First phase of Kuala Namu airport project to be complete in 2009

Medan, N Sumatra (ANTARA News) - State Enterprises Minister Sofyan Djalil said the first phase of the Kuala Namu airport project in Medan, North Sumatra, costing Rp1.3 trillion, will be ready for operation in September 2009.

"The construction of Kuala Namu airport will be completed according to schedule. We even hope the schedule can be sped up," he said after a working visit together with Transportation Minister Jusman Syafii Djamal to Tanjung Morawa, Deli Serdang District, North Sumatra, on Friday.

State enterprises adhered to the principle of always doing the best for the nation and the state, he said. Therefore, land belonging to state plantation company PT Perkebunan Nusantra II might be used for construction of access roads to the airport.

The Kuala Namu airport complex would stand on 2,365 hectares of land but implementation of part of the project was still being hampered by a land clearance problem as some 63 families were still living on land needed for the project.

Hopefully, Deli Serdang district administration can solve this problem to let the construction of the airport run unhampered, he said.

In the meantime, the district development planning agency`s chief, Irman DJ Oemar, said his office had already paid compensation money to the 63 families.

"If they continue to stay there and do not want to move to other location, we have to use a legal mechanism," he said.

Chevron to Invest $4 Billion in Asia

Cron.com

BANGKOK, Thailand (AP) — Chevron Corp. will invest about $4 billion in Asia this year, mostly for petroleum exploration and production, a company executive said Friday.

"The company sees Asia as a very attractive place for investment for future growth," Steve Green, managing director of Chevron Asia South Ltd., told Dow Jones Newswires in an interview.

Chevron plans to spend $20 billion this year and 20 percent of that will be spent in Asia, he said.

The company's major plans for Asia include developing the Gorgon liquefied natural gas project offshore Australia, building petroleum production in Indonesia and Thailand, and exploring for oil and gas in Bangladesh, Cambodia and Vietnam, he said.

Asia accounts for a quarter of Chevron's 62 billion barrels-of-oil-equivalent in global reserves. The company plans to increase its global production by an average of 3 percent a year from now to 2010, Green said.

In the first quarter of the year, the company's worldwide oil-equivalent production was 2.64 million barrels a day, unchanged from the first quarter of 2006, the company said in April.

Chevron's gas production in Thailand, where it is the largest natural gas supplier, will increase a minimum 160 million standard cubic feet this year, Green said. He would not provide an estimate of current gas production in Thailand.

Chevron is in negotiations with Thailand's PTT PCL, the country's sole natural gas buyer, to supply an additional 330 million cubic feet of gas a day from its Platong II field in the Gulf of Thailand, Green said, when production begins in 2010.

The company's production in Bangladesh will increase by 200 million cubic feet of gas a day in 2007, after it started production from the Bibiyana field in March. Production from the field is targeted to reach 500 million cubic feet of gas a day by 2010. Chevron's total gas production in 2006 in Bangladesh averaged 310 million cubic feet of gas a day.

The company also has five exploration and production projects in China, where its average daily production in 2006 was 100,000 barrels of crude oil and condensate and 54 million cubic feet of gas.

Chevron drilled four exploration wells in Cambodia earlier this year and expects to have reserve estimations at its offshore oil and gas Block A there in the next few months, Green said. He didn't elaborate on the company's plans for Vietnam.

Chevron is also evaluating potential exploration projects in India, Green said.

Pertamina to drill 170 oil wells worth US$1.2 billion

Jakarta (ANTARA News) - State-owned oil company Pertamina is planning to drill at least 170 oil exploration wells with an estimated cost of US$1.2 billion in the coming several years, Pertamina President Director Ari Hernanto Soemarno said here over the weekend.

He said that the drilling of the oil wells was expected to help increase the country`s oil and gas reserves. "We hope that we would drill 35 wells this year alone."

The Pertamina president director said that one of the oil fields which was believed to hold large oil reserve was the Pondok Tengah field in Bekasi, West Java.

Currently, the oil production of Pondok Tengah reaches 4,000 barrels per day. This oil production capacity could increase to 26,000 barrels per day after the discovery of new reserves.

The 4,000 barrels per day is being produced in the Cluster A temporary production facility which began operation last year.

Pertamina is currently installing permanent production facility in the Cluster A and B areas, which is expected to be completed at the end of 2008.

Pondok Tengah`s oil production is channeled through a 22-km pipe network to Muara Gembung, Bekasi, from where the oil is shipped on a tanker to be transported to the Cilacap oil refinery plant in Central Java.

The government has been urging oil and operators to speed up exploration activities in order to support its plan of increasing the country`s oil production by 30 percent to 1.3 million barrels of oil per day by 2009.

Recently, Pertamina signed contracts with its counterparts for four Pertamina projects. The four Pertamina projects were expansion of the Subang gas field and the Pondok Tengah oil field with a total investment of US$343 million, construction of the main transit terminal of Balongan worth US$62 million and construction of the Cikampek Depot worth US$9 million.

Makro Indonesia to refocus on core business amid retail boom

The Jakarta Post, Jakarta

Makro Indonesia, the local subsidiary of Netherlands-based wholesaler Steenkolen Handels Vereniging (SHV), is to refocus its business strategy in response to the rapid growth in the country's retail industry.

Makro president director Kuswanto Gunadi said Friday that the firm was determined to regain its position as a leading wholesaler after sluggish growth over the past year resulting from the rapid expansion of modern retail outlets around the country, coupled with the adverse effects of 2005's double round of fuel price hikes.

"Looking at the supply-chain side, we actually have a massive market out there. Consequently, Makro will now refocus on its core business -- that is, being a wholesaler," he said.

Wholesalers sell goods in bulk to trade customers -- including both traditional and modern retailers, catering firms, hotels, cafes and restaurants -- who then supply them to third parties or the end consumers. This contrast with the business of a retailer, which sells directly to the end consumer.

Makro's new focus was being supported by a capital injection from the shareholders amounting to 25 percent of the company's total assets, Kuswanto said, while declining to disclose the actual amount of the capital injection.

The additional funds, he said, had been used in part to settle overdue accounts with suppliers.

"Our sales also increased by 30 percent during the first quarter of this year, compared to the corresponding period last year, thanks to the funding injection," he said.

Commenting on Makro's move, ACNielsen Indonesia retail services director Yongky Surya Susilo said that fast-growing modern retailers "have forced Makro to reinforce and refocus its business as a wholesaler."

