acquire a majority stake in PT Medco Energi Internasional although the state oil and gas company has not issued an official statement on the plan.

State-Owned Enterprises Minister Mustafa Abubakar said that the state oil and gas company would take over the stake currently held by PT Encore Energy — a company owned by prominent Indonesian conglomerate Arifin Panigoro — through Pertamina subsidiary PT Pertamina Hulu Energy (PHE).

“The acquisition is now under negotiation,” he told reporters .

The minister said that the acquisition was part of PHE’s expansion program to further strengthen its oil and gas exploration and production operations.

Although Pertamina has not yet publicly announced the acquisition, Mustafa said that the state oil and gas company had reported the plan to his office and he expected negotiations would be completed before the end of the year.

Medco Energi was the first Indonesian company to operate in the oil and gas sector and has been listed on Jakarta Stock Exchange since 1994.

It has transformed itself from locally-focused company to an energy company operating throughout Indonesia and overseas, as well, with focus on oil and gas, power generation and renewable fuels.

According to the company’s 2009 financial report, Arifin’s Encore, which owns a 42.41 percent stake, is the single majority shareholder.

The public holds a 40.8 percent stake and is the second largest shareholder.

According to Bisnis Indonesia daily, Pertamina would acquire 46.41 percent stake in Medco.

Over the last three months, the firms have negotiated several cooperation agreements governing joint operations and mergers and acquisitions.

The takeover might cost Pertamina Rp 6.5 trillion (US$728 million), according to estimates.

On the acquisition, Medco Energi Internasional project director Lukman Mahfoedz declined to comment, saying that the company had not determined yet how great stake would be acquired by PHE.

“The decision will be in the hands of our company’s shareholders. I can’t comment,” he said as quoted by Bisnis Indonesia.

Pertamina corporate communications vice president Mochammad Harun said that the companies had not yet reached any agreement on the acquisition, nor on the percentage of shares to be acquired.

“When we have finished or closed the deal, we will inform the public,” he said as quoted by Republika online news portal.

Mochammad said that there were still processes that had to be completed before the company could acquire the stake officially.

He added that the company was conducting currently a study to determine which of Medco’s physical facilities could be synergized with Pertamina.

“We don’t have any deadline, because if we’re too hurried, the process can’t be optimized,” he said.

Earlier reports said that PHE postponed its initial public offering (IPO) plan this year due to the acquisition.

Medco Energi booked total revenues of $397.09 million in the first half of 2010, up 27.67 percent from $311.03 million in the same period last year.

Net profits rose 26.2 percent to $12.1 million in the first half, up from $9.6 million in the same period last year.

Revenues from oil and gas sales contributed $258.55 million to the total revenue from January to June while contracts and services provided $56.79 million, electricity and related businesses such as petroleum products contributed $30.24 million and $51.51 million, respectively. (rdf)

Taxi company leaves Pertamina, shifts to Shell

The Jakarta Post, Jakarta | Wed, 07/28/2010 9:32 AM

Taxi company PT Gamya Taksi Group is negotiating a cooperation agreement with PT Shell Indonesia after 270 units or one fourth of its fleet could not operate due to broken fuel pumps.

Gamya President Director Mintarsih A Latief said replacing the taxis’ fuel tanks would not solve the problem if the cause of the damage was still around gasstations selling subsidized fuel produced by state oil and gas company PT Pertamina.

“There is no guarantee that the same problem will not recur if we change the fueltanks,” she told Kontan business daily on Tuesday.

Preliminary investigation found that the Pertamina fuel bought from gas stations in Kreo,Pondok Bambu and on Jl. TB Simatupang contained sulfur. Gamya claims to have lost up to Rp 162 million in revenue per day due to the damage.

As of Tuesday 50 taxis could not operate due to limited stock of fuel pump components.

Mintarsih said the use of high-octane fuel from Shell would force her company to increase service fee. “If we cannot find another way, we will have to increase thetariff,” she added.

The multinational oil company only sells non-subsidized fuels.

