Category Archives: Energy

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. . .

Tri Mumpini Wins ‘Asia’s Nobel Prize’ for Helping Poor

Indonesian social worker Tri Mumpuni is among the winners of Asia’s prestigious Magsaysay award this year for giving green technologies to the poor, organizers said on Wednesday.

Award foundation president Carmencita Abella said Tri, along with an Indian engineer and a Philippine charity group, had helped harness the technologies to empower their countrymen and worked to create waves of progressive change across Asia.

Each year six people or organizations are named joint winners of the Magsaysay award.

This year the other winners were a man who set up an Islamic school for girls in Indonesia, a lender to India’s poorest, and a man working to restore democracy in Cambodia after the Khmer Rouge murdered his father.

“Working on critical issues ... they are showing how commitment, competence, and collaborative leadership can truly transform individual lives and galvanize community action,” Abella said.

The award, often described as Asia’s Nobel Prize, is named after a famous Philippine president who died in a 1957 plane crash.

It aims to honor people who address issues of human development in Asia with courage and creativity.

Tri Mumpuni, 46, was recognized after her IBEKA foundation built 60 small power plants harnessing the energy of water stored in dams to bring electricity to half a million people, the awards foundation said.

She was once kidnapped with her husband by former separatist rebels in Aceh province while pursuing her nongovernmental group’s project to bring electricity to rural Indonesia.

Another winner was US-trained Indian engineer Harish Hande, 44, for bringing solar lights to a country where half of all households have no electricity, the awards foundation said.

His Solar Electric Light Co.-India has tapped the sun’s energy to light up 120,000 households and is now one of the country’s largest solar technology providers.

The winners are to receive their awards in Manila on August 31.

World Bank to Lend $300 Million for Geothermal Plants

The World Bank will provide $300 million in loans to help expand the power capacity of two geothermal projects on Indonesia’s Sumatra and Sulawesi islands, the bank said in an e-mailed statement today.
The loans will be used to boost the combined capacity of geothermal projects in the provinces of South Sumatra and North Sulawesi by as much as 150 megawatts by 2015, the statement said. The bank will be working with PT Pertamina Geothermal Energy, a unit of Indonesia’s state oil company PT Pertamina, it said.

Indonesia to renegotiate oil and gas contracts

The Indonesian government is looking to renegotiate oil and gas contracts with foreign companies it believes should be paying a higher branch profit tax rate.

A number of British and Malaysian companies are paying branch profit tax rates of 10% and 12.5% respectively which were based on bilateral tax treaties between Indonesia and the companies' home countries.

However Indonesia’s Development Finance Comptroller insists the branch profit tax rate should be 20% in line with 2003 Law on Oil and Gas which was ratified in 2004, the Jakarta Post reported.

Last week Indonesia’s Corruption Eradication Commission said 14 multinational companies faced tax arrears of up to 1.6 trillion rupiah (US$187.2 million).

The Finance Ministry’s director general for taxation, Fuad Rahmany, said the tax debts were the result of disputes between the Development Finance Comptroller and the foreign companies, which he would not name.

“This is a problem of prior contracts and tax treaties that no longer comply with today's [regulations]. The finance minister has indeed ordered reviews of tax treaties with those countries,” Fuad said.

"But renegotiation won't be easy because this involves other nations. We will need diplomacy to try to tell them that their tax treaties are outdated."

Faud added the Finance Ministry would work with the Foreign Ministry to renegotiate the contracts with talks with the companies concerned expected to start by the end of the year.

It is understood the dispute mainly concerns contracts that were signed before the Oil and Gas Law took effect in 2004

Exxon Seeking Partners For Indonesian Coalbed-Methane Project

U.S. oil giant Exxon Mobil Corp. (XOM)said Tuesday it is seeking partners for a coalbed-methane project in Kalimantan, Indonesia.
ExxonMobil, the world's largest publicly traded oil company, is offering half of its working interest in three blocks where initial drilling results are encouraging, according to a document announcing the sale released by IndigoPool, Schlumberger Ltd.'s (SLB) mergers and acquisitions business.
The planned multi-well work program will be conducted over the next two years to prove commerciality and lay the groundwork for full development plans, according to the IndigoPool listing.
ExxonMobil spokesman Patrick Mcginn said the information provided by IndigoPool was accurate. He declined to offer further details.
ExxonMobil has a 49% interest in three coalbed-methane blocks--Banjar-1, Banjar-2 and Tapin--in East Kalimantan, according to the company's website. Indonesia's PT Sugico Graha has the remaining 51% interest.
Large, international energy companies are rapidly adding coalbed methane and other unconventional natural-gas resources, such as shale and tight gas, which are harder and more expensive to extract than conventional gas, because these resources usually have a longer lifespan than normal gas reservoirs.
Major oil companies are also trying to be the first to export the expertise and technology developed in recent years in North America to international markets.

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Six options for subsidized fuel consumption cut

The Energy and Mineral Resources Ministry is preparing six options for the implementation of the government`s plan to limit subsidized fuel consumption for consideration by the cabinet, an energy official said.

"We are preparing six options but we are not sure whether all of them will be taken to a cabinet meeting for discussion before they are submitted to parliament," Oil and Gas Director General Evita Legowo said here on Monday.

