[Kabar-Irian] Irian News - 12/15/05
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The Jakarta Post.com
National News
December 15, 2005
More food aid reaches remote Yahukimo villages in Papua
Nethy Dharma Somba, The Jakarta Post, Yahukimo
More helicopters have been sent to drop emergency food aid in outlying
villages of the famine-stricken Papua regency of Yahukimo.
The government turned to helicopters to quickly reach the remote areas,
which are not accessible to planes due to the absence of an airport.
An Army chopper, piloted by Capt. Agus Yogi, flew to Biagema and Hilipuk
villages to drop 10 kilograms of rice, 10 boxes of instant noodles, three
boxes of baby food, two boxes of biscuits, 15 blankets, 150 sarongs and a
pack of cassava, the staple food of the locals.
Located some 45 minutes flight from Wamena, Biagema is situated in the
middle of steep hills. The village can also be reached by river.
Only seasoned pilots are able to fly helicopters through a tunnel-like
passage between the hills to reach the village.
Dozens of boys emerged from the trees as the chopper touched down. The
helicopter, however, was on the ground for just five minutes to unload the
humanitarian aid before it flew to the other village.
"If we stay longer, we couldn't make it back (to Wamena). The weather
changes very quickly, and we may be trapped here if the clouds come," Agus
told The Jakarta Post.
It took the helicopter 15 minutes to arrive in Dekai, the capital of
Yahukimo, to drop off emergency food aid for residents in Hilipuk village.
The helicopter dropped 10 sacks of rice and 20 boxes of instant noodles in
Hilipuk.
"We distribute food aid to villages that can't be accessed even by small
planes like a Cessna," said Jayawijaya military commander Lt. Col.
Sarjono.
Upon hearing the helicopter roaring in, Hilipuk residents came out of
their traditional houses called honai to collect the food. The stop-over
lasted only five minutes.
The residents looked very happy when they picked up the aid packages.
"Thank you, don't forget to send more aid," a resident told a chopper crew
member.
There is no road connecting Biagema and Hilipuk villages with the outer
world. People have several hills and valleys to walk through to reach the
nearest airport in Dekai.
Green fields mixed with barren land were spotted near the villages.
Sarjono said residents of the village would suffer from starvation if they
experienced a crop failure due to their isolation.
"Those who live near the airport can easily get food from the city, but
people living at the foot of the mountains will face difficulties in
securing it," Sarjono said.
The failure to harvest sweet potatoes has been blamed for the famine in
the regency, which is home to 55,000 people. As many as 55 people have
died of malnutrition.
However, the government has repeatedly denied reports of starvation.
The Yahukimo relief aid task force said those who wish to donate money to
help the regency's people should inquire with Bank Mandiri or Bank Rakyat
Indonesia.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Paras Indonesia (formerly Laksamana)
Home : Off The Blog
Bakrie Says Food Shortage Not A Famine
Posted by: Roy Tupai on 12, 15 2005 @ 11:08 pm
Despite suffering from the flu, Coordinating Minister for People's Welfare
Aburizal Bakrie was healthy enough to join a recent flight carrying
emergency food and medical supplies to Papua province’s Yahukimo regency,
where a food shortage has reportedly killed 55 people.
At a press conference in Jakarta on Thursday (15/12/05), Bakrie denied the
food shortage could be categorized as a famine, saying that locals were
suffering only from a lack of sweet potato tubers – their main staple food
– whereas other food sources were still plentiful.
“Crops of cabbages, bananas and corn continue to grow well there.
Livestock, such as fat pigs, are also in a very healthy situation. But the
staple food of sweet potatoes is not there,” he was quoted as saying by
detikcom online news portal.
He said his visit to three areas of Yahukimo – Yakemei, Domoi and Karupon
– had revealed three main causes of the sweet potato shortage.
First, high rainfall over recent months had caused crops of sweet potatoes
to rot and locals had not stored any reserve supplies of the tubers.