Indonesian Retailers Association statistics show that the more than 5,500 modern retail outlets currently operated by its 86 members will help the retail business grow by between 15 and 17 percent this year on sales of some Rp 50 trillion last year.

According to Kuswanto, Makro management's was also determined to upgrade the companies human capital through training.

"Makro now has a new, solid management team, consisting of six new directors, excluding me, who are now ready to put the business back on the right track again," he said.

Makro currently operates 19 outlets in 13 cities in Sumatra, Java, Kalimantan and Sulawesi.

The wholesaler is more than 80 percent owned by Netherlands-based SHV. The remaining shares are owned separately by businessman Teddy Rahmat, the World Bank's private-sector arm International Finance Corporation (IFC), and Thailand-based agribusiness giant Charoen Pokphand.

Allianz sees big growth in RI, Asia-Pacific

Rita A. Widiadana, The Jakarta Post, Nusa Dua

Germany-based insurance and financial services provider Allianz Group sees its businesses in Asia-Pacific growing rapidly this year on the back of the region's robust economy, with China and India serving as the driving forces.

"Allianz Group has seen a strong performance in the Asia-Pacific region and worldwide," said Dr. Werner Zedelius, a member of the Board of Directors of Allianze SE, during his closing address to a meeting of the CEOs of Allianz offices in the Asia-Pacific countries Wednesday. The meeting was held in Nusa Dua, Bali.

The company's growth written premium (GWP) income in Asia increased about 70 percent. However, "even if we exclude China and India, growth is still very high at 24 percent," Zedelius said.

Worldwide, the group booked an operating profit of 10.386 billion euros in 2006 as compared to 8.003 billion euros in 2005, while 2006 net income amounted to 7.02 billion euros.

In the Asia-Pacific region, Allianz operates in 14 countries, including China, India, Singapore and Indonesia.

Bruce Bowers, Allianz's CEO Asia Pacific, said that the company had great belief in the region's potential. "We have been a long-time investor in the region and we believe and are very optimistic about economic conditions here."

Allianz Group first set up shop in Indonesia in 1981.

Eight years later, Allianz established PT Asuransi Allianz Utama as a general insurance provider. In l996, Allianz set up PT Asuransi Allianz Life Indonesia, which offers life and health insurance, savings and pension plans.

"As a whole, Allianz Life Indonesia has had an excellent year, and in the first quarter of 2007, our profit more than doubled compared to the same period last year," explained Jens Reisch, president director of PT Asuransi Allianz Life Indonesia.

As of the end of December 2006, Allianz Life had achieved GWP income of Rp 1.3 trillion with 360,000 policyholders. Currently, it has 80 agency offices in 44 cities and regions around the country, including Bali.

"We plan to open new offices in Banda Aceh and Ambon soon," Reisch said.

Meanwhile, PT Asuransi Allianz Utama Indonesia has 38,000 customers with GWP income of Rp 615 billion as of the end of 2006.

For Allianz Utama, the first quarter of 2007 was overshadowed by a number of natural disasters that resulted in a significant rise in claims.

"We have gone through hard times in this first quarter, such as the floods in Jakarta and other calamities," said Victor Sandjaja, president director of Allianz Utama.

"But we are now on the right track with our premiums target as our GWP increased by more than 5 percent during the first quarter compared to the same period last year, generating Rp 3 billion in profit before tax," Sandjaja said.

Tableware producer asks for more gas supplies for planned investments

The Jakarta Post, Jakarta

British tableware producer Royal Doulton has asked the government to resolve recent problems concerning gas supplies to the nation's ceramics industry against the backdrop of the company's plan to invest another US$28 million in Indonesia.

The issue has become a major consideration for the company in deciding whether to invest more in Indonesia's ceramic industry, Royal Doulton CEO Sir Anthony O'Reilly said after a meeting Wednesday with Vice President Jusuf Kalla.

Royal Doulton plans to invest between $25 and $28 million next year, which will add to its $75 billion investment so far in Indonesia, said Investment Coordinating Board (BKPM) chairman M. Lutfi, who had accompanied Sir Anthony during the meeting.

The new investment will be used to increase production to 12 million items at the company's existing factory in Banten, O'Reilly said.

The factory currently produces some $30 million-worth of porcelain tableware and other collectibles, of which 97 percent is exported. Royal Doulton has been investing in Indonesia since 1994, having made it its main production base, besides Bangladesh, India and the U.K. itself.

O'Reilly said that the local ceramic industry was competitive in the sense that it had a shorter production time of only 5 months, as compared to 15 months in the company's other production bases.

"Indonesian workers are also more skilled, producing higher quality products," he said.

O'Reilly, who had previously met with President Susilo Bambang Yudhoyono to discuss Royal Doulton's business plans here, said that Kalla had given assurances he would strive to resolve the issue of gas supplies for the company's investment needs.

Indonesia's ceramics industry has been experiencing production glitches since earlier this month following a drop in monthly gas supplies of 42 million MMBtu from state gas utility PT PGN.

The situation has forced at least 10 major local producers, including Roman Ceramic, Luki Ceramic, Arwana and Kopin, as well as overseas investors such as Toto and Royal Doulton, to cut output or stop production altogether, Indonesian Ceramics Industry Association (Asaki) chairman Achmad Widjaya has said.

Exports by the local ceramics industry accounted for $288 million out of Indonesia's total industrial sector exports of $78 billion last year. The industry also employs some 30,000 workers.

BP in talks to build third processing unit at Tangguh

Ika Krismantari, The Jakarta Post

British-based energy giant BP Plc.'s local unit, BP Indonesia, said Wednesday that it was in discussions with a group of investors to build the third and final train (processing unit), at its Tangguh liquefied natural gas (LNG) plant in Papua.

"There have been discussions with new investors in the past, some are still ongoing, and we will continue these in the future," BP Indonesia president director John C. Minge said.

While refusing to name names, Minge said that the project had drawn plenty of interest from potential investors.

Earlier this month, the world's largest LNG importer, Korea Gas (Kogas), told The Jakarta Post that it was interested in taking part in the development of a third train at the LNG plant.

The company is currently focusing on building the first and the second trains. Overall, the construction of the plant is 70 percent completed, Minge explained.

He said the company would start in June drilling the first of 15 planned wells in the next 18 months.

Asked about the additional US$800 million needed to finish the Tangguh project, Minge said that a team from BP and its partners, as well as the government, was looking into the issue.

