Sengkawang to invest US$136 mln in Indonesia`s energy sector

Jakarta (ANTARA News/Asia Pulse) - PT Energy Sengkawang plans to invest US$136 million to build power plants and gas pipeline in Sengkawang, the regency of Wajo, South Sulawesi.

Company president Paul Ivan Edwards said Energy Sengkawan will invest around US$120 million in a 60-megawatt gas fired power plant and a 60-MW coal fired power plant projects.

The gas fired power plant is expected to be operational this year and the coal fired power plant to follow in 2010, Edwards said.

The gas pipeline project to cost around US$16 million will transport gas from the Baru well to the power plant.

Total Indonesia plans to spend $1.9 bln in 2009

Mon Jul 7, 2008 10:24am BST 

JAKARTA, July 7 (Reuters) - The Indonesian unit of French oil major Total (TOTF.PA: Quote, Profile, Research) plans to spend $1.9 billion in 2009 on development of new wells and upgrading older wells in the Mahakam block on Kalimantan island, a company official said on Monday. 

Indonesia, Asia Pacific's only OPEC member, has stepped up efforts to lure more foreign investment into the energy sector in a bid to increase the country's dwindling output. 

Total said last year it had made two new gas discoveries in the southern part of the offshore Mahakam block, about 45 kilometres (28 miles) from Balikpapan in Indonesia's East Kalimantan province. It expects the field to start producing in 2012. 

Total, one of the bigger investors in Indonesia's oil and gas sector, is seeking an extension of its contract for the Mahakam oil and natural gas block which is due to expire in 2017. 

The Mahakam block supplies about 80 percent of the feed gas for the Bontang liquefaction plant in Indonesia. Japan's Inpex (1605.T: Quote, Profile, Research) also holds a 50 percent share in the block, which is estimated to have to have 11 trillion cubic feet of gas. 

"The capital expenditure for 2008 is $1.9 billion, we will spend about the same in 2009," the head of Total E&P Indonesia, Philippe Armand, told reporters after meeting Vice President Jusuf Kalla. 

The 2008 capital expenditure figure is higher than an earlier estimate of $1.5 billion. 

"Total currently produces 2.6 billion cubic feet of gas per day. Maintaining such production levels in the next two to three years needs high capital," another Total official, who declined to be identified, told Reuters. 

The official said the firm expected the government to extend the Mahakam block contract following an liquefied natural gas (LNG) price agreement between Indonesia and Japanese buyers who buy from the Bontang plant. 

In March, an official at state oil firm Pertamina had said Indonesia and Japanese buyers have agreed on a price for the extension of LNG contracts which are due to expire in 2010 and 2011. 

Indonesia and Japan had agreed the LNG price based on crude oil prices will be around $16 per million British thermal unit if oil prices are at $100 per barrel. 

The new contracts are for 3 million tonnes a year over five years and another 2 million tonnes a year over the next five years. 

The new contract has not been signed yet as Indonesia and Japanese buyers are still talking on other issues. 

Indonesia has failed to meet all of its long-term contractual commitments for a number of years due to depletion of its gas fields and higher domestic demand, tightening the LNG market and driving up prices.

Indonesia's LNG production is set to slide by 4 percent this year, and exports may fall even further as it seeks to divert more gas to the domestic market, industry officials say. 

LNG production is expected to fall to 358 cargoes of 125,000 cubic metres each this year from 372 cargoes in 2007. 

(Reporting by Muklis Ali, Writing by Harry Suhartono, editing by Sugita Katyal)

Indonesia asks for Delhi Metro's assistance

Business Standard, New Delhi July 04, 2008, 19:53 IST

Indonesia has sought Delhi Metro's assistance in providing consultancy services for the proposed metro system in its capital Jakarta.

A high level transport delegation  from Indonesia met E Sreedharan, MD, DMRC to discuss the possibility of DMRC providing consultancy service to the Jakarta metro.

The Indonesian delegation indicated that they would soon approach DMRC for signing a memorandum of understanding (MoU) in areas including economic operational viability studies since the Delhi metro is one of the few metro's in the world making operational profit.

Other countries that have shown interest in Delhi Metro's expertise include Syria, Pakistan, Ireland, Sri Lanka, Vietnam etc.

VP says Terminal 3 of Soekarno-Hatta Airport ready this year

Jakarta, (ANTARA News) - Vice President Jusuf Kalla has expressed optimism that the construction of Soekarno-Hatta International Airport`s terminal-3 would be completed at the end of this year.

"I have just inspected the construction site of terminal-3 and I find that it will be completed at the end of this year," the vice president said after the inspection at Soekarno-Hatta Airport on Saturday.

Meanwhile, project manager Yudhi Listiono said the completion of terminal-3 has reached 38 percent from the original target of 37 percent.

Yudhi also explained to the vice president that the construction of the terminal was divided into five phases and would be completed in two years.

"But the first phase will be ready at the end of this year," Kalla said.

The vice president explained that when the first phase of terminal-3 was ready, it would be able to accommodate 4 million people, but when all five phases were ready they would accommodate 20 million people.

"So far, terminal-1 and terminal-2 only accommodate around 20 million, but every year they accommodate more than 34 million passengers," Kalla said.