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Shell opens largest petrochem plant

Vincent Lingga, The Jakarta Post, Singapore | Wed, 05/05/2010 11:06 AM

Royal Dutch Shell opened its largest-ever multi-billion dollar petrochemical complex on Bukom and Jurong islands Tuesday in a stronger bid to strengthen its leading position in the expanding Asian market.

The multi-billion dollar Shell Eastern Petrochemicals Complex (SEPC) consists of an ethylene cracker and butadiene extraction unit on Bukom island, and a mono-ethylene glycol (MEG) plant and a butadiene plant on neighboring Jurong island.

The complex is capable of manufacturing 800,000 tons of ethylene, 750,000 tons of MEG, 155,000 tons of butadiene, 450,000 tons of propylene and 230,000 tons of benzene a year.

MEG is a raw material for polyester fibers for clothing and furnishing, safety equipment, film, anti-freeze coolants and many other consumer products.

“The demand for petrochemicals, the basic building blocks for manufacturing many consumer goods, in Asia is soaring,” noted Shell chief executive officer Peter Voser at the inauguration ceremony which was also attended by Singapore Prime Minister Lee Hsien Loong.

Shell enjoyed a 60 percent increase in underlying post-tax profits to US$4.9 billion in the first quarter of this year.

SEPC, Shell’s largest fully-integrated refinery and petrochemicals hub, is the second major petrochemical complex completed by Shell in the past five years after the CNOOC-Shell petrochemical joint venture in Guangdong, China.

Shell’s investments in Singapore and China reinforce the Shell strategy to build chemicals production to meet the needs of Asia and Pacific countries which account for around 70 percent of global MEG consumption, SEPC Deputy Venture Director Pieter Eijsberg said.

Voser described SEPC as a model example of Shell’s strategy to integrate its refining and petrochemicals assets to maximize economies of scale and efficiency benefits in terms of feedstocks, operations and logistics.

He reaffirmed the strategy of the giant oil company to derive more than one half of its upstream production from natural gas by 2012 because natural gas plants produce only half as much CO2 compared to coal-fired power plants.

Shell’s largest and flagship gas projects under construction are two LNG plant projects worth $21 billion in Qatar, one of which will come on stream next year.

“Asia is both gas rich and gas-hungry, and Southeast Asia is an important exporter of LNG to the rest of the world with Malaysia and Indonesia being the world’s second and third LNG suppliers after Qatar,” Voser said.

In late March, Shell joined with PetroChina Co. in a $3.2 billion acquisition of Arrow Energy Ltd., a deal which will give them access to Arrow Energy’s huge holdings of coal-seam gas reserves, or coal-bed methane, in Australia.

As much as 40 percent of Shell’s capital spending in the next few years has been earmarked for the Asia Pacific region and this programs seems to fit perfectly well within Shell’s strategy to become a gas company that increasingly focuses on Southeast Asia.

Pertamina on the move for $15b project

Mustaqim Adamrah, The Jakarta Post, Jakarta | Sat, 04/03/2010 9:45 AM

State oil and gas firm PT Pertamina will team up with several local and foreign petrochemical firms to build the first of three oil refineries in a massive project worth an estimated US$15 billion, an official says.

The Industry Ministry’s director for upstream chemical industries, Alexander Barus, said Indonesia would reduce its dependence on foreign refineries to produce naphtha, which is crucial as feedstock for producing high octane gasoline.

With this aim in mind, Pertamina has been instructed to team up with other companies to construct three refineries within 10 years, each estimated to cost up to $5 billion, with a total combined capacity of 900,000 barrels of naphtha per day.

The most immediate project of Pertamina and partners, Alexander said, would commence this year with the erection of a refinery in Cilegon, Banten. The other two new refineries, each with a production capacity of 300,000 barrels per day, would be built in East Kalimantan’s Bontang and East Java’s Tuban, he said.

Partners for the Cilegon refinery would include from PT Chandra Asri, the Malaysian-owned PT Titan Petrochemical, PT Trans Pacific Petrochemical Industry, PT Tri Polyta and PT Polytama Propindo.

