Category Archives: BusinessEconomy

Citi names new transaction head for Indonesia

Citi has appointed Sanjeev Jain as its new head of global transaction services (GTS) for Indonesia. Jain joined Citi in 1998 and was previously GTS regional head of public sector for Asia-Pacific, responsible for structuring solutions, deepening relationships, developing strategic partnerships with the bank’s public sector clients and driving the sales strategy for the public sector client base. He has also been regional corporate payments head and held other key roles in Citi’s cash management and trade businesses in India.

In his new role, Jain is based in Jakarta and reports to Tigor Siahaan, managing director and chief country officer for Citi in Indonesia, and Anthony Nappi, managing director and regional head of GTS for Asia-Pacific.

“Indonesia is a vital part of Citi’s franchise and global transaction services growth strategy in Asia-Pacific,” said Nappi. “Having proven his leadership capabilities both as regional head of public sector and as regional corporate payments head, I am confident Sanjeev will build on our business’s success in Indonesia and take the business to new heights.”

Indonesia awards BP new exploration contracts

The Indonesian government has awarded BP two oil and gas production sharing contracts (PSCs) for 100 percent interest in the offshore West Aru I and II PSCs in the Arafura Sea, Indonesia.

"In the past two years BP has deepened its position in Indonesia through access to four coalbed methane PSCs in Kalimantan and three conventional gas blocks in Papua," said William Lin, BP's Regional President for Asia Pacific. "These two new blocks are strong additions to this portfolio and will benefit from BP's expertise in deepwater exploration.

"We appreciate the continued support and confidence of the Government of Indonesia," he said.

The West Aru I and II PSCs are located approximately 500 kilometres southwest of the BP-operated North Arafura PSC and 200 km west of the Aru island group, in the Maluku province of Indonesia.

The West Aru I PSC covers an area of approximately 8,100 square kilometres and the West Aru II PSC covers an area of approximately 8,300 square kilometres.

The two blocks have water depths ranging between 200 metres and 2,500 metres. BP expects to commence seismic operations in these blocks in the near future.


ENI Indonesia has won two new inshore and offshore production-sharing exploration contracts in eastern Indonesia.
In Papua West Province (Eastern Indonesia), Eni won the complete contract for Arguni (5386 square km), in the onshore and offshore Bintuni basin. The block is located 10 km east of the Tangguh LNG plant. The work programme includes 2D and 3D seismic surveys and the drilling of two wells in the first three years of exploration.
In the eastern offshore of Kalimantan province, in the Kutei Basin, ENI, as part of a consortium with Niko Resources (North Ganal) Ltd, North Ganal Energy Ltd (a wholly owned subsidiary of Black Platinum Energy Ltd), Statoil Indonesia North Ganal AS and GDF SUEZ, has won the North Ganal contract block (2432 square kilometres), of which Eni will be the operator. The North Ganal Block is adjacent to the discoveries at Jangkrik and Jangkrik North East. The North Ganal agreement involves drilling a well and the performance of 200 km of 2D seismic surveys in the first three years of exploration. The Bontang LNG plant is located about 80 km west of the North Ganal area. As operator of the Muara Bakau contract, ENI presented a development plan for the Jangkrik field to the Indonesian authorities. This should be operational in 2015, thanks to a rapid development plan. GDF SUEZ is ENI's partner in the joint venture. . .

Indonesia Not in A Hurry to Join Obama’s Trans Pacific Partnership: SBY

Indonesian President Susilo Bambang Yudhoyono said Indonesia would not as yet join the Trans Pacific Partnership free trade cooperation (TPP) scheme initiated by the US.

"If I were asked about Indonesia’s position, I will say we choose not to be in a hurry to join the TPP," he said at a press conference at the end of the 19th ASEAN Summit and the 6th East Asia Summit here on Saturday.

He said the TPP issue was discussed intensively at recent world meetings such as the APEC Summit in Honolulu and the G-20 meeting in France but not at the ASEAN Summit, the ASEAN Plus Summit and the East Asia Summit here in Bali.

He stated the TPP actually was not binding on ASEAN members. "ASEAN as an entity can indeed cooperate with non-ASEAN countries in the Pacific region. But Indonesia still needs to study the TPP scheme and weigh carefully whether joining it will benefit our real sector," he said.

US President Barack Obama at the APEC Summit in Honolulu on Nov 11 formally called on countries in the region to join the TPP. The TPP was initiated by nine countries, four of which are members of ASEAN, namely Brunei Darussalam, Singapore, Malaysia and Vietnam.

