Category: Commodities

Notes on Commodities

Brent crude oil hovers around US$80 per barrel to represent 38.4% gain year-on-year. This is good for the State Budget 2018, but will likely contribute to bigger oil and gas trade deficit. Upstream oil and gas companies, including Pertamina, should benefit from the relatively strong price, but petrochemical company like Chandra Asri (TPIA) will see pressures on margin because naphtha price increased 33.3%.

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ENI + Pertamina in Biorefinery

Italy’s energy giant ENI and state oil and gas company Pertamina have on Friday (Sep 21) signed a memorandum of understanding for development of the so-called green refinery, i.e. converting Pertamina’s existing conventional refinery into biorefinery. 

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Silkroad & The Nickel Country

Silkroad Nickel Ltd has become the first Indonesian nickel concession listed on catalyst market of Singapore Exchange (SGX). At the last quoted price, Silkroad has market capitalization of S$127 million, pretty good for a company with nickel mining concession of 1,301 hectares only in Morowali Regency, Central Sulawesi province.

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Coal Journal

Thermal coal retreated to US$112 per ton Wednesday (Sep 18) to represent year-on-year gain of 16.83%, ensuring positive trend for the commodity’s contribution to Indonesian economy this year. In the first eight months of 2018, Indonesia generated export revenues of US$16.46 billion from coal, an increase of 24.3% from the corresponding period last year.

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New Leaders of Pertamina

Pretty much as we reported, Pahala N Mansyuri, former president director of flag carrier Garuda Indonesia (GIAA), has been appointed chief financial officer (CFO) of state oil and gas company Pertamina. He replaces Arief Budiman, who has been in the position for quite sometime.

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Barito Leaves, LG Strengthens Plantation

After years of speculation, Barito Pacific (BRPT), controlled by the family of tycoon Prajogo Pangestu, has decided to let go its plantation asset. On September 7, 2018, PT Royal Indo Mandiri, subsidiary of BRPT, sold its interest in the plantation business to PT Green Global Lestari for a cash consideration of US$67.9 million. 

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Mixed Fortunes

Brent crude oil touched US$80 per barrel Wednesday (Sept 12) on worries surrounding possible action from US President Donald Trump on Iran. Thermal coal, on the other hand, retreated to US$114.25 per ton. While Indonesia is net importer of fuel, the State Budget 2018 will get windfall from both oil and thermal coal.

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Coal Journal

The government has set coal reference price of US$104.72 per ton for September 2018. While lower than August (US$107.83), this represents year-on-year gain of nearly 14%, ensuring strong third quarter results of Indonesian coal producers because August and July gained 28.4% and 32.6% year-on-year respectively.

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Sinarmas Expands Coal Business Further

Pretty much as predicted, Golden Energy Mines (GEMS), coal mining subsidiary of Sinarmas Group, decided to expand its business with the acquisition of four companies from GMR Group for US$59.27 million. The acquisition lifts GEMS’ coal reserves by 194 million tons, leading to even higher output going forward.

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Revisiting Oil & Gas Offshore Supporting Business

Oil has long left its bottom to close above US$70 per barrel (WTI crude) yesterday, but might be difficult to return to above US$100. Some oil and gas supporting services companies have been seriously hit by sudden fall of the commodity few years back. We interviewed Sugiman Layanto (SL) and Bambang Ediyanto (BE), both are deputy chairman of Indonesian National Shipowners Association (INSA) under the leadership camp of Johnson W Sutjipto to get better understanding about oil and gas supporting services industry in the country.

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Oil & Gas Journal

Nymex crude oil declined 0.68% to US$69.77 per barrel in Asian trading this morning amid supply concern. Oil inventory in United States is expected to increase, but expected lower output in Venezuela could cap. In August, oil production in Saudi Arabia increased at the highest level at 10.424 million barrels per day.

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