[Kabar-indonesia] 10 Oil/Gas/Mining Articles: Antam H1 profits up 24%; LNG supply in 2010; LSWR...

[Joyo at aol.com]

10 articles compiled & selected by Joyo Indonesia 
News Service:

- Indonesia Antam's H1 profit up 24%, ferronickel
  output jumps 151% 

- Kepco: Indonesia To Cut LNG Supply To 6M Tons After
  2010 

- Indonesia allots 1.85mln bbls Sept LSWR, down 18pct 

- Indonesia offers 20 oil blocks with bigger split to
investors 

- ConocoPhilips Indonesia to sell Ujung Pangkah gas
  block 

- Singapore's KS Energy target price raised to 2.90
  sgd - DBS 

- Four investors eyeing stake in Indonesia's KPC and
  Arutmin 

- More gas discovered near Indonesia's Oyong field off
  East Java 

- Expert : Indonesia should optimized coal utilization

- Avocet Mining Positive Trenching Results In
  Indonesia

--------------------


Indonesia Antam's H1 profit up 24%, ferronickel output
jumps 151%

Singapore, August 29 (Platts) -- Indonesia's PT Antam
posted Wednesday unaudited consolidated net profit of
Rupiah 515 billion ($56 million) for the first half of
2006 ended June 30. This figure is a 24% increase over
the Rupiah 416 billion achieved in H1 2005.

The company's net sales for the period rose 61% year
on year to $229 million, largely due to increased
production and sales volumes of nickel contained in
ferronickel and slightly to moderately higher average
selling prices for all of Antam's products, the
company said.

The bulk of sales were again generated by exports and
from the nickel division, with 93% of sales amounting
from exports and 84% from the nickel division.

Ferronickel production in H1 2006 jumped 151% year on
year to 6,859 mt as output from FeNi II continued
strongly following an overhaul completed in October
2005, Antam said. Sales volumes rose along with
production increases by 175% to 6,329 mt, due to a
continuing strong demand for nickel from customers, it
added.

Ferronickel sales for the half year rose 241% to
Rupiah 967 billion, or 46% of total sales, and
contributed an additional Rupiah 684 billion, compared
to H1 2005. Ferronickel sales price was 10% higher at
$7.54/lb.

Due to the implementation of a redesign of Antam's
Pongkor gold mine, production of gold and silver
during the half year fell to 1,280 kg and 10,631 kg,
respectively. In line with the decline, sales volumes
also dropped by 33% to 1,178 kg for gold and by 9% to
10,236 kg for silver.

Antam said its bauxite division saw an 11% increase in
sales, or Rupiah 9 billion, in H1 2006. Total sales
value rose to Rupiah 88 billion, despite lower
production and sales volumes, as the average bauxite
price rose 27% to $13.45 per wet mt.

For the full year 2006, Antam has targetd a
ferronickel output of 13,000-15,000 mt, a gold output
of 2,500 kg, and a bauxite output of 1.5 million wmt.

Antam has 3,100 mt of nickel hedged, with an average
put price at $9.65/lb and an average call price of
$13.19/lb. The period runs from August to December
2006, with 600 mt of options maturing every month.

It has no other commodities hedging.

----------------------------------------------------------

Kepco: Indonesia To Cut LNG Supply To 6M Tons After
2010

TOKYO, August 30 (Dow Jones)--Indonesia's state-run
oil and gas company Pertamina (PTM.YY) has reached an
agreement with Japanese end users to cut shipments of
liquefied natural gas by half to 6 million metric tons
a year after current supply contracts expire in 2010,
a spokesman for Kansai Electric Power Co. (9503.TO)
said Wednesday.

Six Japanese companies and Pertamina reached a basic
agreement in late 2005 to reduce LNG supply from the
current 12 million tons a year, according to the Kepco
spokesman, but the actual amount of the cut was not
known until now.

The companies are Kepco, Osaka Gas Co. (9532.TO),
Chubu Electric Power Co. (9502.TO), Kyushu Electric
Power Co. (9508.TO), Toho Gas Co.

(9533.TO) and Nippon Steel Corp. (5401.TO).

The companies are hoping to renew their contracts and
are currently in talks with Pertamina.

"We are still in talks. The situation hasn't changed
that much from last year," said the Kepco spokesman.

Indonesia's President Susilo Bambang Yudhoyono said in
March the country might reduce its LNG exports to
Japan after 2010, to boost the availability of natural
gas for domestic industries amid decreasing natural
gas production.