Second, locals had enjoyed an abundance of wild forest coconuts this year
and therefore started substituting them for their main food source.
Although the season for wild coconuts is very short, locals had neglected
to plant their usually sufficient crops of sweet potatoes.
Third, the regency had been busy with local elections earlier this year,
with the regent and other representatives winning office only a few months
ago, so they had been unable to quickly respond to the food shortage by
improving government infrastructure.
Bakrie said the government’s short-term solution to preventing further
food shortages would be to continue providing food and medical supplies
for the next four months. He said “rice barns” would be established in 10
local areas, while an SSB (Single Side Band) radio communication network
would be extended from 35 villages to 56 villages.
In the longer term, he added, the government would send agronomists to the
regency for three years to train locals in modern methods of efficient
farming and crop planning. He also said the state budget for 2006 or 2007
would include an allocation to build roads to connect Yahukimo to other
areas. The regency is currently accessible only by helicopter and small
planes.
Bakrie said he could not confirm the reported death toll of 55 people. The
figure was first released by missionaries and initially confirmed by local
officials, before later being denied by some higher ranking officials.
The minister said many locals led an unhealthy lifestyle, living under the
same roofs as their livestock, such as pigs, as a matter of pride. "This
habit will be difficult to be eliminated, precisely because of their
pride," he said.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Paras Indonesia (formerly Laksamana)
December, 15 2005 @ 09:17 pm
Hungry For A Fight
By: Roy Tupai |
Staff of Papua Governor Jacobus Perviddya Solossa assaulted a television
news reporter after he questioned the governor about his failure to detect
and prevent a food shortage that killed at least 55 people. Ironically,
the journalist could now face criminal charges on the grounds of publicly
defaming the governor.
The violence occurred on the afternoon of December 10 at Sentani Airport,
outside the provincial capital Jayapura, after Metro TV reporter Muhammad
Imran and other journalists interviewed the governor about the food
shortage in Yahukimo regency.
Metro TV said Imran was approached by “several of the governor's staff”,
who proceeded to punch his face. The attack was reported to local police,
who took Imran in for questioning and later said he could be charged with
defamation.
A few hours later, Solossa apologized for the attack, claiming he was not
present when it occurred. In a telephone interview with Metro TV's news
anchor Meutya Hafid, he expressed regret over the incident and said it
would be resolved in line with prevailing laws.
A report attributed to state news agency Antara and the Media Indonesia
daily said Solossa’s head of protocol, Elly F. Aury, attacked Imran
because he felt the journalist’s attitude was unethical and insulting. The
report said Imran had pointed at the governor’s face while asking him
several questions, and then turned his back on the governor and moved
about when answering a call on his cellular phone.
Aury defended his violent action. "I was not acquainted with the Metro TV
reporter, but I was annoyed by his impoliteness and unethical behavior
toward an official of the state, so I did what I did,” he said.
Separately, Jayapura Police chief Jacob Kalembang said the reporter could
be charged under Article 315 of the Criminal Code (KUHP) concerning public
defamation.
The article carries a maximum jail sentence of four months and two weeks,
and a maximum fine of Rp4,500. Kalembang said he hoped the case would soon
be dealt with by the local public prosecutor’s office.
Deputy chairman of the Papua chapter of the Indonesian Journalists’
Association (PWI), Frans Ohoiwutun, showed little sympathy for Imran,
saying he could have avoided being assaulted if he had followed the
Journalistic Code of Ethics when interviewing a state official.
"Sometimes know-it-all reporters behave with an arrogant attitude that
makes the interviewee emotional. This case is a lesson for both novice and
senior reporters in conducting their task of journalism,” he said after a
meeting with Solossa on December 12.
He said Solossa felt the incident would not have happened if each side had
exercised self-control, because the press is the government’s partner in
promoting national development. It was unclear whether he meant
journalists could help to promote national development by not asking
government officials tough questions about their failure to protect their
constituents from food shortages.