Two major state-owned banks, Bank Mandiri and Bank Negara Indonesia (BNI), have said they might join a syndicate of local and foreign banks to provide the additional funds.

The extra money will come on top of the $2.6 billion disbursed in August for the project by an international consortium of foreign banks.

BP is the largest single investor in the Tangguh plant, and holds a 37.16 percent stake. CNOOC, China's largest offshore oil producer, is the second biggest with 16.96 percent.

Other investors include Mitsubishi Ltd. and Inpex Corp., which hold a combined 16.3 percent interest in Tangguh. A Nippon Oil Corp.-led grouping has a 12.23 percent stake, and LNG Japan, owned by Sumitomo Corp., and Sojitz Holdings Corp. hold 7.2 percent.

Japan Oil, Gas & Metals National Corp., Kanematsu Corp. and Mitsui & Co.'s Overseas Petroleum Corp. hold a combined 10 percent.

PLN to reselect developer for Paiton power plants

Jakarta (ANTARA News) - State-owned electricity company PLN will re-select a company to be appointed developer for units 3 and 4 of the Paiton thermal power plant (PLTU) expasion project which has a designed capacity of 1 x 800 Megawatt (MW) in East Java.

PLN spokesman Ario Subijoko said in a press statement made available to ANTARA here on Friday that PLN will conduct the re-selection of a developer because until the deadline there had been only one company submitting an application.

He said that PLN had set the deadline for application on April 23, 2007 but until then only one company, namely PT Paiton Energi, had applied.

"Therefore, PLN has canceled its plan to conduct direct appoinment of the would-be developer of units 3-5 of the Paiton PLTU expansion projects, and decided to conduct re-selection," Subijoko said.

He said that PLN would offer again a chance to two developers to submit their applications for direct appointment that would be carried out in the near future.

Subijoko said that in the framework of the development of units 3-4 in the expansion projects of Paiton PLTU, PLN had previously invited two companies to file applications for direct appointment to carry out the project.

The two companies were PT Paiton Eneri and PT Jawa Power. So far, PT Paiton Energi had been operating units 7 and 8 of the Paiton PLTU while PT Jawa Power had been operating the plant`s unit 5 and unit 6.

President Susilo Bambang Yudhoyono recently asked PLN to improve its performance by increasing its electricity supply capacity.

He said Indonesia needed many more power plants so that PLN had to raise its electricity supply capacity to 10,000 Megawatt in the next three or four years.

The president told PLN to do it jointly with other parties.

He said the construction of power plants should not be done in only one or two cities or islands but across the country.

BP, Rio Tinto Venture to Develop Clean Coal Energy

By Stephen Voss

May 17 (Bloomberg) -- BP Plc and Rio Tinto Plc formed a joint venture, Hydrogen Energy, to develop technology for producing power from coal, oil and natural gas without emitting the gases blamed for global warming.

Rio will pay $32 million to BP to form the equally owned venture, which includes two planned BP hydrogen-fuel projects in Scotland and California that will cost at least $1 billion each.

``Projects such as these have the potential to help deliver the carbon emission reductions which companies and countries around the world are now seeking,'' BP Chief Executive Officer Tony Hayward said in a statement today.

The U.S. and China, the world's two largest energy consumers and carbon dioxide emitters, are unlikely to abandon coal for power generation, since they have large domestic reserves of the mineral. The U.S. says it wants cleaner technologies that will allow it to use coal while also reducing emissions.

BP, the world's third-largest non-state-owned oil company, and Rio, the world's third-largest mining company, have previously formed a partnership on coal-mining in Indonesia, before selling that business in 2003. Ten years ago, BP was the first major oil company to acknowledge man-made carbon dioxide emissions could affect the climate.

Clean Power Plant

BP has spent two years developing an industrial-scale, 475- megawatt power plant in Peterhead, Scotland, that emits less greenhouse gas. Using natural gas as a feedstock, the plant will separate hydrogen, which will be used to make clean power, from carbon dioxide, which will be piped to the North Sea and buried in an oil field 2.5 miles below the seabed.

Carbon dioxide would remain buried ``literally forever,'' or for hundreds of years, Steve Westwell, BP's group vice president for alternative energy, said on a conference call from Houston.

BP has also announced plans for a second experimental plant at its Carson refinery in California, where it will make hydrogen from coke, a low-value refinery byproduct.

``Although initial projects may be based on non-coal feedstocks, they will be significant building blocks in the development of coal gasification on an industrial scale,'' Rio's chief executive officer, Tom Albanese, said in today's statement.

Rio is among the world's largest coal producers, along with Xstrata Plc., BHP Billiton Ltd. and Peabody Energy Corp. A venture with BP will enable Rio to offer technology for coal-fired plants without producing large quantities of greenhouse gases. BP is not planning to re-enter the coal business through the joint venture, Westwell said.

BP's Projects

The Peterhead project has completed its engineering design work and is awaiting a decision on financial support from the U.K. government, BP said. If a decision to proceed with the project is made next year, it could start operation in 2011.

Gordon Brown, who will become U.K. Prime Minister next month, said earlier this year companies will need to compete for government funding for carbon-capture and storage projects. More details are expected in a government policy paper on May 23.

Westwell said economic ``incentives'' are needed for carbon, capture and storage projects because of the added expense in creating clean electricity.

The Carson, California, project could be operational by the end of 2012 ``subject to the successful outcome of engineering studies and appropriate policy being in place,'' BP said.

Project Leaders

Hydrogen Energy will be based in Weybridge, in southeastern England, and led by Chief Executive Officer Lewis Gillies, the former head of BP's hydrogen-power business. Its chief financial officer will be Peter Cunningham, formerly the head of business evaluation at Rio.

BP and Rio are both headquartered at St. James's Square in central London and new chief executive officers started at both companies on May 1.

They also have management links: BP's executive vice president for gas, power and renewables, Vivienne Cox, who runs the company's alternative energy business, is also a non-executive director on Rio's board. Andrew Mackenzie joined Rio as the head of its industrial minerals division in 2003, after two decades in exploration at BP.

Rio Tinto chairman Paul Skinner is the former head of oil refining at BP's arch rival, Royal Dutch Shell Plc.

To contact the reporter on this story: Stephen Voss in London at sev@bloomberg.net

Shell, Petronas to build gas stations outside Java

Jakarta (ANTARA News) - The government has licensed foreign oil and gas companies Shell and Petronas to build gas stations outside Java later this year, an Energy and Mineral Resources Ministry official said.