Kepco, Japan's second largest utility in terms of both
revenue and output, imported 4 million tons of LNG in
the fiscal year to March 2006, 46% of which came from
Indonesia.

The company reduced its dependence on Indonesian LNG
from 74% in fiscal 2002 to 46% in fiscal 2005 by
importing more LNG from countries like Qatar and
Australia.

Japan imported 58 million tons of LNG in 2005, of
which 25% was from Indonesia.

-----------------------------------------------------------

Indonesia allots 1.85mln bbls Sept LSWR, down 18pct

SINGAPORE, August 29 (Reuters) - Indonesia's Pertamina
has allocated 1.85 million barrels of low-sulphur waxy
residue (LSWR) for September exports, down 18 percent
from the total in August, industry sources said on
Friday.

The lower volumes came in the face of a tepid
low-sulphur fuel oil (LSFO) market that has seen
premiums more than halved in recent tenders involving
key consumers Taiwan and South Korea.

"Demand for LSWR particularly has been really bad,
with Japanese inventories brimful and arriving cargoes
having to sit in the water before being able to
discharge," a Singapore-based Asian trader said.

"It's so bad some traders had to forcibly create an
arbitrage window to float the parcels to the U.S. So
it's no surprise that there's less supply coming out
of Indonesia for next month."

Of the nine LSWR cargoes allocated by state-owned

Pertamina, one -- a 200,000-barrel straight-run parcel
for Sept. 28-30 loading from Cilacap -- was not
allotted, traders said.

Four of the remaining mixed/cracked parcels, all
loading from Balikpapan, were allocated to Japan's
Mitsui Oil Asia (MOA), the product's largest
allocation holder, while the other three were allotted
to Shell, another term lifter.

Another straight-run lot, for Sept. 15-17 loading from
Sungei Pakning, was allocated to Pertamina affiliate
Pacific Petroleum Trading (PPT) as usual.

Traders said poor demand for August-loading cargoes
had seen U.S.-based trader Westport, a wholly owned
unit of MOA's parent Mitsui & Co., and another trader
sending parcels to the United States.

Westport has floated a 60,000-tonne cargo, for Aug. 17
loading from Dumai on board the panamax tanker Lian
Yun Hu, while the other trader chartered the
80,000-tonne aframax tanker Akademik Pustov, for Aug.
15 loading from Indonesia.

LSFO, like the larger high-sulphur fuel oil market,
has been in a slump since June, on falling demand in
key consuming countries such as Japan, South Korea,
Taiwan and Thailand.

Inventories in Japan, the product's largest consumer,
remained high following a mild winter, while there
were no unexpected nuclear plant shutdowns. Thailand's
stock levels are near capacity levels of around
100,000 tonnes, as the country moves into the
low-demand rainy season at the end of the year.

Last week, Taiwan refiner Chinese Petroleum Corp.
(CPC) bought an 80,000-tonne cargo, of maximum 0.5
percent sulphur, at a premium of $30-$35 a tonne to
Singapore spot quotes, on a cost-and-freight (C&F)
basis to either Kaohsiung, Keelung or Taichung, well
below the $55-$65 premium in June.

Utility Korea East-West Power Co. (KEWPCO) bought
40,000 tonnes of 0.3 percent sulphur LSFO for Sept.
1-7 delivery to its Ulsan power plant, at a premium of
$2-$3 a tonne, C&F, down from a $83-premium for a
February-delivery parcel. Table of September LSWR
allocations

 Company Load date  Port  Volume (bbl)  Mitsui  Sep
1-3  Balikpapan  200,000 mixed/cracked  Sietco  Sep
6-8  Balikpapan  200,000 mixed/cracked  Mitsui  Sep
10-12 Balikpapan  200,000 mixed/cracked  Mitsui  Sep
14-16 Balikpapan  200,000 mixed/cracked  Sietco  Sep
18-20  Balikpapan  200,000 mixed/cracked  Mitsui  Sep
22-24 Balikpapan  200,000 mixed/cracked  Sietco  Sep
25-27  Balikpapan  200,000 mixed/cracked  PPT  Sep
15-17  Sungei Pakning 250,000 straight-run  unplaced
Sep 28-30  Cilacap   200,000 straight-run

---------------------------------------------------------

Indonesia offers 20 oil blocks with bigger split to
investors

JAKARTA, August 30 (Xinhua) -- The Indonesian
government plans to sell 20 oil and gas blocks with
bigger revenue split to investors due to more
challenging exploration works, a newspaper reported
Wednesday.