The Antara/Media Indonesia report said the case was considered closed
because Solossa had visited Imran a day after the attack and apologized.
Ohoiwutun said Solossa had also apologized to the national media. “The
governor sends his sincerest apology to all elements of the good press,
print and local electronic media and national broadcasters."
“The governor will write a formal apology to the management of Metro TV’s
editorial staff in Jakarta about this case," he added.
Solossa could do a lot more by firing his brutal head of protocol. Metro
TV seems to be unwilling to file charges against the governor’s staff.
Possibly because the network’s owner Surya Paloh is head of the advisory
board of Golkar Party, which supports Solossa’s governorship.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Radio New Zealand International
Vanuatu PM concerned at wording of motion in support of Papuan self
determination
Posted at 3:14pm on 15 Dec 2005
Vanuatu's Prime Minister Ham Lini says he's unhappy with the wording of
the country's first ever motion in support of Papuan self determination,
to be debated in parliament today.
The motion, tabled by the leader of the opposition Serge Vohor earlier
this week, is to request Vanuatu's parliament to facilitate the process of
independence for the Indonesian province.
In the proposed motion, parliamentarians will call on the government to
sponsor the Papuan issue before the United Nations.
But Mr Lini, who has been a strong advocate of Papua's independence
struggle, says the government has not committed to supporting the motion.
"Government's not really happy about the motion, how it was put in place.
We believe maybe the wording of this motion should be amended. I believe
maybe that should be done sometime today or maybe during the motion."
Ham Lini
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Radio New Zealand International
Vanuatu: Government To Vote Against Papua Motion
Thursday: December 15, 2005
Vanuatu’s Prime Minister Ham Lini says his government will vote against
the West Papua motion when it is debated in parliament.
The motion, tabled by the leader of the opposition Serge Vohor earlier
this week, requests the Vanuatu parliament to facilitate the process of
independence for the Indonesian province.
In the proposed motion, parliamentarians will call on the government to
sponsor the Papuan issue before the United Nations.
But Mr Lini, who has been a strong advocate of Papua’s struggle for
self-determination, says the government is concerned with the wording of
the motion.
He said Papuan representatives in Vanuatu have made the matter an NGO
issue, which has undermined the country’s sovereignty.
Mr Lini said the government has agreed in principle with the motion and
would like to defer it to parliament sittings in February.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Jakarta Post.com
Opinion
December 15, 2005
Indonesia and the United States: A re-energized relationship
S.P. Seth, Sydney
What has impressed the United States most about Indonesia, leading to the
lifting of the ban on military ties, is the unwavering commitment of the
Susilo Bambang Yudhoyono government to fight terrorism. The killing of
Azahari Husin, the mastermind of the Bali and other terrorist bombings in
Indonesia, was its most concrete and dramatic proof. Noordin Mohammed Top,
who is believed to be the top recruiter for potential suicide bombers,
might not be able to escape the police dragnet for long.
The Susilo government is engaged in a multi-pronged attack on terrorism.
It has decided to involve the military in combating terrorism by
activating "the territorial command to the village level..." Its advantage
is its vast reach in terms of information and intelligence gathering, thus
shrinking the space for terrorists to mingle and hide among the people.
Its drawback is that it would have the potential, over a period of time,
to degenerate into political witch-hunting and creating a general climate
of fear.
On the question of terrorism, though, an encouraging development is the
government's decision to co-opt the country's Muslim clerics into fighting
terrorism by stripping it of its misplaced religious authority. A task
force of prominent clerics, including leaders of Nahdlatul Ulama and
Muhammadiyah, two mass organizations with an estimated 70 million members,
will undertake to confront terrorism ideologically, including looking into
the teaching curriculum of Islamic schools (pesantrens) prone to radical
views. As Ma'ruf Amin, the head of the team, has said, "We will clarify
these ideas with pesantrens, especially those alleged to have indications
of influences from radical terror views."