“Right now, Chandra Asri is the [partner] that is most ready,” Alexander said.

Besides that plan, Chandra Asri — the largest domestic ethylene producer — is reportedly has a long-term plan to spend a total of $2 billion on an expansion of its oil refinery unit, including $1 billion on a naphtha cracking unit.

Meanwhile, Indonesian Olefin and Plastic Industries Association (INAplas) chairman Amir Sambodo earlier said polypropylene producer Polytama also planned to expand its production from 280,000 tons in total installed capacity to 440,000 tons, with a total investment of $20 million, by integrating its existing production facilities.

A lack of supply of naphtha, which is refined from crude oil, has made petrochemical firms unable to serve surging demand, particularly for polyethylene and polypropylene, in the domestic market.

Polyethylene and polypropylene are raw materials used to produce plastic goods such as packaging materials, electronic components, pipes, rope and tableware.

According to the INAplas, domestic supplies of polypropylene account for between 400,000 and 450,000 tons annually, while domestic demand may reach between 700,000 and 800,000 tons annually.

Shortages in polyethylene and polypropylene supplies have prompted downstream plastic manufacturers to import from other Southeast Asian countries and the Middle East, among others.

Facing pressure from the domestic upstream plastic industry, the government increased import duties on imported polyethylene and polypropylene from 10 percent to 15 percent as of Feb. 13, 2009. .

Upstream plastic manufacturers argued that they were facing collapse because downstream plastic manufacturers preferred to import.

Indonesia back on the map of Shell’s investment portfolio

Vincent Lingga, The Jakarta Post, London | Thu, 03/18/2010 10:40 AM

Royal Dutch Shell’s Chief Executive 0fficer Peter Voser said Indonesia is now a target for his company’s investment portfolio in both the upstream and downstream hydrocarbon sectors.

“We have been in talks with state oil company Pertamina and the government, offering them our technology and experiences to develop energy projects such as floating LNG plant,” Voser told The Jakarta Post on Tuesday in London.

He acknowledged though that the US$292-billion Anglo-Dutch giant had been absent from Indonesia quite sometime despite its long history since its founding (in North Sumatra) more than 100 years ago.

The origins of the oil industry in Indonesia and of what has now become the world’s largest oil company are closely connected because it was the discovery of commercial quantities of crude oil in Pangkalan Brandan in 1890 that led directly to the formation of what is now known as the Royal Dutch Shell Group.

“But we have come back and we are the first oil major to enter the downstream market with our strong retail brand,” Voser added, citing the opening of several Shell gasoline stations in Greater Jakarta area over the past two years.

He said Asia is a key for the future growth of its downstream market, and Indonesia, as the country with the third largest population in Asia, will play an important role in its investment portfolio.

Therefore, while the oil giant plans to sell up to 9,000 gasoline stations in mature markets in a continued cost-cutting program, it will further expand its retail network in Indonesia, Voser asserted.

Earlier on Tuesday morning in his Shell strategy review to journalists from around the world, Voser said Shell’s oil and gas production is expected to increase by 11 percent from 3.15 million barrels of oil equivalent a day (boe) last year to 3.5 million boe in 2012.

“And as a result investment growth, Shell made proven additions to reserves of 3.4 billion boe last year,” he said, pointing out that the company also had some 11 billion boe of new oil and gas resources under exploration and development.

Charting out its future growth, Voser estimated Shell’s net global capital investment to be in the range of $25-27 billion a year between 2011 and 2014 with up to $3 billion per year of asset sales and $25-30 billion per year in investment.

In North America, he said, Shell added 8 trillion cubic feet equivalent (tcfe) of gas resources last year, bringing its global total to 21 tcfe or about 3.7 billion boe.

“But Australia should underpin Shell’s next tranche of LNG development, within a world wide operation set for a possible further 10 million tons per year of capacity by 2020 which could take Shell’s total global capacity to around 35 million tons per year,” Voser said.