She was speaking on the sidelines of a working meeting with the House of Representatives (DPR)`s Commission VI on trade, industry and state-owned firm affairs.

Evita said the government was hoping it could implement its subsidized fuel consumption limitation policy this year.

"Hopefully, the policy can be implemented this year, namely after the fasting month of Ramadhan," she said.

President Susilo Bambang Yudhoyono had earlier ordered the ESDM ministry to prepare energy saving steps, including subsidized fuel consumption so that the subsidy would not drastically increase.

Evita did not elaborate on the substance of the six options her ministry was preparing for discussion at a cabinet meeting.

It was earlier learned that the subsidized fuel consumption limitation team had prepared three options, namely increasing the price of premium gasoline to Rp5,000 per liter with a cash-back for public vehicles.

The first option was predicted to be able to save Rp7.3 trillion in state money.

Under the second option, the price of premium would not be raised but private cars would be made to use pertamax, on condition that the price of pertamax would not exceed Rp8,000 per liter. This option was expected to save the state Rp5.8 trillion.

The third option consisted of two ways. First, the price of premium would be increased to Rp5,500 per liter without allotment for private vehicles. The second was that the price of premium would remain Rp4,500 per liter with allotment for public vehicles and motorcycles using a radio frequency identification (RFID) device.

Kadin Says Renewables the Key to Heading Off Energy Crisis

Jakarta Globe, FaisalMaliki Baskoro, July 15, 2011


TheIndonesian Chamber of Commerce and Industry has called on the government toshow its commitment to developing renewable energy resources throughregulations and pricing as the nation tries to reduce its reliance on fossilfuels.

Thegovernment had yet to issue any regulations to set the price of renewableenergy, which has hampered business plans for developing the resource, saidHarry Salman F. Sohar, the deputy for new and renewable energy at the chamber,also known as Kadin.

“Renewableenergy is still seen as an alternative, not a solution,” he said. “Developingrenewables is necessary, and the government needs to be more serious aboutthis.”

Theimportance of moving away from fossil fuels and natural gas for electricity generationhas been acknowledged in legislation that prioritizes shifting energy use tonew and renewable resources, including coalbed methane, nuclear, gasified coal,geothermal, solar and wind.

“There’sstill a lack of regulation that is pro-renewables, especially on the pricingmechanism,” Harry said. “Kadin will form a working committee that will provideinput to the government.”

Kadin, hesaid, will propose a feed-in tariff payment plan, which would pay those whooperate renewable electricity systems for every kilowatt hour generated basedon the cost of production by technology. That means homeowners who have solarpanels installed on their roofs would be paid for the surplus electricity thatis generated and transmitted to the power grid.

The FITscheme is already widely used in Europe, Asia and Africa.

Accordingto government data, Indonesia has up to 40 percent of the world’s geothermalreserves, with the potential to produce the equivalent of 28,000 megawatts.

Harry saidcountries had already committed to helping develop Indonesia’s renewable energypotential, including $364 million coming from the United States. Finland hasalso set aside $40 million to develop renewables in South Kalimantan and Riau,he added.

Accordingto Shinta Widjaja Kamdani, Kadin’s deputy for the environment and climatechange, the government needs to act on developing renewables because fossilfuel reserves could run out as soon as in the next 15 years, leaving thecountry with an energy crisis. “A major breakthrough needs to happen soon,” shesaid.

Indonesia’soil reserves are estimated at 4.7 billion barrels, the equivalent of 15 years’worth with average domestic consumption of 1,126 million barrels per day, shesaid, citing data from the BP Statistical Review of World Energy.

At the sametime, the use of renewable energy by way of solar, wind and biodiesel hasincreased significantly over the past four years, she said, citing theInternational Energy Agency.

Private Vehicle Premium Ban May Start in September

The government may prevent private vehicles from using Premium, the low-octane subsidized gasoline, in an effort to curb the surging costs of fuel subsidies.

Energy Ministry official Evita Legowo said on Thursday that the ban may be imposed after Idul Fitri, which comes at the end of next month. The ban was planned for last year but was delayed.

Now the government may have little choice but to introduce it after the House of Representatives Budget Committee approved a subsidized fuel quota lower than that proposed in this year’s revised budget.

This means a method of limiting subsidized fuel consumption is necessary, Evita said.

“I hope we start curbing Premium usage this year instead of next year,” she said. “The sooner the better.”

The House approved a subsidized fuel quota of 40.5 million kiloliters, less than the 42 million kiloliters proposed by the downstream oil and gas regulator, BPH Migas, which supervises subsidized fuels including Premium, diesel and kerosene.

Indonesia finds new gas, oil, and coal reserves in Sumatra

New gas, oil, and coal reserves were discovered in Indonesia's island of Sumatra, which could have significant impact in the region's development, officials said Monday.

The reserves were found in the the village of Muaro Sekalo in the district of Tebo, which is located in Sumatra's Jambi Province, district chief Majdi Muaz told Antara news agency, noting that the small village is lying on large quantities of these reserves.
Majdi said expert teams were to begin investigations in order to determine the exact amount of gas, oil, and coal reserves found in the area. However, the district chief underlined the importance for officials to find credible and trusted investors and development teams to tap the natural resources.
The Mauro Sekalo village has an economy primarily based on agriculture, but the discovery of these reserves could heavily impact the region's economic growth and social development in the upcoming future.