As Erwin Mappaseng, a senior retired police officer, has rightly pointed
out, "It is difficult for police to catch terrorists here because a lot of
people are sympathetic to them; some people even see them as heroes. So
this is the job of our leaders, of our Muslim scholars and imams to
explain to them the true teaching of Islam. We have to take a
comprehensive approach."
Talking of a comprehensive approach, another important task for the
clerics might as well be to confront communal violence plaguing parts of
Indonesia. The recent example of it is the gruesome beheadings of some
young girls, apparently because of their religion. A lot more people have
died in communal violence in Indonesia from 1999-2000 than in terrorist
attacks, both horrible crimes. It should rouse the collective conscience
of the nation and a concerted effort at all levels to deal with it
effectively.
Even in terms of fighting terrorism, it makes sense to deal simultaneously
with communal hatred and violence because, in some ways, it is the nursery
of the terrorist ideology of pitting one religion and culture against
another.
There are many reasons contributing to terrorism. An underlying factor in
all is a sense of helplessness and marginalization-of not making much
headway in pursuit of life. When a large number of people suffer from this
sort of social disconnection, mostly due to poverty and unemployment, they
become easy target for extremist message.
Only a tiny minority, though, will take to terrorism (which is enough to
create chaos and mayhem), but many more might become sympathetic
bystanders simply because they feel a sense of bizarre elation in their
otherwise hopeless existence.
Therefore, a comprehensive approach to terrorism would need, at some
point, to create a sense of hope among the mass of its people. As a start,
for instance, Indonesia can launch some employment generating
infrastructure projects with helpful assistance from the United States and
other rich countries and global financial institutions. It will not just
be a token exercise because, as part of Indonesia's future economic
growth, an updated and expanded infrastructure base is an essential
pre-requisite.
Another worthy cause will be community development programs in rural areas
to help farmers with new techniques and materials to enrich farming. India
did it on a large scale, starting in the fifties. Though it was at times
bogged down in bureaucratic bungling and corruption, but it did produce
some remarkable results. The point is to create new areas of economic
activity to energize the nation, so that terrorism doesn't look like
occupying disproportionate attention.
Returning now to the lifting of the ban on military ties by the United
States: This is a new development with important implications over time
for Indonesia's foreign and security policies. As of today, the primary
U.S. objective is to enlist Indonesia, which has the largest Muslim
population in the world, in its fight against terrorism. But it would, in
time, have other strategic objectives; chief among them to contain China's
expanding regional profile and role.
As South East Asia's largest nation, Indonesia is an important regional
country. This gives it added weight in regional organizations like the
Association of South East Asian Nations (ASEAN), Asia Pacific Economic
Conference (APEC) and the upcoming East Asia community (an East Asia
Summit is scheduled this month in Kuala Lumpur).
Indonesia will, therefore, figure importantly in the emerging regional
power games between China and Japan, and between the United States (with
Japan as its ally) and China. According to Sean McCormack, a U.S.
spokesman, "The Administration considers the relationship between the
United States and Indonesia, the world's third-largest democracy, to be of
the utmost importance."
The U.S. will have other expectations from Indonesia, beyond just
combating terrorism, in due course of time. How will Indonesia balance its
steadily growing relationship with China and its re-energized ties with
the United States, would remain to be seen?
-- The writer is a freelance writer based in Sidney and can be reached at
SushilPSeth@aol.com.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CounterPunch.com
December 15, 2005
Waivers for State Terror
-- Bush and the Indonesian Generals
By Ben Terrall
As the U.S. empire continues its so-called "war on terror" via blank
checks for the military-industrial complex, the Bush Administration
recently overrode a congressional ban on military aid to Indonesia and
restored all such assistance by exploiting a "national security waiver."