President Yudhoyono said before joining any international cooperation scheme, Indonesia always must see if it would benefit trade, investment and employment. "If it has done all that and concluded it will bring benefit, we will say ’okay, we will join TPP’."

Trade Minister Gita Wirjawan had earlier also said that Indonesia would not join TPP yet because it was not yet ready and it would take time before it would do so. So far Indonesia has not yet been able to measure if the TPP would benefit Indonesia.

In principle Gita said Indonesia had already taken a stand and voiced it although the call was made by a big country. He said achieving a certain degree of competitiveness would take quite a long time because Indonesia was not like advanced countries that had started industrializing 200 years ago.

The chairman of the Indonesian Employers Association, Sofjan Wanandi, had said Indonesia still needed a ’lot of homework’ before it could decide whether or not it would join the TPP.

"We must first eliminate all of our domestic economic obstacles before we can open our market completely. If Indonesia was not yet ready for TPP, it should not join although it was proposed by the US."

Bank Indonesia Wants E-Money Watchdog

As Indonesians increasingly use their cellphones to make purchases and conduct banking transactions, Bank Indonesia is calling for regulators to monitor the industry and guard consumer safety, the central bank said on Thursday.

More mobile-phone operators, from Telkomsel to Indosat and XL Axiata, now allow users to make transactions with their phone credits.

“In theory, this trend is good for the economy,” said Ronald Waas, an accounting and payment director at the central bank. “It boosts bank transactions.”

The problem, he said, is how people tend to think about the transaction.

“I’m concerned about the way people see it,” he said. “[Phone credits] can’t replace money; there is a rigid definition of what we call money.”

“People who make payments with mobile phone credits are bartering. We have to be careful how we should regulate it.”

E-money is not a new concept in Indonesia. Since 2006, banks have offered electronic savings systems that allow customers to transfer money, shop in certain stores and pay for bills, tolls, airport taxes and even parking.

Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, Bank Negara Indonesia and Bank Mega have implemented such systems.

The number of e-money users has surged from 400,000 in 2007 to about 11.3 million in August, up 43 percent from a year earlier.

Lion air makes largest ever order from Boeing

The United States has announced a massive order for Boeing jets from Indonesia's largest domestic airline, Lion Air, to be showcased as US President Barack Obama winds up an Asia-Pacific tour.
The sale of 230 short-haul 737 jets, worth $US21.7 billion at list prices, is the largest commercial order in Boeing's history, toppling a previous record set just days ago as the industry taps in to relentless demand in emerging economies.
The order is also a boost for Boeing's efforts to develop a revamped version of its best-selling 737 to compete with a model produced by its European rival Airbus.

The deal from Lion Air, Indonesia's largest private carrier, included orders for 29 Next-Generation 737-900 extended range planes and 201 of Boeing's new 737 MAX, an updated version of its best-selling model.
The company said the 201 orders for the 737 MAX were included in previously announced commitments for 700 of the planes, which are due to enter service in 2017 equipped with fuel-efficient engines.

The Lion Air deal includes options for another 150 aircraft valued at $US14 billion, bringing the potential total value to $US35 billion, although big plane orders tend to come with significant discounts.
Boeing said the Lion Air order, when finalized, would be its largest ever "by both dollar volume and total number of airplanes."
The plane maker said strong customer demand was driving its plans to raise production over the next three years. "As a result of that increase, we will definitely be adding many more jobs," Boeing spokesman Doug Alder Jr. said without giving a specific figure.

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Tower Bersama to Buy Indosat Cell Towers

PT Tower Bersama Infrastructure, an Indonesian mobile-phone infrastructure provider, agreed to buy some cellular towers of the country’s largest wireless carrier, PT Indosat, to expand the business.
An exclusive, non-binding agreement was signed today between the two companies, Tower Bersama said in an e-mailed statement without providing details of the transaction. Jakarta- based Indosat was planning to sell about 3,000 towers in a deal that may be worth as much as $500 million, two people with knowledge of the matter told Bloomberg News earlier today.
The transaction will provide Tower Bersama additional assets to expand in Southeast Asia’s biggest economy while Indosat will get more cash that may help provide more services, said Chandra S. Pasaribu, an analyst at PT Danareksa Sekuritas in Jakarta. The tower business accounted for about 20 percent of revenue at the mobile-phone carrier in the first half, according to an April filing by Indosat.
“It should be a win-win solution for both companies,” Pasaribu said by phone from Jakarta. “Whatever the number of towers, Tower Bersama could have a portfolio that could be monetized.”
Indosat shares jumped as much as 3.9 percent to 5,300 rupiah as of 12:07 p.m. in Jakarta trading. Tower Bersama was unchanged.