"But I cannot mention where the gas stations will be built," the director of downstream business development at the Energy and Mineral Resources Ministry, Erie Soedarmo, said here on Thursday.

The two companies currently run a number of gas stations in Jakarta and environs.

The planned construction of gas stations could be part of the companies` preparations to engage in the sale of premium gasoline and subsidized diesel oil, he said.

Under Law No.22/2001 on Oil and Gas, the government was allowing companies other than state oil and gas firm Pertamina which had so far monopolized the distribution of subsidized fuel oil to engage in the business, he said.

However, no company except Pertamina met the requirements to engage in the distribution of subsidized fuel oil, he said.

One of the requirements was that the companies must have gas stations in and outside Java, he said.

Indonesian firm buys New Zealand toilet-paper maker

Wellington (ANTARA News) - Flush with cash, Indonesian conglomerate Asia Pulp and Paper (APP) is buying New Zealand toilet paper manufacturer Cottonsoft as part of a global expansion plan, it was reported Thursday.

APP, the world's fifth-largest pulp and paper supplier, is acquiring 75 per cent of the privately-owned New Zealand company immediately and the remaining 25 per cent after two years, Cottonsoft chief executive Steve Silvey was quoted by DPA as telling the Otago Daily Times.

He said that with a current annual capacity of 7 million tonnes, APP is the second biggest producer of paper, bleached hardwood pulp and packaging in Asia.

"They wanted to come to Australia and New Zealand," Silvey said.

"They have global expansion plans, and realised they couldn't come here on their own."

Cottonsoft, the last New Zealand-owned producer of toilet paper and paper towels, claims to be number two in the local market. Silvey said it would continue to be based in Dunedin.

Canada Grants Rp2 Billion To Overcome Terrorism

Tuesday, 15 May, 2007 | 14:21 WIB

TEMPO Interactive, Jakarta: The Canadian government granted mechanisms for the prevention of chemical, biological, radiological and nuclear weapons for terrorism handling. In addition , Canada will give training.

The grant are to be given in the amounts of US$250,000 or equivalent to around Rp2 billion. This was revealed by the Canadian Ambassador John Holmes to Secretary of the Coordinating Minister for Politics, Law and Security Agustadi Sasongko, yesterday (14/5).

“This contribution shows the strategic interests owned by Canada in supporting the development of anti-terrorism in Indonesia,” said John.

Similar grants have been given by Canada since 2004. From this cooperation, Canada has sponsored four training sessions of prevention of chemical, biological, radiological and nuclear weapons, in Semarang, Surabaya and twice in Jakarta.

According to Agustadi, so far there has not been any indication that terrorism groups in the country use such weapons.

Bakrie builds biodiesel plant

The Jakarta Post

BATAM, Riau Islands: PT Bakrie Rekin Bio Energy is building a biodiesel processing plant in Batam, which is expected to start operating mid next year and be able to process 100,000 tons of biodiesel annually, mainly for the overseas market.

State Minister for Research and Technology and chairman of the Agency for the Assessment and Application of Technology Kusmayanto Kadiman laid the cornerstone at the four-hectare factory site near Kabil Port on Monday.

The factory and facilities will cost US$22 million to build and are expected to employ at least 200 workers.

PT Bakrie Sumatera Plantation will supply the plant with crude palm oil, the main raw material for producing biodiesel.

Kusmayanto said the factory would not interrupt CPO demand for the production of domestic cooking oil. "It is the people who should change their dietary pattern. If they eat fried food, they should opt for boiled food ,which is more healthier," he said.-

PT Bakrie Sumatera Plantations managing director Ambono Janurianto said 70 percent of total production would be allocated for the overseas market and the rest for the domestic market.

Exxon, Pertamina seek ways for early production at Cepu block

Ika Krismantari, The Jakarta Post, Jakarta

ExxonMobil Oil Indonesia and its partner, state-owned oil and gas company Pertamina, are seeking a way to meet the government's request to begin oil production at the Cepu oil and gas block by the end of 2008, or two years ahead of the initial schedule, an executive of the American oil giant says.

Peter J. Coleman, the president director of a local unit of the United States-based ExxonMobil Corp, said here Monday that Exxon and Pertamina were still discussing with the country's Upstream Oil and Gas Regulatory Agency BPMigas and the government's oil and gas research and development center Lemigas to find a possible solution in order to meet the government's target.

The government and the operators have been at odds regarding the timetable for the commercial production at the Cepu block. The government has been urging the operators to speed up exploration activities, so it can start producing by the end of 2008, in order to support the government's plan of increasing the country's oil production by 30 percent to 1.3 million barrels of oil per day (bopd) by 2009 from the current 1 million bopd.

However,"social and technical problems" have prevented the operators from meeting the government's target, BPMigas deputy chairman Trijana Kartoatmodjo said in December.

With the land acquisition problems, Exxon and Pertamina said that the commercial production could be carried in 2010.

Beside social issues, Exxon is also facing technical difficulties that are preventing it from commencing production in Cepu on schedule.

Coleman said that he understood why the government asked Cepu oil production to begin either by the end 2008 or by early 2009. But he said that the government should also assess whether it would be economically viable for the early production, given such social and technical problems.

In February, the government offered Exxon and Pertamina a "fast track" arrangement, under which the government would provide assistance with the land acquisition process, which has been hindering the development of the US$2.6 billion project.

Cepu, located at the border of East Java and Central Java, contains an estimated 600 million barrels of oil and 1.7 trillion cubic feet of gas.

The block is expected to produce 25,000 barrels of oil a day when it starts a production. The figure could increase to some 165,000 barrels a day.

Inpex set to invest $88m in oil exploration

Ika Krismantari, The Jakarta Post

Japan's largest oil and gas firm, Inpex Holding Inc., is setting aside US$88 million for the drilling this year of four appraisal wells in its Masela block, located in the Timor Sea.

Hirohisa Ota, Inpex general manager for the Jakarta office, said Monday the move was needed so as to verify the gas reserve, which may lead to further investment ahead as the drilling would also determine whether the firm would need to build an LNG terminal or an LNG floating terminal in the area.

Ota was speaking at the sidelines of the 31st annual Indonesian Petroleum Association (IPA) that runs until May 16.

The Masela block, which was awarded to Inpex in 1998, is located in the Timor Sea at more than 2,000 meters deep. The preliminary reserve is reported to be big enough to provide 3.5 to 5 metric tons per year of liquefied natural gas (LNG) for 20 years.