Under intense U.S.grassroots pressure, the Clinton administration
suspended all assistance after the September 1999 Indonesian military
destruction of East Timor, and Congress subsequently legislated continuing
limits on aid. On November 22 of this year, the State Department
announced, "it is in the national security interests of the United States
to waive conditionality pertaining to Foreign Military Financing (FMF) and
defense exports to Indonesia." Senator Patrick Leahy, author of the
Congressional restrictions this maneuver overrode, called the move "an
abuse of discretion and an affront to the CongressTo waive on national
security grounds a law that seeks justice for crimes against humanity
without even obtaining the Indonesian government's assurance that it will
address these concerns makes a mockery of the process and sends a
terrible message."
Joseph Nevins's A Not-So-Distant Horror: Mass Violence in East Timor
(Cornell, 2005) is essential for understanding the broader context of
Washington's latest support for Jakarta's military. The book provides a
thorough overview of "international community" backing for the 24 year
Indonesian military occupation of East Timor, and shows the blatant power
calculations that went into the sell-out of the East Timorese. As Nevins
quotes then-U.S. Ambassador to Indonesia Stapleton Roy saying in 1999,
"Indonesia matters and East Timor doesn't."
Nevins methodically shows the double standards implicit in the relative
importance accorded "ground zero" in the U.S. (New York City on 9/11/2001)
and the scorched-earth "ground zero" the Indonesian military left in its
wake when departing East Timor in September 1999. Though we see or hear
admonitions to "never forget" September 11 virtually on a daily basis, few
in the U.S. are aware that a military armed and trained by our government
destroyed 80% of East Timor's infrastructure only two years earlier. In
the midst of that destruction, the military and its militia proxies killed
some 1500 civilians.
Even that abhorrent body count is dwarfed by the many tens of thousands
killed, often with U.S.-supplied weapons, in the previous two decades of
Indonesian military terror largely ignored by mainstream coverage of the
1999 carnage. Nevins writes of the corporate media's disinterest in East
Timor, "This silence, or 'forgetting' is a crime of omission of sorts as
it facilitates impunity. It also helps to perpetuate myths about the
supposed dedication to human rights and principles of international law
among the powerful."
Nevins, a Vassar College professor who spent many months in occupied East
Timor throughout the 1990s, shows how both powerful Democrats and
Republicans share responsibility for keeping the occupation's ugly history
out of the public eye. Nevins cites one especially galling example of this
bipartisan collusion, a 2000 speech in which Richard Holbrooke, former
Clinton Administration ambassador to the UN and Assistant Secretary of
State for East Asian and Pacific Affairs under Jimmy Carter, heaped
fulsome praise on Iraq invasion cheerleader Paul Wolfowitz, calling the
Reagan-era ambassador to Indonesia "a continuing participant in the effort
to find the right policy for one of the most important countries in the
world, Indonesia." Holbrooke went on to explain that Wolfowitz's
"activities illustrate something that's very important about American
foreign policy in an election year and that is the degree to which there
are still common themes between the parties. East Timor is a good example.
Paul and I have been in frequent touch to make sure that we keep it out of
the presidential campaign, where it would do no good to American or
Indonesian interests."
Washington and other governments have consistently blocked efforts by
activists in East Timor, Indonesia and the U.S. to achieve justice with
real reckoning for the crimes of 1974-1999.
Sadly, opposition to those efforts has also come from East Timor's
president, the former guerrilla leader Xanana Gusmao. Gusmao recently
downplayed the findings of his country's truth commission, the Commission
for Reception, Truth and Reconciliation in East Timor (known by its
Portuguese initials, CAVR) and its recommendations for justice and
reconciliation. These include reparations to victims from countries --
including the U.S. -- which backed the occupation, and from corporations
which sold weapons to Indonesia during that period.
John M. Miller, the National Coordinator of the East Timor and Indonesia
Action Network (ETAN) described the CAVR report as "the product of three
years of extensive research by dozens of East Timorese and international
experts." Miller added, "Its completion is especially timely, given the
Bush administration's recent decision to ignore the criminal record of
many high-ranking Indonesian military officers."