Therefore, he asserted that the construction of terminal-3 should be accelerated to anticipate the increasing economic growth.

UOW to lead major study of Indonesian marine fisheries

University of Wollongong, 4 Jul 2008 | Bernie Goldie 

A research team from the Australian National Centre for Ocean Resources and Security (ANCORS) at the University of Wollongong has won a major four-year, $1.5 million nationally competitive research grant that could have a significant impact on marine fisheries in Indonesia. 

The project is funded by the Australian Centre for International Agricultural Research (ACIAR). 

The University team is led by Associate Professor Ron West, a leading Australian fisheries scientist and includes Professor Martin Tsamenyi and Dr Mary Ann Palma, experts in ocean law and policy. The CSIRO (Marine and Atmospheric Research) and the Indonesian Ministry for Marine Affairs and Fisheries (MMAF) will be collaborators in the research. 

Indonesian fisheries are among the largest and most productive worldwide, and are critical to that nation’s economic development and in providing food resources to millions of people. 

Based on the UN's Food and Agricultural Organisation's (FAO) data for 2004, about 4.5 million tonnes of marine fish (valued at about $US3.2 billion) are harvested by millions of people using a wide range of fishing gears, including hundreds of thousands of fishing boats. 

Professor West said this places Indonesian marine capture fisheries among the top five in terms of fisheries production. 

FAO data have shown that many regency, provincial and national government agencies are involved in administering these fisheries and that the current arrangements have led to a confused situation where “effective management is difficult to achieve”. 

As a result of the lack of effective management, Illegal, Unreported and Unregulated (IUU) fishing throughout Indonesian waters has become a major issue that confounds attempts to manage fish stocks. 

"Consequently, there is an urgent need to develop effective assessment and policy frameworks to better manage Indonesian fisheries," Professor West said. 

The primary objective of the research project will be to develop a better understanding of the characteristics of the many of the district and provincial fisheries throughout Indonesia (for example, details of the fishing methods, capture species, fished areas, unregulated fishing activities, licensing and regulatory framework) and to investigate new and innovative assessment and management approaches. 

It will require a detailed survey of fish markets throughout Java, Lombok and Bali, and investigating policy options with the goal of improving long-term sustainability. 

"This project is likely to have significant impacts on marine fisheries in Indonesia, such as improvements in the quality of fisheries data, stock assessments, fishery information; increased capacity in terms of fisheries management, particularly within provincial government; adoption, broader dissemination and further refinement of resource assessment methodologies; and, new policy and regulatory frameworks," Professor West said. 

It is expected that the research will lead to the establishment of more effective fisheries management; greater sustainability in fishing practices; improved food security; more sustainable catches; economic benefits to local communities; and, increased government revenue.

Antam to acquire interest in Martabe Gold, Silver Project

The Jakarta Post 

Antara, Jakarta | Fri, 07/04/2008 6:34 PM 

State mining company PT Aneka Tambang (Antam) on Friday announced it had signed a memorandum of understanding (MoU) with Australian-based Oxiana Limited. 

The basis of the MoU with Oxiana is to cooperate in examining opportunities and to form joint ventures or other cooperative ventures for the exploration, development and operation of precious or base metal or bulk commodity projects within Indonesia, PT Antam said in press statement. 

The first transaction under the MoU to be considered is for Antam to acquire an interest in Oxiana's Martabe gold and silver project in the Indonesian province of North Sumatra. The Martabe gold project is owned by PT Agincourt Resources, in which Oxiana holds a majority interest. 

Antam's new president director, Alwin Syah Loebis, said "the execution of the MoU with Oxiana is in line with our intention to keep gold as an important part of our product mix and to offset the depleting reserves of our gold mine at Pongkor." 

Acquiring gold and diversifying away from nickel were important parts of the company's main strategy to create shareholder value in the medium term, he said. 

Under the MoU, Antam will purchase 10 percent of the Martabe project for US$66.5 million and has an option to acquire a further 10 percent of the Martabe project for a further US$66.5 million, subject to adjustments for movements in the market prices for gold and silver, operating and capital costs and other matters on successful commissioning of the project. 

Antam is also able to acquire a further 5 percent of the Martabe project for a consideration based on the market value of the project at the time. 

This further option is subject to Oxiana approving the expansion of the Martabe project to an annual production rate of not less than 300,000 ounces (9 tons) of gold equivalent production per annum. 

The Martabe gold project involves the development of the Martabe gold and silver deposit in Northern Sumatra, Indonesia, at an estimated capital cost of US$310 million. 

Antam had considered investing in Martabe in 2006 but decided to not pursue the acquisition beyond a certain price.

UNESCO supports planned world ocean conference in Manado

The Jakarta Post

Antara, Manado | Fri, 07/04/2008 6:39 PM 

UNESCO has pledged its support for the World Ocean Conference (WOC) to be held in Manado from May 11 to 15, 2009 as part of efforts to deal with global warming.

"Several member states of UNESCO have expressed their readiness to participate in WOC in Manado, as their response to the threat of environmental and marine degradation," North Sulawesi Governor Sinyo Sarundajang told the press here on Friday.

Sarundajang attended the Intergovernmental Oceanographic Commission Forum, the 41st Session of the UNESCO Executive Council, in Paris from June 24 to July 1, 2008.