The government offers government-investor revenue
split of 65- 35 for 12 blocks and 75-25 for the
remaining eight, reported Bisnis Indonesia.

The official split is 85 percent to the government and
15 percent to investor.

The decision is mentioned in the mineral resources and
energy minister's decree dated Aug. 14.

"Fields with high level of difficulty are given bigger
split to attract more investors," oil and gas director
Lulu Sumiarso was quoted as saying.

-----------------------------------------------------------

ConocoPhilips Indonesia to sell Ujung Pangkah gas
block

JAKARTA, August 30 (Asia Pulse/Antara) - ConocoPhilips
Indonesia plans to sell its assets in Ujung Pangkah
gas block in Madura, East Java, as the venture is
considered not profitable, an official said.

The block is expected to start producing gas next
years delayed from the original schedule this year,
the official, who refused to be identified said.

Head of the Upstream Oil and Gas Regulatory Agency
Kardaya Warnika said the delay was caused by
difficulty in finding a rig for drilling.

State-owned electricity company PLN already signed a
contract to buy its gas output, the official said

Director of upstream oil and gas development at the
Oil and Gas Directorate General Priyono said
CononoPhilip had indicated its plan to sell the asset.

---------------------------------------------------------

Singapore's KS Energy target price raised to 2.90 sgd
- DBS

SINGAPORE, August 29 (XFN-ASIA) - DBS Vickers
Securities said it has raised its target price for KS
Energy to 2.90 sgd per share from 2.86 previously
after the company formed a joint venture with PT Citra
Tubindo Tbk to refurbish and upgrade oil exploration
rigs in Indonesia.

'Through this collaboration, PT Citra offers KS Energy
its existing customer base (and) ready oil and gas
engineering infrastructure facilities in Batam to tap
into the growing capital equipment demand in the
Indonesian oil and gas market,' DBS Vickers said.

'This is definitely positive for KSE, as this deal
completes the 'hardware' requirements for KS Energy to
be a one-stop shop for potential Indonesian clients.
Furthermore, the company is also poised to benefit
from the long-term supply contract awarded to
subsidiary Aqua-Terra by PT Citra,' it added.

At 10.56 am, KS Energy was up 0.07 sgd or 2.88 pct at
2.50 with 1.23 mln shares traded.

-----------------------------------------------------

Four investors eyeing stake in Indonesia's KPC and
Arutmin

JAKARTA, August 28 (Asia Pulse/Antara) - Coal company
Bumi Resources (JSX:BUMI) said four investors have
sought to buy up to 20 per cent of its coal mining
subsidiaries Kaltim Prima Coal and Arutmin Indonesia.

Bumi Resources has failed to sell the two subsidiaries
and two smaller coal mining units at a price of US$3.2
billion to Borneo Lumbung .

Bumi President Ary S. Hudaya said the company decided
to seek strategic partner after the failure of the
deal, which would have been the biggest single deal
ever in the country.

Hudaya refused to name the would be buyers beyond
saying that the strategic partner must be have the
potential to improve the performance of the two
subsidiaries

-------------------------------------------------------------

More gas discovered near Indonesia's Oyong field off
East Java

Sydney, August 29 (Platts) -- Partners in the Sampang
production sharing contract offshore East Java have
made a new gas discovery near Indonesia's Oyong oil
and gas field, Australia's Cue Energy said Tuesday.

The Wortel-1 near-field exploration well has
encountered a gross gas column of 141 meters in good
quality reservoir, according to initial
interpretation. The well is now expected to be flow
tested.

"The discovery of gas at Wortel is encouraging given
that Wortel is only 7 km (4 miles) west of the Oyong
oil and gas field, where a platform has been installed
and a gas pipeline is planned from the field to Grati
to supply gas under an existing gas contract," Cue
said in a statement. The company said it expected to
make further comments on the find once testing was
completed.

The Sampang PSC is operated and 40.5% held by
Australia's Santos, 36% by Singapore Petroleum, 13.5%
by Cue and, subject to finalization, 10% by
Indonesia's Petrogas.

The Oyong oil project in Indonesia last month joined a
growing list of Southeast Asian petroleum developments
that have been delayed by equipment and contractor
shortages.