Miller further noted, "Since Timor's independence referendum in September
1999, Washington has provided monetary and other assistance to East
Timor's reconstruction and development, but such aid does not even begin
to compensate the East Timorese people for the suffering caused by 24
years of U.S. support for Indonesian military occupation. Along with the
CAVR, we agree that the U.S. owes East Timor reparations."
Despite East Timorese and Indonesian calls to publicly release the CAVR
report, Gusmao has thus far failed to do so.
East Timorese parliamentarian Leandro Isaacs, who has campaigned for an
international tribunal on Indonesian military crimes committed in East
Timor, told Australian journalist John Martinkus, "It's not just people
from Kosovo, I'm sorry to say it, who have a right to justice because they
are white. It's not just Yugoslavs who have rights. We here also have the
same level of humanity as the rest of the world. "
The truth commission's findings follow a May 2005 UN Commission of Experts
report on human rights violations in East Timor in 1999. That report
concluded, "The Commission wishes to emphasize the extreme cruelty with
which these acts were committed, and that the aftermath of these events
still burdens the Timorese society. The situation calls not only for
sympathy and reparations, but also for justiceWhile recognizing the virtue
of forgiveness and that it may be justified in individual cases,
forgiveness without justice for the untold privation and suffering
inflicted would be an act of weakness rather than of strength." The UN
Security Council is awaiting the Secretary General's recommendations in
response to that report.
The Washington-based National Security Archive's Indonesia and East Timor
Documentation Project assisted the CAVR in obtaining U.S. documents via
Freedom of Information Act requests. According to the Documentation
Project's director, Brad Simpson, these documents showed that "Indonesia's
invasion and occupation of East Timor and the resulting crimes against
humanity occurred in an international context in which the support of
powerful nations, especially the United States, was indispensable."
They also provide further backing for Nevins's argument about the
bipartisan nature of U.S. support for the Indonesian military occupation
of East Timor. The documents show that in 1977, Zbigniew Brzezinski and
other Carter Administration officials blocked declassification of the
explosive cable transcribing President Ford's and Secretary of State
Kissinger's December 6, 1975 meeting with Indonesian dictator Suharto. In
that exchange, Ford and Kissinger explicitly approved the invasion of East
Timor. Also newly-released was a 1978 message Vice President Walter
Mondale wrote President Carter to request accelerated approval for the
sale of sixteen A-4 fighter jets to Jakarta. On May 9, as Mondale arrived
in Indonesia, Carter approved the sale but sought clarification "on the
circumstances in which they envision the planes will be used, in
particular in East Timor." The extent of the Carter Administration's
concern for the East Timorese can be gauged by a telegram in which Mondale
reassures Suharto of their two nations' "mutual concerns regarding East
Timor," in particular, "how to handle public relations aspects of the
problem."
As Dan Lev, Indonesia specialist at the University of Washington, said in
a recent interview with Indonesia Alert [www.indonesiaalert.org], "people
in the Department of Defense in the United States are constantly arguing
that the thousands of Indonesian officers who they train are advantaged by
that training. But there's no evidence of that! And the places where they
have trained don't have to do with human rights. They have to do with
crushing people, actually. And they have to do with intelligence services
and the like."
Lev added, "The United States, the major country in the world, sees the
Indonesian army as an ally, and very useful to America. And that's what
helped the army become more engaged in the first place, in 1957, 1958,
when the United States spotted the army as the principal means for getting
rid of the communist party, at that point the third largest communist
party in the world [in] 1965, it's true that the American government of
the time was deeply grateful to the Indonesian army for carrying out and
implementing in a sense one of the worst massacres of the last century
Then the issue was communism, now the issue is terrorism."