The drilling at the Abadi field in the Timor Sea started last week and it is expected to finish within eight months as one well requires around two months of drilling, Ota said.

In addition to the $88 million, from 1998 to 2008, the company has allocated another $91 million for its 10-year exploration activities.

Beyond 2008, Nico Muhyiddin, Inpex administration manager, said the company had set aside a budget of up to $800 million for the 2008-2010 period.

Nico also added that the gas from the Abadi field, which is wholly owned by Inpex, may likely be compressed into LNG at a floating terminal, construction of which may start in 2011 and be completed in 2014.

Saudi bizmen ready to help RI small enterprises

Jakarta (ANTARA) - Saudi businesspeople through Foras Investment Co have expressed readiness to help Indonesian small- and medium-scale enterprises (SMEs), especially those facing capital difficulties, a businessman said.

"Saudi businesspeople are ready to help Indonesian SMEs especially those engaged in plantations, energy and trade," Sudradjat DP, Chairman of the Indonesian Chamber of Commerce and Industry (Kadin)`s Middle East Committee, told newsmen here Monday.

He said the Saudi businesspeople had conveyed their readiness through Kharim Jamil Mukhtar, chief delegate of Foras Inestment Co, who is also assistant to the secretary general of the Islamic Chamber, at a meeting with 40 Indonesian counterparts here on Monday.

The Saudi businesspeople were ready to provide the assistance among others to increase the economic capability of Indonesian businesspersons who are mostly Muslims.

"Similar assistance through Foras Investment Co has also been distributed to a number of SMEs in Senegal, Egypt, Turkey, Pakistan and Malaysia," he said.

The mission of Foras Investment Co. was to increase the economic growth and natural resources in Islamic countries as well as to develop industrial and trade activities to create job opportunities besides improving the economic life of Muslims, he said.

"In addition, the company with capital amounting to about US$ 100 million will also help create new companies in different sectors and help projects which are facing financial problems," Sudradjat said.

Indonesia`s export commodities to Saudi Arabia include paper, automotive batteries, automobiles, tires, garments, food products and electronics while the country`s sole import commodity from Saudi Arabia was crude oil.

Indonesia`s competitors in trade with Saudi Arabia are China, South Korea and Thailand.

Indonesian govt to spend US$5 bln revitalizing sugar mills

Jakarta (ANTARA News/Asia Pulse) - The Indonesian government is to make US$5 billion in funds available to revitalize old sugar mills in the country, a spokesman said.

Industry Minister Fahmi Idris said here on Monday there were at present only 10 to 20 sugar mills in the country that were under 10 years old.

He said the drop in the country's sugar production was in part related to the technology used in the sugar mills and therefore revitalizing their machines would be the main priority. Most of the mills are located in Central and East Java.

Leading Chinese firms to stage exhibition in Jakarta

Jakarta (ANTARA News) - At least 54 leading Chinese companies will hold an exhibition in Jakarta on May 24-27 as part of their efforts to explore the possibility of establishing investment and trade cooperation with Indonesian counterparts, a spokesperson said.

Representatives of the 54 firms based in 13 Chinese provinces would come to Indonesia to find out more about Indonesian markets, Chinese International Trade Promotion Body (CCPIT) Director Liang Haiguang said here Tuesday.

Although many Chinese manufactured goods were already available in Indonesia, the Chinese companies still wanted to promote products that boasted the latest technological features, he said.

Cheri QQ was one of the Chinese products already being marketed in Indonesia, he said.

Liang said Chinese automotive manufacturing company Foton had established a joint venture with an Indonesian firm to set up a truck assembling plant in Indonesia.

But he said he did not know the investment value which was needed to set up the truck assembling plant.

According to Liang, the value of Indonesia-China trade had continued to increase over the past few years. It was recorded at US$19 billion in 2006, or up by 13.5 percent from 2005 and was in Indonesia`s favor.

Liang also said the value of Chinese investment in Indonesia in 2001-2006 was recorded at US$600 million in 310 projects.

Meanwhile, Tao Hun, second secretary for economic and commercial affairs at the Chinese Embassy, said in 2006 China`s exports to Indonesia reached US$9.4 billion and Indonesia`s exports to China US$9.9 billion.

China and Indonesia had set themselves the target to increase the value of their bilateral trade to US$30 billion by 2010, Tao said.

Carrefour to open nine new outlets in Indonesia

Jakarta (ANTARA News/Asia Pulse) - A subsidiary of French retail giant Carrefour, PT Carrefour Indonesia, said it will open nine new outlets in the country. Carrefour also opened nine new outlets last year.

The first of the nine units planned this year was already commissioned early this month in Denpasar, Bali with an investment of Rp116 billion (US$1.8 million), the President of Carrefour Indonesia Jean Noel Bironnneau said.

The nine new outlets would bring the total number of its outlets in the country to 30, including 20 in Jakarta.

Swiber wins new contract offshore Indonesia

Offshore Shipping Online

Contracts, Tenders and Rates - May 11, 2007

Swiber Holdings Limited has announced that its wholly-owned subsidiary, Swiber Engineering Limited, has successfully entered into a Letter of Agreement worth US$21.3 million for the installation of platforms and pipelines at the West Madura and Poleng Fields in Indonesia.

Under the terms of the LOA, the date of completion of the pipelines is on 31 October 2007, while the date of completion of the platforms is targeted for 30 November 2007.

Mr Raymond Goh, Swiber’s Executive Chairman and Chief Executive Officer, said: "Winning the new project is a great testimony to the hard work and dedication of Swiber’s

team. It was only in 2002 that we began our focus on the development of our offshore EPIC business. With each project wins, we are cementing position in this niche sector.”

Swiber’s latest offshore installation project in Indonesia follows close on the heels of a separate offshore installation contract signed with international oil giant Brunei Shell Petroleum Company Sdn Bhd recently.

The latter with Brunei Shell saw Swiber being awarded a major US$146.6 million contract – the Group’s first project in Brunei, and its single largest offshore installation contract to date.

Swiber expects to realise approximately US$70.5 million in 2007, and the remaining US$76.1 million in 2008.

Medco to invest $400m in eight bioethanol plants

Ika Krismantari, The Jakarta Post, Jakarta

The country's largest publicly traded oil company, PT Medco Energi Internasional, plans to build eight bioethanol plants over the next five years to meet the expected surge in the demand for biofuels both at home and overseas, the company's chief executive says.