Some 50 countries attending the UNESCO forum expressed their support for the Indonesian government initiative to organize WOC because marine environmental preservation is crucial for the whole world, he said.

The governor and Indonesian Ambassador to UNESCO Aman Wirakartakusumah was asked to present the plans for WOC at the UNESCO meeting.

They also held a meeting with UNESCO World Heritage Center deputy director Kishore Rao to report on what North Sulawesi had done to prepare its Bunaken Marine Park as a world marine biodiversity site.

Indonesian students not so interested in studying in Netherlands

Jakarta (ANTARA News) - Indonesian students have low interest in pursuing studies in the Netherlands so that they needed to be encouraged further, Marrik Bellen, director of the Dutch Educational Assistance Office (NESO), said here on Thursday.

Bellen said only about 500 Indonesian students go to the Netherlands to pursue further studies with scholarships or through a self-funding mechanism every year.

"We will begin a new central registration system with the Dutch Embassy in Jakarta so that we will know the exact number of Indonesian students who go to the Netherlands for further studies," he said.

He said that compared with Australia and Britain, the Netherlands had not yet become a main destination to Indonesian students due to various reasons.

Bellen said the main reason was that Dutch universities were not being promoted in Indonesia as intensively as British and Australian ones.

He said the aim of Dutch universities in inviting students was not seeking for profit because they adopted a public system financed by the government.

The number of international students in the Netherlands reached 50,000 a year, of which 25,000 come from European countries, 19,500 from non-European nations and about 7,000 exchange program students.

Indonesian president to launch massive Total gas fields

SENIPAH, Indonesia (AFP) — Indonesian President Susilo Bambang Yudhoyono is due to inaugurate Friday a massive new gas operation off Borneo by French giant Total, the company said.

The first phase of the Sisi-Nubi gas fields off East Kalimantan's Mahakam Delta went on stream in November and is scheduled to reach peak production of 350 million cubic feet (10 million cubic metres) a day by the end of the year.

Total, which operates Sisi-Nubi with INPEX and state energy monopoly Pertamina, is the largest gas producer in Indonesia.

The massive offshore project off the eastern end of Borneo has been highly anticipated as Indonesia seeks to cash in on surging prices for oil and gas.

The Sisi-Nubi fields will expand the existing Mahakam block, enabling Total to hold output at around 2.6 billion cubic feet per day into the next decade, according to the company.

Bayan aims to raise Rp 6.4 trillion from IPO in August

Alfian, The Jakarta Post, Jakarta | Thu, 07/03/2008 10:38 AM

Coal producer PT Bayan Resources plans to sell 25 percent of its shares through an initial public offering (IPO) in August and expects to gather up to Rp 6.4 trillion in proceeds.

The country's eighth largest coal producer will sell 833.33 million shares, 500 million of which are existing shares and the remaining 333.33 million new shares, at prices ranging between Rp 5,600 and Rp 7,700 each, said Akhabani, a director at PT Trimegah Securities, which is arranging the sale.

The book-building period for the IPO will run from July 29 to August 1, 2008. The shares will begin trading on August 8, 2008, on the Indonesian Stock Exchange.

Company president director Eddie Chin Wai Fong said approximately 60 percent of the proceeds would be paid to existing shareholders.

The remaining 40 percent of the proceeds will be used on expansion projects, including the acquisition of a floating transfer station in Kalimantan worth up to Rp 315 billion and the development of coal mining projects in East and South Kalimantan that will absorb up to Rp 1.02 trillion, he said.

The company is considering whether to acquire more coal mines in the future, Eddie said.

Finance director Alastair McLeod said with the coal sales price expected to increase to an average of between $76 and $80 per ton by the end of the year, the company forecasts revenue to reach more than $750 million in 2008, up from $374 million last year.

The year net profit depends much on the fluctuation of crude oil prices as fuel consumption contributes 30 percent to the production costs, Alastair said. He refused to make a net profit estimate.

The company booked Rp 252.7 billion in net income last year.

Bayan expects to increase its coal production to 9 million tons this year from 4.7 million tons last year. The 2008 projected sales volume is 9.9 millions tons, up from 7.1 million tons last year.

Through its eight subsidiaries, Bayran owns the rights to mine coal in 81,265 hectares of land in East and South Kalimantan. The company exports all of its coal production, but remains aware of the need to fulfill domestic demand.

"We have participated in the PLN (state-owned electricity company) tenders and we would continue to do so," McLeod said.

RI explores free trade agreement with Australia, NZ, India

The Jakarta Post

Antara, Jakarta | Wed, 07/02/2008 3:20 PM

Indonesia is exploring the possibility of concluding Free Trade Agreements with Australia, New Zealand and India after signing similar pacts with China, ASEAN and South Korea, says a Finance Ministry official.

"We have held preliminary discussions with India, Australia, and New Zealand, but the most comprehensive talks were held with Japan," said the Finance Ministry's Fiscal Policies Board chief Anggito Abimanyu on Wednesday.

He said the agreements with the three countries would probably cover trade aspects rather than economic cooperation in a wider sense.

"But maybe they will only provide for free trade or reduction of import duties," Anggito said.

Commenting on the Indonesia-Japan Economic Partnership Agreement (IJ-EPA), Anggito said that under the agreed cooperation framework there were two import duty reduction schemes, namely the general reference tariff scheme and the user specific duty free scheme (USDFS).