But, as Karen Orenstein, ETAN's National Coordinator, told me, "Given the
lack of oversight or serious reform, the armed forces of the archipelago
remain by far the most significant purveyor of terror for the people who
live there. "
-- Ben Terrall is a writer and activist in Oakland. He can be reached at:
bterrall@igc.org
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
AFX News Limited
Indonesia, Russia mull satellite launch from island near Papua
12.14.2005, 11:14 PM
Jakarta (AFX) - Indonesia and Russia are considering using an island off
Indonesia's Papua province as a launching base for a Russian
communications satellite, an Indonesian official said.
'Indonesia and Russia are discussing the use of Biak as a satellite
launching base,' Indonesian presidential spokesman Dino Patti Djalal told
Agence France-Presse by telephone from Kuala Lumpur.
Djalal declined to confirm a report in the Koran Tempo newspaper, which
said technical details of the launch would be discussed by officials from
both countries in January and that it could take place in 2007.
Hazairin Pohan, director for East and Central European Affairs at the
Indonesian foreign ministry, said the base in Biak would be used by
Russia's Air Launch Aerospace Corp and would initially cost some 120 mln
usd.
'It has been under discussion for a while and the project is now already
at the preparation stage,' he said, adding that the rocket carrying the
satellite would be launched from an aircraft.
Biak, an island of 2,455 square kilometers in Cendrawasih Bay, in the
easternmost Indonesian province of Papua, is on the equatorial belt. An
equatorial launch site means fuel savings and the ability to carry bigger
payloads.
The government has been promoting the use of Biak as the site of a space
launch center since the 1960s.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
MSNBC
CNOOC cuts purchase from BP's Tangguh field
By Enid Tsui in Hong Kong and Shawn Donnan in Jakarta
Updated: 4:10 p.m. ET Dec. 15, 2005
China National Offshore Oil Corporation (CNOOC) has unexpectedly cut the
amount of gas it is buying from the BP-operated Tangguh project in
Indonesia, amid market rumours that the two parties are at odds over
pricing.
The news could be a setback for China's efforts to diversify its energy
sources, dominated by coal and crude oil.
In September 2002, CNOOC signed a 25-year, US$7.5bn contract with Tangguh
to buy 2.6m tonnes of gas a year for its Fujian liquified natural gas
(LNG) terminal with delivery originally slated for 2007. The Chinese group
holds a 17 per cent stake in the project set in the remote Papua province.
But Purnomo Yusgiantoro, the Indonesian energy minister, said on Thursday
that "China has told us that ... in the near term it appears Fujian can
only receive 1m tonnes per year," without elaborating on what prompted the
decision.
Speculation has been rife in Beijing and Jakarta recently that BP, the UK
energy group that is majority owner of Tangguh, has put pressure on CNOOC
to renegotiate the 2002 contract. Managers at CNOOC's gas and power
subsidiary could not confirm the news on Thursday.
"On paper, the gas that CNOOC ordered in 2002 was very cheap considering
how much prices have increased in the years since," said Gavin Thompson,
head of China research at Wood Mackenzie, the industry consultants.
Under the original agreement, the Chinese group was due to pay US$0.98 per
barrel of oil equivalent for the gas, based on market estimates. As a
comparison, South Korea and Japanese buyers have been paying about US$4
boe in recently signed gas contracts.
The Fujian terminal, together with CNOOC's LNG project in Guangdong
province, is seen as a testing ground for the wider adoption of gas use
around China. The Beijing government has set an ambitious target of having
gas make up 8 per cent of the country's energy mix by 2010, up from the
current 3 per cent.
The $5.5bn Tangguh project has been beset by construction delays. Last
year, BP pushed its start date back from 2007 to 2008 after it was slowed
down by lengthy talks with Jakarta over the terms of its licence for
related gas fields.
Besides Fujian, Tangguh is under contract to provide 3.7m tonnes of gas
per year to a Mexican terminal supplying the US west coast, and 1.1m
tonnes per year to South Korea.
-- Copyright The Financial Times Ltd. All rights reserved.
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