Speaking on the sidelines of a biofuel seminar Thursday, Medco president director Hilmi Panigoro said that the company would spend about US$400 million on building the eight bioethanol plants, which would be capable of producing 10,000 barrels of oil equivalent per day (boed).

He said that the first of the plants was now under construction in Lampung, with a total investment of about $46 million.

"We hope the plant will start producing by December this year at an estimated initial production of 180,000 liters (about 1,132 boed)," Hilmi said.

Within the five-year timeframe, Hilmi said he expected Medco would build another seven plants with the same production capacities.

He also said the company would seek some 100,000 hectares of plantation land in West Java and Papua, adding to its existing 15,000 hectares in Lampung.

Hilmi said that the output of the new plants would mostly be exported, given the currently high prices for ethanol on the global market.

However, he said he had no objection to the government's proposal to oblige ethanol producers to sell their production on the domestic market.

"As long as the regulations are clear and do not harm our business," he said.

Previously, Evita H. Legowo, an assistant to the energy and mineral resources minister and also the first secretary of the National Biofuel Development Committee, told The Jakarta Post that the government planned to impose a domestic market obligation so as to secure biofuel supplies in the coming years.

Indonesia's demand for biofuel is expected to reach 5.29 million kiloliters by 2010, about 9.84 million kiloliters by 2015 and 22.26 million kiloliters by 2025.

Hilmi predicted that by 2025 there would be 371 biofuel plants, which would require a total investment of $17 billion.

Hilmi also said that Mitsubishi Corp., Japan's largest trading company, had agreed on the minimum amount it would pay for gas to be processed at its proposed US$700 million liquefied natural gas (LNG) plant in Senoro, Sulawesi.

Under the agreement, Mitsubishi would pay at least $3.85 per million British thermal units for the gas to be supplied from the Senoro and Matindok gas fields.

The Senoro field, in which Pertamina and Medco own equal stakes, has proven reserves of 1.4 trillion cubic feet of gas, while the nearby Matindok field, which is wholly controlled by Pertamina, has 700 billion cubic feet of proven reserves.

The plant will produce 2 million tons a year of LNG by the end of 2009, all of which will be exported to Japan.

11 Japan Loan Bank Projects Delayed

Thursday, 10 May, 2007 | 14:51 WIB

TEMPO Interactive, Jakarta: The National Development Planning Agency (Bappenas) has discovered that the realization of 11 infrastructure projects funded with loans from the Japan Bank for International Cooperation has been delayed.

“The delayed projects belong to the Public Works Department, the Transportation Department, Cipta Karya and Bina Marga,” Benedictus Benny Setiawan, Director of Development Funding Monitoring and Evaluation told Tempo at his office, Jakarta, yesterday (9/5).

Benny explained that the projects were delayed because of land acquisition and project procurement.

Four projects were delayed because of land acquisition problem, Batanghari Irrigation; North Java Corridor Flyover, Tanjung Priok Access Road and Double Double-Track.

The projects which were delayed by procurement are Lower Solo River Improvement, Komering Irrigation Project, PTSL for Water Resources Development and the Railway Electrification and Double Double-Track.

The projects' procurement was hampered due to land acquisition.

The Dumai Port project was delayed by the Indonesian Military (TNI) Navy’s quay demolition.

The problem was settled in the end of 2006, but the process must be accelerated because it is likely to not to be completed on schedule.

The Maritime Education and Training Improvement project is also not in accordance with schedule due to design alterations.

The constraints resulted in the absorption of loans being low.

Benny said that not all of the loans from the Japan Bank were absorbed.

The US$5.95 billion in loans from the Japan Bank is equivalent to 40.8 percent of the total foreign loans for infrastructure projects.

Funds from Japan Bank are allocated for 51 projects.

The delay in projects and fund absorption did not make the government pay commitment fee to Japan Bank.

However, infrastructure facilities cannot be enjoyed soon by the general public and economic costs have occurred.

“Roads were ruined due to high transportation cost,s so goods' prices are also high,” said Benny.

Kurniasih Budi

Seven Companies Ready to Form Palapa Ring Consortium

Thursday, 10 May, 2007 | 19:10 WIB

TEMPO Interactive, Jakarta: Seven companies have stated their readiness to form a consortium of national fiber optic network construction project worth US$1.517 billion or around Rp13 trillion.

The seven companies will sign the memorandum of the project known as Palapa Ring next Wednesday (16/5).

Basuki Yusuf Iskandar, Director General of Post and Telecommunications, said that the consortium business model was taken to overcome the need of large funds for the Palapa Ring project.

“Together, the cost burden will be lesser,” said Basuki after the transfer of Information and Communication minister post at the Information and Communication Department building, Jakarta, Wednesday (9/5).

He explained that the ownership of the fiber optic network will be submitted to each of the companies in the business scheme consortium.

The government only acts as facilitator for each company.

The companies that are ready to join the Palapa Ring consortium are PT Telekomunikasi Indonesia Tbk. (Telkom), PT Indosat Tbk., PT Exelcomindo Pratama,Tbk., PT Infokom Elektrindo, PT Bakrie Telecom Tbk., PT Powertek Utama Internusa and PT Nusantara Ekaprana Teknoguna Kelola.

EKO NOPIANSYAH

Lippo Karawaci to build more hospitals

The Jakarta Post, Jakarta

Publicly listed property company PT Lippo Karawaci Tbk will expand its healthcare business by renovating two of its international-standard Siloam Hospitals, and building five new ones at a total cost of US$500 million.

President director Viven G. Sitiabudi said Tuesday that the company would open four more hospitals in Jakarta and another one in Bandung over the next five to 10 years.

The four new hospitals in Jakarta will be built at Semanggi, Central Jakarta; Kemang, South Jakarta; Puri Indah, West Jakarta; and Pluit, North Jakarta, with each hospital having 250 beds.

Currently, the company operates hospitals in Jakarta at Lippo Karawaci, Tangerang at Lippo Cikarang, Bekasi and Surabaya, as well as a specialist clinic in Jakarta.

"This year, we will start our expansion program by building a Siloam Hospital in Semanggi and renovating hospitals in Kebon Jeruk, West Jakarta, and in Surabaya," Viven said, adding that the three projects would cost the company about $50 million.

The groundbreaking ceremony for the Siloam Hospital Semanggi, which will include a cancer center, will take place Saturday, with the hospital slated to open its doors in December 2008.