Under the IJ-EPA, especially in relation to the general preference tariff scheme, it was agreed that Indonesia would lower of its duty tariff posts to zero percent starting on July 1, 2008, while Japan would lower 80 percent of its tariff posts.

Garuda Food Group to invest US$444 mln in expansion

Jakarta (ANTARA News/Asia Pulse) - Indonesian company The Garuda Food Group has set aside Rp4 trillion (US$444 million) to finance business expansion in the next five years and make itself the largest food company in Asia.

The company was set to chalk up income of Rp10 trillion in 2012, chief executive officer Sudhamek AWS said. The company will strengthen its position in snack and soft drink business in the next year with an investment of Rp1 trillion, Sudhamek said.

The expansion will be financed with loans and fund expected to be raised from an initial public offering scheduled for next October, he told the newspaper Investor Daily at the weekend.

Harvey Nichols, Domino's Pizza to hit Indonesia

The Jakarta Post, Jakarta | Mon, 06/30/2008 10:50 AM

The country's leading retail-marketer for lifestyle brands, PT Mitra Adiperkasa (MAP), will bring London's premier fashion store Harvey Nichols and U.S.-based Domino's Pizza to Jakarta.

Company vice president Virendra Prakash Sharma said the two new stores were part of the company's plan to expand by 122 stores by the end of the year.

MAP opened 23 new stores in the January to May period, and had 692 stores in operation as of the end of last month. They include stores for fashion, lifestyle, sports, children, Starbucks coffee, Kinokuniya bookstore and high-end department stores Sogo, Debenhams and Seibu.

The company has allocated Rp 275 billion for the expansion, of which 40 to 50 percent will be spent on Harvey Nichols and Domino's Pizza, according to group head of investor relations Ratih D. Gianda.

The company has allocated Rp 60 billion for Harvey Nichols, which will open in Grand Indonesia shopping center in September, she said.

"Harvey Nichols is going to be the most luxurious department store in Indonesia," Sharma said.

The company will open five Domino's Pizza restaurants, the first of which will be opened on Aug. 15 in Pondok Indah, she said.

In line with its American counterpart, Domino's Pizza in Indonesia will focus on delivery, she said.

"Our biggest consideration for Domino's Pizza is to find locations without traffic, as delivery service is our main concept," Sharma said.

To take advantage of holiday sales, the company will also bring forward the openings of 99 other new stores to before the Ramadhan period, he said.

MAP booked Rp 1.03 trillion (US$112.3 million) in sales in the first quarter of this year, up 22 percent from Rp 844 billion in the same period last year. It recorded Rp 3.9 trillion in sales last year, an increase from Rp 3.3 trillion in 2006.

The company booked Rp 115 billion in net profit last year, a slight increase from Rp 109 billion in the previous year.

MAP will pay out Rp 19 billion from its 2007 net profit in dividends, or Rp 11.5 per share, as approved during a shareholders meeting Friday.

The company's department store unit contributed 44 percent to the company's 2007 net profit, while its specialty store unit also contributed 44 percent, Sharma said.

The company's food and beverage unit contributed 7 percent, while units including bookstores contributed 5 percent to the company's net profit.

The company targets revenue growth this year to increase by between 20 and 25 percent.

Ratih said the company also planned to relocate its Debenhams store in Plaza Indonesia to Supermal Karawaci in Tangerang, Banten, in August.

She said Karawaci's Debenhams would offer more varied products at more affordable prices.

"It's not that we would lower our market segment. In fact, the Supermal Karawaci management was the one who invited us to help upgrade the mall's status level," she said.

"We have our own concepts targeting middle-income customers, like Java Department Store and Sports Depot," she said, adding that the two stores had succeeded in attracting middle-income customers, in line with the company's business strategy to broaden its consumer base.

Sharma said the company was also working to expand its drive-through system for Starbucks. Currently, the company already has 64 Starbucks coffee shops; three of which incorporate the drive-through system.

"The drive-through concept is very profitable, and we're looking forward to opening more Starbucks stores in petrol stations," he said.

Sharma said the company would continue to expand its brand portfolio, and has also this year introduced two new apparel brands: MaxMara and Pull and Bear.

MAP's brand portfolio includes Calvin Klein, Emporio Armani, Giorgio Armani, Loewe, Massimo Dutti, Zarra, Marks and Spencer, Lacoste, Kipling, Swatch, Reebok, Adidas, Topshop, Topman, Nine West, Pizza Marzano, Burger King and Cold Stone Creamery. (dia)

 

Govt awards two local firms with CBM projects

The Jakarta Post, Jakarta | Fri, 06/27/2008 10:06 AM

On the same day the government awarded two companies with coalbed methane (CBM) contracts, a seminar Thursday revealed the price of the commodity was still not attractive enough to lure more investment.

PT Ridlatama Mining Utama won a contract to extract gas from coal seams in a block in East Kalimantan, while PT Samantaka Mineral Prima will develop a block in Riau province.

R. Priyono, chairman of oil and gas regulator BPMigas, said the companies would spend a combined US$13 million to develop the areas over the first three years.