Gas will be at the heart of Shell’s production strategy ahead of oil as the world attempts to reduce carbon dioxide emissions because clearly it is the fossil fuel that has the lowest carbon dioxide content.

Shell plans that more than 50 percent of its energy products will be gas based by 2012.

Voser added Shell continued with plans to build new upstream and downstream capacity, while managing the near-term challenges of the weak global economy.

He saw international oil prices stabilizing at between $60 and $80 per barrel over two years. At the lower price Shell’s cash flows from operations would increase by about 50 percent and with the higher price cash flows would rise by 80 percent, up from $24 billion last year.

Voser provided an overview of the downstream landscape characterized by narrowing spreads, increasing inventory levels, and a widening gap between refining capacity and demand, placing significant pressure on refining margins.

Shell always recognized the cyclical nature of the refining and chemicals businesses, so the current downturn is not unexpected, but is more severe than supply-demand analysis implied before the 2008 credit crisis.

Shell, he said, is active in downstream marketing (retail) in more than 100 countries but this portfolio is too scattered and not focused enough on profitability and growth “Therefore, Shell has plans to exit from 15 percent of its world-wide refining capacity, 35 percent of its current retail market, and is taking steps to further improve its chemicals assets,” Voser added.

Pertamina to Build Gas Station for Fishermen

Tempo Interactive, Wednesday, 17 February, 2010 | 15:50 WIB

TEMPO Interactive, Jakarta:This year, state-run oil company Pertamina will build 400 Solar Packed for Fishermen (SPDN) or gas stations in regencies and fish production centers. The policy was to address the low number of SPDNs, especially in remote islands.

“Next week we will have a meeting with the relevant offices for an overall decision. Pertamina will be in charge of the implementation,” said Maritime and Fishery Minister Fadel Muhammad, following a meeting with Pertamina directors in Jakarta, yesterday.

Fadel said the construction will be based on a new concept, namely the minapolitan concept, which applies to a large fish producing area needing a larger fuel supply. “The large fish producing area is called minapolitan,” Fadel said.

That is why there is no standard on how much allocation fuel would be supplied to one SPDN because there is a different quota for each SPDN. Fadel said fishermen are asked to unload their catches at a specified area.

The amount of their catch will determine the fuel quota. “In this way, people can longer need to buy and sell in the sea,” he said. “So far, when they go home with empty catch, the fuel is empty, too. There is something wrong with this.”

RATNANING ASIH

Joint venture to produce biofuel in Brazil

Radio Netherlands Worldwide, 1 February 2010 - 3:33pm

Sugarcane field

(first generation biofuel)

Shell plans to enter into a joint venture with the Brazilian ethanol producer Cosan. The two companies have signed a declaration of intent for the production, distribution and sale of ethanol in Brazil.

Brazil makes widespread use of ethanol made from sugarcane as a biofuel. This will be the first time that Shell has been involved in the production of biofuel. The energy company believes that biofuels are the most realistic replacement for petrol in the transport sector in the next 20 years. Shell aims to invest 1.6 billion dollars in the joint venture in the next two years. The enterprise is intended to become market leader in Brazil, with 4500 points of sale and an annual production of 17 billion litres.

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Pertamina to expand business operations in Australia, Malaysia

Antara News, Tuesday, January 12, 2010 13:52 WIB

Jakarta (ANTARA News) - State oil company PT Pertamina is planning to expand its business operations abroad by building gas stations in Australia and Malaysia at a cost of Rp60 billion this year, a spokesman said.

"We hope , we can build two gas stations in Australia before the middle of this year," the company`s commercial and marketing director, Hanung Budaya, said at the company`s head-office here on Tuesday.

Hanung said Pertamina would set up gas stations in Australia after it had been running lubrication oil outlets in the country down-under.

"The opening of gas stations abroad will cost Rp60 billion and the expenditure has already been included in the company`s Work Plan and Budget for 2010 , and if the budget is sufficient for two gas stations, we will build two units abroad," Hanung said.