According to Viven, the cancer center, to be called the Mochtar Riyadi Comprehensive Cancer Center (MRCCC), would be the first privately owned and the most comprehensive oncology center in Indonesia. It would provide complete cancer diagnoses and treatments, including early detection of the disease, with state-of-the-art technologies, such as positron emission tomography scanning, high intensity focused ultrasound and radio immunotherapy.

She said that the company would invest $21 million on medical equipment for the new cancer center.

"By establishing new hospitals equipped with sophisticated equipment and staffed by medical professionals, we hope that those patients who would usually go to neighboring countries like Singapore for medical treatment will now seek it at our hospitals," she said.

She added that the new hospitals were expected to boost the annual number of patients served by the company to some two million over the next five to 10 years from about 600,000 at present, and to create about 4,000 new jobs.

Besides the cancer center at the Siloam Hospital Semanggi, the company will also establish a surgical center at the Siloam Hospital Puri Indah.

The two hospitals to be renovated -- the Siloam Hospital Kebon Jeruk and Siloam Hospital Surabaya -- will be equipped with trauma, gastroenterology, fertility, orthopedic and sports medicine centers.

The hospitals currently operated by the company already boast a number of specialist facilities. For example, the Siloam Hospital Lippo Karawaci has neuroscience and cardiac centers, while the Siloam Hospital Lippo Cikarang has urology and internal disease centers.

Viven said that in financing the expansion project, the company would use the $100 million in proceeds raised by real estate investment trusts (REITs) -- stock-market instruments associated with the property business -- that it issued last year in Singapore.

The healthcare business, Viven said, contributed 25 percent of the company's total revenue last year, which amounted to Rp 1.9 trillion (US$208.7 million).

Besides its healthcare business, Lippo Karawaci is also a major player in the property business, including like commercial, retail, residential and industrial property.

Bali to commence thermal power plant development

Denpasar, Bali (ANTARA News) - Bali province is expected to begin the development of a 400-MW thermal power plant (PLTU) around Celukan Bawang port, Beleleng district, in an effort to anticipate power crisis in the tourist resort island.

"The thermal power plant is expected to commence operation in stages in 2008," Public Relations Coordinator of state-owned electricity company PLN, Hendra Saleh said here on Thursday.

He said that the development of the power plant would be done in cooperation with investors and was expected to meet the need for electricity supply of Bali until five to ten years to come.

The PLTU plant will use coal to fire electricity generator so that its operational cost could be lower than other plants in Bali which so far used diesel oil, he said.

He said that the construction of the additional power plant was expected to be completed in 2009. "With additional 400MW, the need for power supply in Bali would be met until five to ten years to come," Saleh said.

So far Bali has been supplied with 580 MW of power supplies, consisting of 200 MW from Java, 130 MW from Gilimanuk power generators, 120 MW from the Pesanggaran diesel power plant and 80 MW from the Pemaron gas-fired plant.

President Susilo Bambang Yudhoyono recently asked PLN to improve its performance by increasing its electricity supply capacity to 10,000 Megawatt over the next four years.

He said Indonesia needed many more power plants so that PLN had to raise its electricity supply capacity to 10,000 Megawatt in the next three or four years.

The president told PLN to do it jointly with other parties.

He said the construction of power plants should not be done in only one or two cities or islands but across the country.

Ministry to issue investment update

The Jakarta Post - 2007-05-09 10:04:44

JAKARTA, May 9, 2007 (JP) - The Ministry of Foreign Affairs is to start publishing a periodic economic update on business opportunities in Indonesia's major provinces so as to help provide reliable information about the country's investment opportunities to foreign investors.

The ministry said Tuesday in Jakarta that the first edition of the newsletter, to be called Update from the Regions, would be launched at the ministry headquarters in Jakarta on Thursday. Minister of Foreign Affairs Hassan Wirajuda and Riau Governor Riau Rusli will be present for the launch of the update.

The first edition of the update will focus on business and investment opportunities in the agricultural, mining and tourism sectors in Riau, in addition to a number of proposals for projects, such as the construction of a highway linking Pekanbaru and Dumai, the construction of an international port and an industrial estate in Tanjung Buton, and the building of a cement plant in Rokan Hulu regency.

Administration to conduct tunnel feasibility study

Adianto P. Simamora, The Jakarta Post, Jakarta

The Jakarta administration will conduct a feasibility study on a plan to build a 22-kilometer tunnel aimed at resolving chronic water and transportation problems in the capital.

"If everything runs smoothly, the administration can complete the technical design by 2009 and start construction by 2010," Firdaus Ali, a member of the Jakarta Water Supply Regulatory Body told reporters after meeting with Governor Sutiyoso on Tuesday.

According to the project design, the administration will construct two levels of roadway in the tunnel as well as waste water reservoirs.

Waste water will then be processed to become clean water in North Jakarta's Pluit drain, the product of which will meet the water requirements of up to 1.5 million residents.

Above the roadways, the tunnel will be used as a utility duct.

The project was first proposed by the body in February after severe flooding which inundated much of the capital.

In its initial proposal, the Rp 4.37 trillion project was designed to handle repetitive floods in the city with the capacity to entrap 30 million cubic meters of water.

Sutiyoso briefed members of the House of Representatives and the City Council on the project at the time and due to negative responses from legislators the body redesigned the project.

It has been proposed that the 22-kilometer tunnel with a diameter of 12 meters will be constructed 15 meters below the West Flood Canal from Jalan MT Haryono in East Jakarta to Muara Angke in West Jakarta.

"At first we proposed the construction of a deep tunnel intended to cope with annual flood problems. But we have now integrated turnpikes, wastewater management and a water recycling system like those in Singapore and Malaysia into the design," Firdaus said.

The body's head, Achmad Lanti, sought support from members of the Regional Representative Council at a seminar on flood problems.

"The project is a good alternative for Jakarta because there will be no need for land acquisition. We hope councilors can support our idea," he said.

The body said that underground drilling works would be conducted using a global positioning system to avoid disturbances or activity on the surface.

Similar underground reservoirs have already been constructed in big cities such as Chicago, Singapore and Kuala Lumpur.

To materialize this plan, the administration will organize an international seminar on deep tunnels to attract investors to fund the project.

Firdaus said that representatives from the Islamic Development Bank (IDB) and investors from Malaysia would attend the seminar.

"We hope 70 percent of funding for the project will come from private companies," he said.