Ridlatama will keep 45 percent of its revenue from CBM sales, while Samantaka will take 40 percent, with the government pocketing the remainder, Priyono said.

Indonesia has one of the largest coalbed methane reserves in the world, boasting a potential of 453 trillion cubic feet of the commodity, or double the country's natural gas reserves, according to Bloomberg.

CBM is formed at great depths under the Earth's surface, where immense pressures compress methane into a near-liquid state, allowing it to be absorbed by coal. Coal reservoirs can store as much as five to six times more gas than those formed of regular rock.

Once it has been mined, CBM is refined into natural gas.

However, due to high extraction costs, CBM development remains slow in Indonesia, the seminar was told.

Budi Basuki, president director of domestic oil and gas company PT Medco Energi International, said at current global prices contractors made only minimal profits or just broke even.

"CBM has great long-term prospects due to its huge reserves, but players also look at the price," he said during an international CBM conference in Jakarta.

"I'd say if CBM, which has the same end product as natural gas, is priced at $5 (per million British thermal units (MMBtu)) at wellhead, it will be more interesting," he said.

Medco, in partnership with local company Ephindo, won the first CBM tender last month to operate on its own oil and gas field in South Sumatra.

All of the produce from the site will be sold on the domestic market, at a lower price than if it were exported.

Natural gas designated for power and industrial plants in South Sumatra sells at between $2.5 and $3 per MMBtu, while that piped to power plants in Java is priced at between $3.5 and $4 per MMBtu.

However, a field in Natuna, Riau Islands, operated by PremierOil, sells the commodity to a power plant in Batam at $5 per MMBtu, but fetches $11 per MMBtu for exports via pipeline to Singapore.

Liquefied natural gas sold to Japan, Korea and Taiwan from Bontang, East Kalimantan, is priced at between $9 and $10 per MMBtu.

The international futures price for natural gas is at $12.7 per MMbtu.

Indonesia scraps proposal to limit takeovers to 80%

Gulf Times, Sunday, 29 June, 2008, 01:45 AM Doha Time

JAKARTA: Indonesia’s capital markets regulator will allow investors to buy all the shares of a company during a mandatory general offer, scrapping a proposal to limit purchases to 80%.

Under the new proposal, investors will have to sell a 20% stake in the takeover target to the public at a later date, Ahmad Fuad Rahmany, chairman of the Capital Market and Financial Institutions Supervisory Agency, said.

The regulator raised the threshold that will trigger a mandatory offer to 50% from 25%, Rahmany said. The new rules would allow Qatar Telecom to abandon its general offer for PT Indosat, Indonesia’s second-largest phone company.

“Qatar Telecom is not obligated to do a tender offer,” Rahmany said in a mobile-phone text message on Friday.

On June 7, Qtel agreed to pay $1.76bn to buy a 40.8% stake in Indosat. The Doha- based company said on Friday it would complete a general offer in 30 days, at a price of 7,388 rupiah a share.

“If they voluntarily want to buy public shares, then they might be limited by other regulations,” Rahmany said.

Under government rules, an overseas investor is limited to a 65% stake in an Indonesian mobile-phone operator and a 49% stake in a fixed-line phone company. Indosat made 77% of its sales from its mobile-phone units.

Malayan Banking, Malaysia’s biggest bank that’s buying 56% of PT Bank Internasional Indonesia, may have to offer to buy all the shares of the Indonesian bank. Bank Internasional’s shares rose 5.8% to 460 rupiah at the Jakarta close, a two-week high.

Still, investors said the requirement to ensure 20% of the stock is owned by the public at a later date may deter some companies from purchasing rivals.

“Selling shares at a later stage can be problematic because share prices may decline over time,” said Finny Fauzana, who helps manage about $347mn in assets at PT PNM Investment Management in Jakarta. “That’s bad for the company making the acquisition.” – Bloomberg

Japan needs 1,000 Indonesian workers

Manado, N Sulawesi, (ANTARA News) - Japan is in need of 1,000 Indonesian workers, comprising 600 nurses and 400 people taking care of elderly people on contract basis for 3 and 4 years.

"This is the first time that the Japanese government made a formal request for Indonesian workers," President Director of the Japan External Trade Organization (JETRO) in Jakarta Kusaoke Sadanobu said at a seminar on Indonesia-Japan bilateral trade opportunities, in Manado last Wednesday.

Potential nurses and caregivers, Kusaoke said, before leaving for Japan for employment, would first have to undergo a series of tests and interviews.

"And upon arrival in Japan, they will have to follow special trainings to be obtain a Japanese national certificate with the expenses borne by the Japanese government," Kusaoke said.

Deputy for coordination of economic cooperation and international funding at the Ministry of Economic Affairs Mahendra Siregar said according to the manpower ministry, 300 people were already set to leave for Japan to take up the two jobs.

"The Indonesian government will try until the end of 2009 to meet the Japanese request for 1,000 Indonesian workers for employment in Japan," Mahendra said.

He added that the project was part of the Indonesia-Japan Economic Partnership Agreement (IJ-EPA).

It was also revealed in the seminar that 1,000 Japanese companies are operating in Indonesia with 280,000 local employees.

In the meantime, head of the North Sulawesi Industry and Trade Agency Gemmy Kawatu revealed that Japan is the seventh biggest country of destination of North Sulawesi`s exports, with the balance of trade between the province and Japan still in favor of the Indonesian province in the last three years.

