Wednesday, May 18, 2016

Wintermar Eyes Brunei Expansion Amid Sluggish Oil and Gas Sector

Jakarta. Wintermar Offshore Marine, an Indonesian offshore marine services company, has established a new subsidiary in Brunei Darussalam, which started operating this year in a bid to improve the company's performance amidst depressed oil prices.

This newly established company has secured a five-year contract with oil and gas company Brunei Shell. Wintermar is allocating $5.5 million for the unit's operations this year.

The company has been aggressive in the expansion of its overseas operations, pinning its hopes on securing 80 percent of a $168 million contract target for this year from abroad.
Other than Brunei Darussalam, Wintermar currently operates two vessels involved in mid-term contracts in India; another two in Myanmar's spot market; and one in Vietnam.

Wintermar also allocated a separate $6 million in capital expenditure this year, which will include the purchase of a high-tier vessel worth $4.2 million.

The company's existing 74 high-tier vessels have been operating in Australia, Brunei Darussalam, Russia and Myanmar, Wintermar managing director Sugiman Layanto said on Monday (09/05).

The company saw its fleet utilization decrease to 61 percent in the January-March period from 70 percent in the same period last year due to low activity in the oil and gas industry, Wintermar spokeswoman Pek Swan Layanto said.

In line with that, Wintermar's revenue was down 39 percent to $29.25 million and the company suffered a $1.4 million net loss in the first three months.
Wintermar is currently looking at opportunities in the Southeast Asia region to improve its vessel utilization rate, she said.

Jakarta Globe

Government Earmarks Rp 5 Trillion for Eastern Indonesia Electricity Project

Jakarta. The Indonesian government has set aside Rp 5 trillion ($375 million) for Indonesia Terang (Bright Indonesia), a project aimed at improving access to electricity in the eastern islands of Indonesia.

The project will provide electricity for 10,300 villages in six eastern provinces—Papua, North Papua, Maluku, North Maluku, East Nusa Tenggara and West Nusa Tenggara—by 2019.

“Indonesia Terang will focus on three projects. First, we need to expand the existing electricity network to the villages—we have an annual budget of Rp 3 trillion to do that,” said Jarman, the Director General of Electricity at the Ministry of Energy and Mineral Resources, in a statement on Thursday (12/05).

The next project, Jarman said, is to use new and renewable energy sources to generate electricity for the villages, especially water and wind energy, which is readily available in the eastern islands.

For that, the government has earmarked an annual budget of Rp 1.5-2 trillion until 2019. Rp 2 trillion has already been made available for 2016.

The last project is increasing the use of home solar electric system so electricity is always available even in the remotest parts of Eastern Indonesia.

“We're optimistic 97.3 percent of all villages [in East Indonesia] will have electricity soon,” Jarman said.

According to state utility company PLN, many homes in major cities in Eastern Indonesia, such as Ternate, Palu, Ambon and Jayapura, still lack electricity.

    Jakarta Globe

Saturday, April 23, 2016

Pertamina Joins Medco Power in Pursuits for Chevron's Geothermal Assets

Jakarta. State energy company Pertamina has stated its interest in taking over geothermal assets on the pipeline to be sold by multinational oil giant Chevron.

Two Chevron subsidiaries now own and operate geothermal projects in Salak and Darajat fields — two geothermal working areas in West Java in which Pertamina also has a minority interest — with a capacity to generate 647 megawatts of power.

"We are interested in the projects. But, we still need to discuss it further," said Syamsu Alam, the upstream director at Pertamina on Monday (18/04).

Pertamina would compete with Medco Power Indonesia — controlled by Saratoga Capital and Medco Energi Indonesia, the country largest listed oil company — that is also is eager to buy the assets.

Chevron, like other global oil firms, are selling assets, cutting jobs and slashing capital spending globally to maintain profitability.
"Amid current weak global oil price, they have to restructure their business," said Rida Mulyana, the director general of new and renewable energy at the Energy and Mineral Resources Ministry.

Rida said that under current rule, Pertamina does not have any preferential right to purchase the projects from Chevron.

"Pertamina can always ask Chevron not to sell them to others, but in the end it would come down to the economics," he said.

Jakarta Globe

Two Indonesian Coal Ports Halt Shipping to Philippines on Hijack Fears

Jakarta. Authorities from at least two Indonesian coal ports have stopped allowing vessels to leave for the Philippines due to security concerns following a spate of ship hijackings in the southern Philippines, a government official said on Wednesday (20/04).

Departure permits for the Philippines were no longer available for shipping vessels at the Port of Banjarmasin in South Kalimantan and Tarakan in North Kalimantan, said Indonesia's acting director general of sea transportation Umar Aris.