Jakarta has long experienced floods in the rainy season and droughts in the dry season due to uncontrolled land use which has caused land permeability to be low.

Of the city's average rainfall of two billion cubic meters per year, only 170 million cubic meters of rain becomes groundwater, with a water deficit of 36 million cubic meters per year.

The administration is also under pressure to improve the city's poor transportation system which causes heavy traffic congestion daily.

Telekom Malaysia to raise capital spending especially in Indonesia

The Jakarta Post

KUALA LUMPUR (AP): Telekom Malaysia plans to raise its capital spending to 8 billion ringgit (US$2.34 billion) this year to expand its network and services abroad particularly in Indonesia, a top official said Tuesday.

Capital spending this year will be 48 percent higher than last year's 5.4 billion ringgit to boost its operations overseas, especially in Indonesia, Telekom Chief Executive Abdul Wahid Omar told reporters.

Some 5 billion ringgit of this year's allocation will go to Telekom's overseas operations in Indonesia, India, Sri Lanka and Pakistan, he said. He didn't give details of the expansion.

Telekom, unlike power firm Tenaga Nasional, has not asked the government to increase the percentage of foreign equity shareholding in the company, Abdul Wahid said.

Indonesia`s Mobile-8 sets 2007 capex at $125 mln on network expansion

Jakarta (ANTARA News) - PT Mobile-8 Telecom, a CDMA-based mobile phone operator, plans capital spending of 125 mln usd this year, up from 10 mln usd last year, company president Hidajat Tjandradjaja said.

He said a large portion of the spending will be allocated to expanding its phone coverage area in Java, Madura and Bali islands, either by building its own base stations or leasing them from developers.

He added the company plans to expand its coverage area to West and East Kalimantan and West and East Nusa Tenggara next year.

Capex for 2008 is expected to decline to 75 mln usd, he told XFN Asia.

Tjandradjaja said the company expects its cellular subscribers to increase to 4 mln this year and 7 mln next year from around 2 mln at end-March.

He said he expects the company's cellular phone market share to expand to 5 pct by the end of this year from around 3 pct last year.

"Assuming our subscribers will increase to 4 mln this year, we expect our revenue to rise to 1.5-1.8 trln rupiah this year," he added. Last year, the company booked sales of 588.64 bln rupiah.

Tjandrajaja added shareholders have today approved the management's plan to merge the company's wholly-owned units PT Metro Selular Nusantara (Metrosel), PT Komunikasi Selular Indonesia (Komselindo) and PT Telekomindo Selular Raya (Telesera), with Mobile-8 to become the surviving entity.

Construction of US$3.1 bln Sulawesi oil refinery to start in Dec

Jakarta (ANTARA News/Asia Pulse) - The regional investment board of South Sulawesi says construction work on a Rp28.3 trillion (US$3.1 billion) oil refinery in the province's Pare Pare region will begin in December this year.

Investment board official Andi Nuralam, said a joint venture between Saudi, U.S. and Indonesian investors is set to be signed, allowing for work to begin on the project - as soon as an environmental analysis report on the site is approved.

So far, the project has been delayed several years from its first conception in 2003, partly because of the long time taken to complete the environmental study, Nuralam said.

RI invites German automakers to get into Indonesian fast lane

The Jakarta Post

The government has invited three big German automakers in to make Indonesia their production bases and gateways to other Southeast Asian countries, pointing to an improving investment climate and the possibility of fiscal incentives.

"European carmakers are seeking new countries to establish their production bases in as the economies of the Asian countries grow rapidly, particularly those in eastern Asia," the Industry Ministry's director general for transportation and IT industries, Budi Darmadi, said Monday.

Budi and Investment Coordinating Board director Muhammad Lutfi met with automaker executives last week during a three-day visit to the German headquarters of Volkswagen in Wolfsburg, Mercedes Benz in Stuttgart and Audi in Ingolstadt.

Budi and Lutfi were on a mission to persuade the executives that they would benefit from opening auto plants in Indonesia.

Mercedes Benz has had an assembly plant in Gunung Putri, east of Jakarta, since 1985, while the country's economic crisis forced Volkswagen to shut its plant in 2000 after only two years in operation.

Budi said that Audi and Volkswagen, whose plants in China and South Korea serve the Southeast Asian and Pacific regional markets, were both convinced they would be unable to keep up with growing demand should they rely solely on their bases in these two countries.

"China's demand takes up almost all the Volkswagens and Audis produced there, let alone the markets in other countries."

Indonesia's total commercial and passenger vehicle sales nose-dived to 318,304 in 2006 from 534,000 in 2005 due to higher lending rates.

Total automotive sales this year amounted to 84,511 as of March. Sales are expected to increase to 400,000 this year as demand picks up on the back of declining interest rates.

At last week's meeting, Budi said, Volkswagen had informed him it was looking into the possibility of investing here, while Mercedes Benz would keep its base here and might expand its production. "Audi will likely invest here but wants to wait for a while".

Ahmad Badawi, the national sales manager of PT Garuda Mataram Motor, the licensed Volkswagen distributor in Indonesia, earlier said that Volkswagen would not consider producing cars here for the time being due to low sales.

Last year, Volkswagen sold 57 vans, down from 91 in 2005.

According to Budi, the automakers are now looking at Indonesia due to falling lending rates, the faster pace of infrastructural development, the introduction of new car models and the increase in per-capita income -- which is growing annually by between US$400 and $500, on average.

Other pluses included the new Investment Law -- passed late last month -- and the Finance Ministry's regulation removing duty from automotive components and raw materials for automotive component production, which was issued on April 3 and came into effect last Thursday for a one-year period. Previously, import duties ranged from between 5 and 15 percent.

Mercedes Benz led the premium automotive market last year on 692 cars, followed by BMW on 600, Audi on 90, Volvo on 69 and Jaguar on 27.

Indonesian shipbuilders receive orders worth US$220 mln

Jakarta (ANTARA News/Asia Pulse) - Shipping companies from the Netherlands, Britain and Germany will place orders for cargo ships and tankers worth US$220 million from Indonesian shipbuilding companies.

PT Destini Marine and three state shipyards PT Dok & Perkapalan Kodja Bahari, PT Dok and Perkapalan Surabaya and PT Industri Perkapalan Indonesia, are scheduled to sign contracts with the foreign shipping companies in July, a company official said.

Negotiations are in the final stage with prospective buyers, Chairul Anhar, president of Destini Marine, said.