In 2005 exports to Japan reached 13.46 million US dollars, and imports 613.3 thousand US dollars, leaving 12.03 million US dollars in the balance of trade in favour of Indonesia, and in 2006 the exports increased to 27.03 million US dollars and imports 5.6 million dollars leaving the balance of trade a surplus of 11.5 million dollars, and in 2007 the exports reached 19.27 million dollars, and imports 2.6 million dollars still leaving a surplus of 15.6 million dollars for Indonesia.

CITY FAIR

The Jakarta Post, Jakarta | Fri, 06/27/2008 7:34 AM

Workers make final preparations before the opening day of the Jakarta Fair on Thursday. The fair, held annually to commemorate the city’s birthday, is expected to attract three million visitors and book Rp 2 trillion (US$216 million) in transactions. (JP/Ricky Yudhistira)

RI among Asia-Pacific's top expansion destinations

The Jakarta Post, Jakarta | Thu, 06/26/2008 10:39 AM

Indonesia remains attractive to expansion-minded multi-national firms despite global fallout from the U.S.' sub-prime crisis, a survey reveals.

According to a report by global real estate management firm Jones Lang LaSalle, of 15 nations surveyed in the Asia-Pacific region, Indonesia ranks sixth in a list of top destinations for business expansions -- ahead of Malaysia, Australia, Cambodia, Japan, Korea, Thailand and Hong Kong.

China topped the list, followed by India, Vietnam, the Philippines and Singapore.

Eighty-three percent of the multi-nationals said they would increase or maintain their current growth rates in the region, while 28 percent accelerated the growth of their operations in the region in this year's second quarter, the report shows. 

The survey company's CEO for regional business lines and corporate solutions John Forrest said emerging markets in Asia were the world's bright spots for growth at the moment. 

Asian countries were less affected by the sub-prime turmoil, with the property sector remaining bright, he said. 

"We're still seeing strong demand for space. However, an uncertain economic environment is forcing corporations to find smarter ways to manage their growth," Forrest said. 

Demands for commercial office spaces in Jakarta's commercial business district continued to grow, with the occupancy rate in the first quarter of this year rising 24 percent, the report shows. 

The growth was due mostly to tenant expansions, the company said. 

New office buildings in Sudirman and Kuningan in South Jakarta accounted for the bulk of leasing activity, mainly involving banking, oil-and-gas and services companies. 

Jones Lang LaSalle surveyed 30 senior corporate real-estate executives from leading multi-nationals in Asia-Pacific in the second quarter of this year. 

The survey covered three sectors -- financial services, technology and consumer goods. 

Among the three, the financial services sector was predicted to be the most aggressive this year based on data showing that 44 percent of the companies added growth plans in the first quarter of this year, and 33 percent predicted higher growth by the end of this year. 

The consumer goods sector, on the other hand, showed mixed responses, with one third of the companies saying they would expand their growth plans, another third saying they would downsize their businesses and the rest expecting to maintain their current expansion rates. 

Companies in this sector will likely look to initiate operations in the region to take advantage of promising new markets or shift current operations within it to search for lower-cost destinations. (dia)

Saudi proposes joint investment promotion initiative to RI

The Jakarta Post 

Antara, Jakarta | Thu, 06/26/2008 4:33 PM

A Saudi investor has proposed Indonesia and Saudi set up a joint promotion company to increase investment in both countries.

According to the chairman of the Global Unions Company of Saudi Arabia, Dr. Khalid S. Al Musa, the proposed body would promote investment projects.

He said the joint company would also serve as a consultant, and that Saudi Arabia was ready to conduct a feasibility study on its establishment.

Indonesia's exports to Middle Eastern markets are relatively small, Al Musa said, adding that bilateral relations in the business sector were increasing.

Saudi investment in Indonesia has reached US$28 billion.

Energy minister summons 25 oil contractors

Jakarta (ANTARA News) - Energy and Mineral Resources Minister Purnomo Yusgiantoro on Friday summoned 25 oil contractors who had yet to meet their oil production targets as set in the revised 2008 State Budget.

After meeting with the oil contractors, the minister said that most of them had not yet reached their production targets due to operational constraints.

"We will assist them so that they can meet their production targets," the minister said.

Among the oil contractors were PT Pertamina EP, BOB Pertamina-BSP, Kondur Petroleum, JOB PN-Golden Spike, Hess-Indonesia Pangkah, Klrez Energy, Kangean Energy Indonesia, Petroselat, Petrochina Bangko, Camar Resources Canada, JOB PN-Costa International Group, Medco EP Nus Lematang, Lapindo Brantas and Mobil Cepu Ltd.

The minister said that of the 25 contractors, nine had achieved 95 percent of their production targets, 14 were still under 95 percent and two were still not in production.

Yusgiantoro said the 25 oil contractors were part of the 37 oil contractor companies which had been in production.

He said 12 other oil contractors had met their targets set at the revised 2008 state budget.

"Although there are oil contractors which have not yet achieved their targets, we are optimistic that the overall production target set in the revised state budget at 977,000 barrels per day would be achieved," the minister said.

Up to June 15, 2008, Indonesia`s oil and condensate production had reached 978,000 barrels per day.