He said the company would acquire existing gas stations in Australia and Malaysia and run them under Pertamina`s trade mark.

"If we can do it in Malaysia this year we will try but if not, we will do it next year," Hanung said.

According to Hanung, Pertamina would cooperate with Petronas to acquire land in Malaysia while the fuel oil to be sold there would be supplied from Malaysia.

"Based on consideration of geographic proximity and business efficiency, Pertamina will probably build the gas station in the Malaysian state of Sarawak," Hanung said.

India to Build 10 LPG Canister Factories

Tempo Interactive, Monday, 11 January, 2010 | 14:29 WIB

TEMPO Interactive, Bangalore:The biggest liquid petroleum gas (LPG) producer in India, Confidence Petroleum India Ltd, will build 10 factories in Indonesia this year with a total investment of US$ 16,5 million. The company had previously built an LPG canister production facility in Indonesia in June last year.

The Mumbai-based company’s plan was in line with the Indonesian government’s program to convert the use of kerosene to a three-kilogram LPG canister. The Indonesian government has so far distributed around 70 million of three-kilogram LPG canisters to low-income families for free.

“There is a really high demand in LPG canisters in Indonesia," Confidence Petroleum’s boss, Niti Khara, told The Financial Express in Bangalore last weekend. “Now, we will build 10 more facilities along with the growing demand for gas refills from Pertamina”.

SORTA TOBING

Pertamina Loses Monopoly on Domestic Subsidized Oil Products

The Jakarta Globe

An Indonesian worker rides a bike past barrels of oil at a Pertamina depot. (Photo: Bagus Indahono, EPA)

Indonesia’s state oil firm Pertamina has lost its exclusive right to distribute subsidized oil products in 2010 after a unit of Malaysia’s Petronas and a local firm won supply tenders, a regulator said on Monday.

Petronas has won the right to distribute 20,440 kiloliters (128,547 barrels) of subsidized low-octane gasoline in the city of Medan, North Sumatra, next year, the head of Indonesia’s downstream oil regulator, BPH-MIGAS, said.

Indonesia’s PT Aneka Kimia Raya (AKR) Corporindo would also distribute 56,500 kiloliters (335,328 barrels) of subsidized diesel oil in Lampung province, in South Sumatra and in the cities of Banjarmasin and Pontianak in Kalimantan.

“By law, Petronas and PT AKR Corporindo are allowed to supply subsidized fuel. After we evaluated their capabilities in providing fuel, we selected them,” Tubagus Haryono, head of BPH-MIGAS, told reporters.

The remaining subsidized fuel would be supplied by Pertamina in 2010.

Overall, the government planned to supply of 21.4 million kiloliters (134.5 million barrels) of subsidised gasoline and 11.2 million kiloliter of subsidized diesel oil in 2010, Haryono said.

This year, Indonesia expects 19.44 million kiloliters of subsidized low-octane gasoline and 11.6 million kiloliter of diesel to be supplied.

BPH-MIGAS decides each year on the rights to supply and distribute subsidised oil products such as low-octane gasoline, kerosene and diesel.

Royal Dutch Shell Plc had also joined the tender to distribute fuel this year.

“The volume of subsidized gasoline and diesel is expected to be higher than the government’s 2009 plan, due to higher transportation consumption,” Haryono said without elaborating.

Separately, the director general of oil and gas at the energy ministry, Evita Legowo, said the government wanted the supply of subsidized fuel to be cut in the future.

The level of consumption of fuel is critical because it helps determine the scale of subsidies the government has to set aside in the budget.

Pertamina’s monopoly over all sectors of the oil market was ended in 2001, and three years later Indonesia opened up its domestic downstream oil business to foreign firms, paving the way for them to directly import fuel and sell to local customers.

But Pertamina had up until now retained the exclusive rights to supply subsidized oil products — which includes almost all products except for premium motor fuel — in the domestic market.