President Yudhoyono meets US business leaders

Indonesian President Susilo Bambang Yudhoyono received eight US top businessmen at a breakfast meeting at Hotel Sheraton Waikiki, Honolulu, Hawaii, Sunday morning local time or Monday morning West Indonesia Time.

The meeting which was closed to the media was attended by among others Freeport McMoran president and CEO Richard Adkerson, Caterpillar Group President Richard Lavin, Emery Konig from Cargill, Deb Henretta from Procter & Gamble, Peter Eggleston from Chevron, President of National Center for APEC Monica Whaley, President & CEO of Underwriters Laboratories Inc. Keith Williams, and Sehat Soehardjo and Wili Dai from Marvell Technology Group Ltd.

President Yudhoyono at the meeting was accompanied by coordinating minister for economic affairs Hatta Radjasa, trade minister Gita Wirjawan, industry minister MS Hidayat and Indonesian ambassador to the US, Dino Patti Djalal.

According to Dino President Yudhoyono and the business leaders only held short talks and listened to some of their plans to continue to do business and conduct new investment in the country.

Among the companies that have expressed their interest to invest in Indonesia but not yet unveiled their detailed plan are Cargill and Caterpillar.

"The others only said that they were postiive towards Indonesia," Dino said.

He said the US business leaders at the meeting expressed their optimism towards the development of business conditions in Indonesia.

"The talks just now were very short. They just expressed their optimism (towards Indonesia)," he said.

After the meeting President Yudhoyono then left for Ihilani Ko Olina Resort to attend the second day of the summit.

At the second day of the meeting the leaders would discuss a declaration to be adopted by 21 APEC member countries.

In his speech before the discussion US President Barack Obama as the host expressed his satisfaction over the progress achieved at the meeting to strengthen regional economic integrity, promote environment-based green economic growth and convergence of regulations in economic cooperation.

Garuda inks deals worth $990m with CFM

Flag carrier Garuda Indonesia and CFM International, an engine supplier and aircraft maintenance provider, inked US$990 million in deals on Sunday to supply the airline with two jet engines and for maintenance work, the airline said in a statement.

Garuda said on Monday that the engines would support the airline’s low-budget airline subsidiary, Citilink, from 2014 to 2018, while the maintenance contract would cover the airline’s Boeing 737-800 NG for up to 15 years.

Garuda president director Emirsyah Satar said the deal was part of the airline’s long-term effort to revitalize its fleet through quality maintenance and efficient operation.

ASEAN+3 to be major channel for East Asia integration: Chinese ambassador

ASEAN Plus China, Japan and Republic of Korea (ROK) (ASEAN+3) should be the major channel for East Asia integration amid the fragile world economic situation, Chinese ambassador to Indonesia Zhang Qiyue said on Monday.
ASEAN+3 share extensive common interests in East Asia integration process and fortifying its major channel status will be conducive to the stability and growth of East Asia, as well as the world, Zhang said in an exclusive written interview with Xinhua.
In recent years, both sides have made great progress in promoting regional integration, as evidenced by deepened cooperation in finance, East Asia free trade zone and food security, she said.
On finance sector, the Chiang Mai Initiative Multilateralization, a 120-billion-U.S. dollar regional reserve pool to provide emergency liquidity for countries and regions in financial crisis, came into effect in 2010. ASEAN+3 have also set up a macroeconomy research office this year, so they will better monitor regional macroeconomy and ensure the effective implementation of the multilateral currency swap, she said.
On trade, the free trade zones between ASEAN and China, Japan, ROK respectively have boosted the trade and investment growth in the region and two feasibility studies have been finished on establishing the East Asia free trade zone, Zhang said.
The 13 countries (all the ten ASEAN countries and China, Japan, ROK) signed an emergency rice reserve agreement in October, aiming to provide 787,000 tons of rice stock to mitigate the implications of natural disasters on food supply and production. A total of 87, 000 tons will be provided by the ASEAN countries while China, Japan and South Korea will prepare 300,000 tons, 250,000 tons and 150,000 tons respectively.
"The rice reserve is a major step in institutionalizing their food security partnership, helping the East Asian countries to better tackle natural disasters, balance supply and demand as well as strengthening information exchanges," Zhang said.