The oil phase of the project, which is around 95%
complete, was originally expected to begin producing
in the third quarter of 2006.

But delays due to contracting issues and the procuring
of the production barge has pushed the anticipated
first oil date back to the second quarter of 2007.

Meanwhile, front-end engineering work has begun for
the second, gas development stage at Oyong. First gas
deliveries from the field are now expected in the
second half of 2008, a year later than forecast early
in 2006.

Oyong was discovered in 2001. The field was expected
to cost around $120 million to develop, with installed
capacity planned at 60 million cubic feet/day of gas
and 10,000-20,000 b/d of oil.

Santos signed a heads of agreement in February 2003 to
sell all of the gas produced from Oyong to PT
Indonesia Power for its power station at Grati.

---------------------------------------------------------

Expert : Indonesia should optimized coal utilization

Cilegon, West Java (ANTARA News) - Indonesia actually
has the potential to produce 6.7 billion tons of coal
annually, but the available coal deposits in the
country have not been optimally exploited, Secretary
General of the Indonesian Engineers Association (PII)
Arudji Phudri said here Monday.

The provision of energy in Indonesia should be
oriented to the use of coal as a substitute for oil,
for instance in the provision of alternative fuel for
power generation, transportation and household
activities, according to Arudji.

Speaking at the coordination meeting of chemical
engineering students at PT Krakatau Steel`s
auditorium, he said developing alternative energy
sources, including coal utilization, is the only way
to escape from the current energy crisis resulting
from the soaring oil price.

He pointed out that Indonesia crude oil reserves have
been depleted, and accounting for only 0.6 percent of
the world`s oil reserves. "In such a critical
condition, optimizing the use of alternative energy
sources, including coal, is imperative in coping with
the fuel shortage," he added.

On the occasion, he also cited the importance of
developing the utilization natural gas, geothermal
energy, bio-fuel and other energy sources.

Krakatau Steel Director Daenulhay stated his regret
that the application of sophisticated technology in
Indonesia has an impact on the consumption aspect
instead of the production aspect.

Citing an example, he pointed out that Indonesian
consumers are more interested in using cellular
telephones, televisions and such other products of
sophisticated technology.

He suggested that university graduates and students
should be able to introduce technology in the
production process so as to minimize the negative
impacts.

----------------------------------------------------------

Avocet Mining Positive Trenching Results In Indonesia

Edited Press Release

LONDON, August 30 (Dow Jones)--Avocet Mining said
Wednesday it had positive trenching results from a
recent exploration campaign over the Mangkaluku
prospect in South Sulawesi, Indonesia.

The company said it has identified the potential for
at least two orogenic quartz lode systems similar to
the mineralisation at the Company's Penjom gold mine
in Malaysia. These are Mangkaluku and Tarra-Siguntu.

The main target, Mangkaluku, was the focus of
exploration in 2006. A grid soil sampling programme
identified an 800 x 1,000 metre gold anomaly (> 50 ppb
Au in soil) encompassing three main ENE-striking fault
zones. Trenching across the main zone has identified
two main sheeted vein sets, which strike ENE and NNE,
hosted by a phyllic-altered metamorphosed monzodiorite
intrusion. Trenching in a NW direction has been
favoured to cut across the mineralised vein sets,
although one trench (MLT030) does trend ENE to cut a
predominant NNE-striking vein set.

Avocet said trenching will continue within the main
zone, as well as in the parallel fault zones, in order
to investigate the full scale of the vein system and
its internal fabric in preparation for drilling in
2007. It added that while the trenching programme has
proven the existence of high-grade gold mineralisation
over significant widths, drilling is required to prove
up the continuity of mineralisation.

Exploration at Mangkaluku will take priority over
additional work at Tarra-Siguntu.

The South Sulawesi project is a grass roots
exploration initiative designed to identify drilling
targets within a known belt of orogenic gold
mineralisation. This is an area with poor rock
outcrops therefore requiring extensive trenching to
investigate geochemical anomalies.

Avocet currently controls the project through a
temporary exploration permit, which is a pre-cursor to
the old Contract of Work tenement system. The
Indonesian Government is currently drafting a new
Mining Law that will form the framework for
exploration and mining tenements in the future. In the
meantime, Avocet intends to use the Kuasa Pertambangan
(KP) tenement structure to maintain control over the
South Sulawesi project.

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Joyo Indonesia News Service
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