"The situation in the Philippines is considered not safe and some of our ships were hijacked," Aris told Reuters.

"Tomorrow, I'll have a meeting with the Navy and State Intelligence Agency to further discuss the matter. We're trying to find the best solution."

A combined 18 crew from Indonesia and Malaysia have been taken captive in three separate attacks on tugboats in Philippine waters close to maritime borders with the two countries.


Wednesday, March 30, 2016

Govt Set to Revise Mine-Mouth Power Plant Pricing Scheme

Jakarta. The Ministry of Energy and Mineral Resources is considering a revision of the margin at which mine-mouth coal-fired power plants sell their electricity to Perusahaan Listrik Negara, arguing that the current margin hampers the state utility's ability to cut prices further.

Under the current scheme, coal miners own the power plants and sell the power to PLN at 25 percent higher than production costs. However, the state utility says lower coal prices, which are supposed to benefit its customers, have not been reflected in the scheme's pricing.

"We are now formulating a new, more flexible pricing scheme," Bambang Gatot, director general of minerals and coal at the energy ministry, said on Monday (28/03).

Bambang said the government would impose a floor and ceiling on miners' profit margins, in accordance with the agreement between the coal miners and PLN. However, the government has yet to determine what those levels will be, he added.

Ministry data shows that Indonesia's benchmark coal price has dropped 3.5 percent so far this year, following a 17 percent decline in 2015, as weak demand from China continues.

Mine-mouth power plants still account for just a fraction of PLN's total power capacity. Miners, such as state-controlled Tambang Batu Bara Bukit Asam, are keen to develop this type of power plant, as they can earn from their product than by shipping it in bulk.

Jakarta Globe

Ratchaburi Electricity to Bid for $350n Indonesian Power Plant Project

Bangkok. Ratchaburi Electricity Generating Holding, Thailand’s largest private power producer, is teaming up with Indonesian firm Medco Power to bid to build a $350 million power plant in Indonesia, a company executive said on Thursday.

Facing limited growth at home, the utility is seeking to expand abroad as it aims to boost power generation capacity to nearly 10,000 megawatts by 2023 from just under 7,000 MW now.

As well as Indonesia, it is looking to invest in Vietnam, the Philippines, Australia and Laos, Chief Business Development Officer Paskorn Dangsamakr told reporters on Thursday.
The utility expects to submit a bid with Medco in June for the 250 MW gas-fired plant in the Riau Islands and start building within a year if it wins, Paskorn said. Medco would take a 51 percent stake and Ratchaburi 49 percent, he said.

Ratchaburi is also keen to bid for a 800-MW gas-fired plant in Java, Paskorn said.

The utility is also considering buying a 30-40 percent stake in coal-fired power plant from GN Power in the Philippines, he said.

In January Ratchaburi bought a 10 percent stake in a nuclear power plant in China, where it will partner China General Nuclear Power Group (CGN) and Guangxi Investment Group Co to build and operate a second plant in Fangchenggang, in Guangxi province.

Ratchaburi has no plans for now to build a nuclear power plant in Thailand, but the Chinese deal would leave it better placed should the government decide to include nuclear in the energy mix, Chief Executive Rum Herabat said.

The project would give Ratchaburi access to technology, experience in the construction and commissioning of a nuclear plant, and training for personnel, he said.

The 7.5 billion baht ($212.28 million) investment would also provide a “double-digit” return on investment, he said.

Thailand has considered atomic energy in its long-term plans but there is strong political opposition and the government put off plans to build a reactor by 2020 following the Fukushima disaster in Japan in 2011.

However, a government power development plan issued in late 2015 envisages two 1,000 MW nuclear power plants being built for start-up in 2035 and 2036.


Monday, March 21, 2016

Indonesia's Pertamina Looks to India to Process Iraqi Crude

Jakarta. Indonesian state-owned energy company Pertamina hopes to seal a deal this year with an Indian refiner to process around 1 million barrels of Iraqi crude oil each month, its chief executive said.

"It is better if we purchase the crude and then utilize a refinery overseas," Pertamina CEO Dwi Soetjipto told reporters late on Monday.

"Why India? Because its geographic location is good," he said. Any crude shipments from Iraq would pass several Indian oil ports on the way to Indonesia.
Soetjipto declined to say which Indian refiner Pertamina was talking to on the oil processing 

Pertamina's monthly Iraqi oil shipments to the Indian refiner would consist of 290,000 barrels from a stake in the West Qurna block and another 700,000 barrels it would purchase from other Iraqi oilfields, he said.

Pertamina has about 1 million barrels per day (bpd) of domestic refining capacity, which meets only about two-thirds of Indonesia's daily oil consumption.