Reuters

PGN to invest $1b in LNG receiving terminals

Nani Afrida , The Jakarta Post, Jakarta | Wed, 11/25/2009 9:30 PM

State gas producer PT Perusahaan Gas Negara plans to allocate US$ 1 billion to build Liquefied Natural Gas (LNG) receiving terminals in West Java and North Sumatra, an official revealed Wednesday.

“The investment in the terminals is about $100 million up to $150 million per unit,” [with some multiple units] PGN president director Hendi P Santoso told reporters during a hearing between PGN and the House of Representatives.

The company acknowledged that it was still seeking some loans from banks to finance the terminals.

“We probably will find 30 percent of the budget needed from the internal cash flow, with the rest from bank loans,” PGN finance director Riza Pahlevi Thabrani said.

It was reported that the company targeted to deliver a maximum of 400 million cubic feet per day in additional gas supply from the West Java LNG terminal, and up to 150 million cubic feet per day from the North Sumatra one.

For the West Java project, the company had established a partnership with state oil and gas producer PT Pertamina, and state power utility PT PLN.

Meanwhile, for the North Sumatra project, PGN would be fully in charge of the construction and operation of the project.

The company expected the projects to start operations in 2012.

Pertamina to prepare for IPO

Antara News, Tuesday, November 24, 2009 14:36 WIB

PT Pertamina. (ANTARA/Ardika)Jakarta (ANTARA News/Asia Pulse) - Indonesian state-run oil and gas company PT Pertamina said it may list some of its units on the Indonesian Stock Exchange next year ahead of plans to launch its own initial public offering (IPO).

Pertamina may sell shares in insurance unit PT Tugu Pratama Indonesia, drilling unit PT Pertamina Drilling Services, geothermal unit PT Pertamina Geothermal Energy and energy exploration unit PT Pertamina Hulu Energi, chief financial officer Frederick Siahaan said.

Siahaan said the company would try to list subsidiaries first to increase transparency, adding that Pertamina would retain majority stakes.

Shell to review subsidized fuel distribution offer

Alfian, The Jakarta Post, Jakarta | Mon, 11/02/2009 1:47 PM

PT Shell Indonesia, the local subsidiary of global energy company Royal Dutch Shell, is reviewing a mandate offered by government to distribute subsidized fuels outside its existing distribution network in 2010.

Downstream oil and gas regulator BPHMigas has already chosen Shell to distribute up to 5,110 kilo liters a year, or 14 kilo liters a day of Premium gasoline in Medan, North Sumatra in 2010.

"Our proposal is to distribute the subsidized fuels in areas that include Java and Bali, but BPHMigas has opened up an opportunity outside Java.

"Of course, this will impact on our business plan. Therefore, we are now reviewing this," Shell Indonesia's president director Darwin Silalahi told reporters last Friday.

Darwin said Shell would be in talks with BPHMigas about this and would expect to complete the discussion soon.

Shell currently operates 41 fuel stations and all of them are located in Java.

The appointment may require the company to open new fuel stations in Medan.

"*To be* given a chance outside Java is a good sign for us, but we also want to open up access for customers in all areas," he added.

State oil and gas company PT Pertamina has so far been the sole distributor of the subsidized fuels.

But, for 2010, BPHMigas has appointed three private companies to join Pertamina in distributing the subsidized fuels.

The three companies are: Shell, PT Aneka Kimia Raya Corporindo (AKR), and PT Petronas Niaga Indonesia.

But, the three companies are only allowed to distribute the fuels in limited volume and limited areas, all of which are outside Java and Bali.

AKR has been chosen to distribute up to 109,162 kilo liters a year of diesel, or 299 kilo liters a day, in Medan, Deli Serdang, Binjai, Metro, Central Lampung, East Lampung, South Lampung, North Lampung, Bandar Lampung, Pontianak, and Banjarmasin.

Petronas meanwhile has been chosen to distribute up to 20,440 kilo liters per day of Premium, or 56 kilo liters a day, in Medan.

BPHMigas's chairman Tubagus Haryono said that the three companies were appointed outside Java to help the country to build up subsidized fuels distribution infrastructures in more distant areas.