Yusbiantoro said that constraints being faced by the oil contractors included limited rigs, land overlapping and clearance, lack of production facilities, operational disturbance such as damage to compressors, power cuts and infrastructure facilities.

Last week, President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla held a closed-door meeting with top executives of gas and oil companies.

"Issues related with oil and gas were discussed in the meeting. President Yudhoyono explained that the Indonesian government has made a series of efforts at international level to respond to current developments in the energy situation," Yusgiantoro said.

RI ranks high in attracting trade

The Jakarta Post, Jakarta | Fri, 06/20/2008 10:34 AM

Indonesia is good at attracting international trade with its relatively competitive tariff barriers, but our border controls and distribution channels create major obstacles, a report says.

The Enabling Trade Index in the 2008 Global Trade Report published Wednesday by the World Economic Forum compares 118 countries' openness and international trade capabilities.

Overall, Indonesia ranked 47th among the 118 countries. Hong Kong topped the list, followed by Singapore, Sweden, Norway and Canada. Malaysia ranked 29th, China 48, Thailand 52 and Vietnam 91. 

The index sums up countries' market access, border administration, transport and communications infrastructure, and business environments. 

Indonesia's trade has been well supported by regulatory openness and a competitive business environment, but has been stalled by poor infrastructure and difficult processes at its borders. 

The country's trade policies allow relatively open market access for foreign goods. Indonesia has low non-tariff barriers and moderate tariff barriers. It is cheap to import, although goods may be held up with customs and domestic transport problems, meaning there are more procedural steps to clear along the way. 

In terms of trade policies, Indonesia was ranked in the top 22 countries, ahead of Britain, Australia, Italy, Singapore, and Malaysia. 

The index also showed a very good regulatory environment including the ease of hiring foreign labor, ease of foreign ownership, and regulations encouraging foreign investment. Indonesia was ranked 34th in this category. 

On top of that, Indonesia has competitive liners connectivity, perhaps due to its location, competitive shipping costs and logistics companies. 

However, as soon as the goods arrive in Indonesia, they are welcomed with inefficient customs administration, irregular payments and corruption at the border. 

According to the Indonesian Chamber of Commerce and Industry (Kadin), exporters and importers must set aside between 5 and 15 percent in additional costs to cover bureaucracy at the customs office. 

The challenges bubble up as distribution is held up by low quality roads, ports and airports -- all of which are ranked among the bottom 20. 

As of March, Jakarta's traffic management center recorded 120 sites where roads were damaged in Jakarta, causing traffic congestion and putting road users at risk. 

In infrastructure, Indonesia scored much lower than Malaysia, China, Thailand and India, although it was comparable to Vietnam. Indonesia came in at 74th in transport and communications infrastructure, and 63rd in the border administration section. 

"Transportation costs have often been more important than trade barriers in inhibiting trade. These costs are not simply a factor of distance, but also the quality of the infrastructure," the report says. 

Of Indonesia's 350,000 km of roads, around 6 percent (21,000 km) are damaged, the Public Works Ministry reported last month. This was an improvement from 10 percent in 2005. (mri)

IATA to buy new helicopters

Fri, 06/20/2008 10:33 AM 

JAKARTA: Publicly listed charter airline PT Indonesia Air Transport (IATA) will buy another three new helicopters worth more than US$30 million in response to higher demand from foreign companies.

"We will use external cash to finance the purchase, which will be ordered from Europe," said president director Hartono Tanoesoedibjo at a press conference Thursday. He said the firm might issue bonds or seek loans from local and foreign banks.

IATA currently operates six helicopters and 10 airplanes for its flight charter business.

It has recently secured a one-year contract charter from mining firm PT INCO worth $3.6 million to fly from Soroako, Papua to Ujung Pandang, South Sulawesi.

The company is scheduled to operate regular flights starting in the fourth quarter of this year after securing an operating license from the Transportation Ministry.

Hartono said the airline would initially serve areas mostly in eastern Indonesia, including Bali, Balikpapan and Manado. -- JP (rff)

RI to begin forest carbon projects

Adianto P. Simamora, The Jakarta Post, Jakarta | Tue, 06/17/2008 10:05 AM

Indonesia is expected to be the first nation to carry out forest carbon projects to help combat climate change thanks to a newly launched forest carbon partnership with Australia.

Under the partnership agreement, signed by the two country's leaders in Jakarta on Friday, Australia will help Indonesia develop mechanisms needed to reduce emissions from deforestation and degradation (REDD).

"With this partnership, we are upbeat and ready to carry out the first REDD demonstration activity, hopefully in August. Australia will help us implement a REDD project in Central Kalimantan forests," Soenaryo, a senior official at the Forestry Ministry, told The Jakarta Post on Saturday.

"This project is vital because the world is watching to see whether or not the REDD concept can be used as a legal mechanism to slash greenhouse gas emissions."

Germany, Britain, Japan, Spain and Norway have also submitted forest partnership proposals to conduct REDD projects with Indonesia, Soenaryo said.

"We will sign a forest partnership with the German government in the near future," he said.

The REDD concept was adopted during the UN-sponsored climate change conference in Bali last year where negotiators from 190 countries held intensive talks on cutting carbon emissions, recognized as the main contributor to global warming.