"We want that the infrastructure not only be concentrated in Java, but also in more distant areas," he said in a text message.

Tubagus added that AKR and Petronas had sent letters saying that they would accept the appointment. BPHMigas is waiting for the same letter from Shell.

"If the letter is not sent, the company will be removed *from the list of distributors*," Tubagus said.

The government subsidizes Premium gasoline, diesel and kerosene.

Under the 2010 state budget bill, the government estimates that subsidized fuel consumption next year will reach 21,454,104 kiloliters for Premium gasoline; 11,250,675 kiloliters for diesel and 3,800,000 kiloliters for kerosene.

For the budget year 2010, Rp 69 trillion ($7.34 billion) has been allocated to fuel subsidies, up from Rp 54.3 trillion this year.

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Total Operating its First Fuel Stations in Indonesia

Tuesday, 24 March, 2009 | 12:37 WIB

TEMPO Interactive, Jakarta: PT Total Oil Indonesia is now officially operating its first two fuel stations at Jalan Daan Mogot and Jalan MT Haryono in Jakarta.

The oil company from France plans to build 500 fuel stations in the Asia-Pacific region.

Senior Vice President of Total Refining and Marketing for Asia-Pacific, Thierry Pfimlin, said that Total has now entered the retail market following its success with the company’s lubricant oil in Indonesia.

“It is a strategic and significant market consideration to enter the fuel retail market,” he said yesterday (23/3).

Total is selling its Performance 95 petrol at Rp6,500 while Performance 92 is Rp5,900; and Performance Diesel is Rp6,900.

Managing Director and CEO of PT Total Oil Indonesia, Piotr Janiw, said that Total offers fuels with high performance and best services to consumers.

Total has 16,000 fuel stations throughout the world, with most of them located in Europe.

RIEKA RAHADIANA

Pertamina Launches World’s Biggest LPG Station

Friday, 20 March, 2009 | 12:40 WIB

TEMPO Interactive, Jakarta: The state-owned oil company PT Pertamina (Persero) launched the world’s biggest liquefied petroleum gas (LPG) station in Tanjung Priok, North Jakarta. The station has a capacity of 1,000 metric tons per day.

“Improvement of LPG distribution is our focus,” said Pertamina's Director Karen Agustiawan, Friday (20/3) in Jakarta.

She explained that better infrastructure is needed as the potential market increases due to the conversion program from kerosene to LPG. “The national consumption of LPG was only 3,700 metric tons per day last year. Now it is 6,030 metric tons per day,” she said.

Karen expected that the station reduce the problem of people lining up for LPG.

SORTA TOBING

Shell's renewables strategy to focus on biofuels

Shell's to focus on biofuels rather than wind, solar energy in alternative energy strategy 

Yahoo Finance

By Toby Sterling, Associated Press Writer, Tuesday March 17, 11:26 am ET 

AMSTERDAM (AP) -- Royal Dutch Shell PLC, Europe's largest oil company, said Tuesday its alternative energy strategy will focus more on biofuels than wind or solar energy, but revealed that investments in the sector are still only a tiny fraction of its overall business. 

Presenting the company's strategy, Shell said it has made $1.7 billion in investments in renewable energy and to reduce carbon dioxide output over the past five years. That compares with $1.7 trillion in company sales and $126.8 billion in net profit in 2003-2008. 

Executive board member Linda Cook said the company wouldn't give further details or disclose future spending plans in the individual categories of renewable energy. 

But she said Shell's ultimate goal is to build a "material business in alternative energy" and that the company plans to concentrate on biofuels at the expense of wind energy or solar power. 

Biofuels is the area closest to what Shell already does, she said at a strategy meeting in London broadcast on the Internet. "It's fuels, our brand is relevant, we're already present in the distribution business. So that one makes sense," she said. 

In the past year, Shell has signed deals with U.S.-based companies Virent Energy Systems Inc. and Colexis Inc. to develop plant-based alternatives to gasoline, with a focus on fuels not based on food crops. 

"On wind and solar (energy), they're interesting, but they continue to struggle in comparison with the other investment opportunities we have in our portfolio, even with substantial subsidies," Cook said. 

In the past Shell has been reluctant to disclose its spending on renewable energy, despite the urging of its own "sustainability" reporting panel. 

Cook rejected the idea that the company's spending on renewables is too small. 

"We have to start somewhere," she said. "If there aren't investment opportunities that compete with our other projects in the billions and billions then we won't spend the money on it (them)." 

She said the company's priority was to focus on investments that would "get the best return for shareholders. If those were in renewables today, we'd be putting money there, we'd be happy to. But that's just not the case. So we keep trying." 

Also Tuesday, Shell said its oil reserves were unchanged at the end of 2008 compared with a year earlier. 

That means 2008 was the first year the company hasn't pumped more oil than it has added to reserves since 2004, when an accounting scandal forced it to slash its proven reserves by more than a quarter. 

The company said net reserves were 11.9 billion barrels of oil or equivalents at year-end, enough to last about 10 years if it stopped developing new projects. 

Shell plans to increase production by 2 to 3 percent per year through 2012, after seven years of falling production. 

Chief Executive Jeroen van der Veer said Shell believes the current global economic downturn "could last more than a year" and Shell plans to reduce costs by demanding price reductions from suppliers. 

Shell has said the company does not expect to cut jobs. 

Shares fell 2.6 percent to euro17.30 in Amsterdam. 

In January, Shell reported full year 2008 earnings of $26.3 billion, down from $31.3 billion in 2007, due to falling oil prices and a corresponding drop in the value of its oil inventory. 

Pertamina to import LPG

Alfian, THE JAKARTA POST, JAKARTA | Wed, 03/11/2009 11:09 AM  

State oil and gas company PT Pertamina is seeking to import up to an additional one million metric tons of liquefied petroleum gas (LPG) per year,  an official says. 

The extra supply is needed to anticipate higher demand for LPG as the company intensifies the government’s kerosene-to-LPG conversion program this year, Pertamina’s deputy director for marketing and trading Hanung Budya told reporters on Tuesday. 

“We expect to distribute 23 million conversion packages this year. If we can achieve this target,  LPG demand will increase to more than 3 million metric tons. Thus, we will need a new supplier to provide us with between 500,000 to one million metric tons of LPG a year,” Hanung said. 

The nationwide conversion program was kicked off in December 2006 with assistance from Pertamina to phase out the use of kerosene  by households so as to cut government spending on fuel subsidies.  

Energy and Mineral Resources Ministry  data shows that  19,505,812 conversion packages  have  been distributed to households, and 877,691 to small businesses, between January 2007 and February 2009,  leading to an additional demand for 625,666 metric tons of LPG and replacing 2,232,718 kiloliters of kerosene. 

According to Hanung, LPG demand is currently at about three million metric tons a year, 2.2 million metric tons of which are to be supplied from domestic producers. 

Pertamina will also import between 800,000 and one million metric tons  of LPG this year from the Bermuda-based Petredec Limited oil company.  Pertamina signed a 10-year import contract with Petredec late last year. 

Hanung said Pertamina also wants the same contract period with another supplier that will be selected by the end of this semester. 

“We will hold a ‘beauty contest’ in the second semester of this year. We have been in talks with several companies, including one company from Abu Dhabi,” Hanung said without giving details about the company. 

According to Hanung, Pertamina would prioritize the supply of  LPG from domestic producers before deciding to import more from abroad. 

The government only subsidizes and fixes the price of the 3-Kg LPG canister, sold at Rp 4,250 (35.46 US cents) per kilogram. 

Pertamina also sells the 12-kg LPG canister and the 50-kg LPG canister at Rp 5,750 and Rp 7,255 per kg, respectively. 

The two LPG canisters sizes are not subsidized and Pertamina is not fully independent in setting these last prices but follows the  fluctuations in international market prices.