The Bali meeting required forestry countries first to perform demonstration projects and build REDD mechanisms to be examined in a Copenhagen meeting next year.

One aim of the Copenhagen conference on climate change is to determine whether the REDD concept can be adopted as one of the legal mechanisms to reduce greenhouse gas emissions when the Kyoto Protocol commitment ends in 2012.

Under the Kyoto Protocol, rich nations, except the United States, are bound to cut emissions by about 5 percent. The protocol allows only the clean development mechanism and forestation/reforestation projects as legal mechanisms for developing nations to take part in emissions cuts.

Developing nations, which are the most vulnerable to the impacts of climate change, will be able to trade their carbon with rich nations to receive financial incentives based on tons of carbon reductions.

Indonesia is the third-largest forestry country in the world, with 120 million hectares of tropical forests.

The forest carbon partnership signed by President Susilo Bambang Yudhoyono and Australian Prime Minister Kevin Rudd focuses partly on policy development and capacity building to support participation in international negotiations and future carbon markets.

Australia will help Indonesia develop a forest carbon accounting mechanism and set up a monitoring system.

"Australian experts will help Indonesians with calculating carbon emissions stocked in forests. This skill is important because it will enable us to compute the potential financial incentives through REDD projects," Soenaryo said.

He said carbon emissions from projects that avoid deforestation would be traded on a voluntary basis because there was no international legal treaty on REDD projects.

Australia will also set up monitoring stations to check forest conditions after the implementation of REDD projects, he said.

Many have expressed concerns about possible leaks in the implementation of REDD projects.

Australian former prime minister John Howard pledged a total of A$240 million last year to curb deforestation in Southeast Asia.

The fund included a promised A$30 million to plant 100 million trees in Borneo.

But Greenpeace Indonesia activist Arif Wicaksana expressed doubt the partnership could stop rapid deforestation in Indonesia.

"We want the government to take real actions to stop deforestation including imposing a forest moratorium and avoiding overlapping permits for forest use.

"The partnership gives no clear targets on how to stop deforestation," he said.

Arif urged the Australian government to also help improve the condition of Papua New Guinea's forests, which he said had been destroyed to meet high Australian demand for forest products.

He said he doubted Australia's capacity to calculate forest carbon.

"So far, there is no valid mechanism in the world on how to calculate carbon in the forests," he said.

President kicks off seven public works projects in Bali

Irawaty Wardany, The Jakarta Post, Denpasar | Mon, 06/16/2008 10:03 AM

President Susilo Bambang Yudhoyono officially inaugurated seven public works projects at a ceremony in Suwung, Denpasar, on Saturday.

The projects include beach protection systems in Nusa Dua, Sanur and Padanggaalak, a sustainable irrigation system in Buleleng and Karangasem regencies, renovation of a decentralized irrigation system in Buleleng, Karangasem and Jembrana, the Denpasar Sewerage Development Project (DSDP), a garbage sorting facility in Tukad Badung and Tukad Mati and the Lila Bhuana Sports Arena.

The projects were financed by the Indonesian and Japanese governments, along with the Bali provincial administration, at a cost of Rp 937 billion (US$100 million).

"We need to develop more infrastructure facilities throughout the country, including Bali, because the more facilities we have, the better our economic competitiveness," Yudhoyono said at the ceremony.

In attendance were the First Lady Ani Yudhoyono, Coordinating Minister for People's Welfare Aburizal Bakrie, Public Works Minister Djoko Kirmanto, Agriculture Minister Anton Apriyantono, Transportation Minister Jusman Syafii Djamal, State Minister for Cooperatives and Small and Medium Enterprises Suryadharma Ali, Japanese Ambassador to Indonesia Kojiro Shiojiri and Bali Governor Dewa Beratha.

Yudhoyono said good infrastructure was important for a world-class tourism destination such as Bali because it would raise its international profile and help attract more overseas visitors.

"We will continue our efforts to develop more facilities throughout the country, commensurate with economic growth and the state's ability to finance such projects," he said.

He said the development of a beach protection system on Bali's beaches would give added value to the island, famous for its "five S's" of sea, sand, surfing, sun and smiles.

Yudhoyono said Bali also needed an adequate sewer system to help maintain the island's reputation as "a place with a beautiful nature and a clean and healthy environment".

Public Works Minister Djoko Kirmanto said Indonesia was still burdened with a poor sanitation system.

"Most people use septic tanks to store waste, but unfortunately this can cause environmental damage because the waste is absorbed into the ground. And because the population density is constantly increasing, the accumulated waste will affect the groundwater and therefore pose health risks," he said.

He added a new waste-handling system was needed, and this was "why we built this piped liquid waste system here in Denpasar".

Djoko said the development of the DSDP was based on studies conducted between 1991 and 1992, which revealed high levels of pollution in Benoa Bay.

"Work on the DSDP began on Dec. 15, 1994, and ended this year. But this is only the first of three phases we have planned," he said.

He added the second phase would commence next year and would be completed in 2014.

Djoko said the first phase of the project -- the development of a wastewater treatment center in Suwung and the laying of 129 kilometers of pipes in Denpasar and Badung -- cost almost Rp 600 billion.

"This facility will serve up to 250,000 people in both regencies," Djoko said.