Growing Consumption & Pending Gas Projects
Indonesia exported 15.6 million tons of natural gas in the first eight months of 2016, down 1.33% from the corresponding period of 2015. Import of natural gas, meanwhile, grew 3.67% year-on-year to 2.84 million tons in the period. Indonesia will continue to be a net exporter of natural gas in the coming years, but slow pace of gas projects hurt long-term supply-demand balance.
Coal Journal
State-owned electricity firm PT Perusahaan Listrik Negara (PLN) spent Rp18.53 trillion of its cash for investing activities in the first half of 2016, an increase of 27% from the corresponding period of 2015, mostly due to 40% jump in investment for new property, plant, and equipment under the 35,000 MW program.
Commodities & The Economy
Indonesian economy is poised to improve in the fourth quarter from positive results of the tax amnesty program and relatively higher prices of commodities. WTI crude oil retreated 0.51% to US$46.81 per barrel on Nymex Friday (Sept 30), but higher than price assumption in the revised 2016 budget.
Rally of Commodities
OPEC’s decision to cut production lifted crude oil to above US$47 per barrel. This led to rally of resources-related stocks worldwide. Santos gained almost 8% in Sydney Thursday (Sep 29) morning, while CNOOC advanced 4.4% in Hong Kong. Earlier on Wednesday, ConocoPhillips gained almost 7% in New York, while ExxonMobil edged up 4.4%.
Medco’s Interest in Newmont
After months in the dark, investors have finally been informed about acquisition scheme of PT Newmont Nusa Tenggara (NNT). PT Medco Energi Internasional Tbk (MEDC), pretty much as predicted, will own less than 50% shares in NNT.
First Half Results: Elnusa & Apexindo
Oil and gas services company PT Elnusa Tbk (ELSA) posted a 9.2% growth in net profit for the first half (H1) of 2016, thanks to cost efficiency strategy amid lower revenues. As global oil prices are remain unstable, which impact on the drilling and oilfield services activity, the Company boosted its seismic, logistic, distribution services activity and other supporting businesses to offset the declining activity in drilling and oilfield services.
New Energy Minister
President Joko ‘Jokowi’ Widodo is said to have found candidate for energy and mineral resources minister to replace Arcandra Tahar, who was dismissed last month due to dual citizenship issue. The new minister is said a professional without links to any political party.
Coal Journal
Rally in thermal and coking coal prices might trigger some returning to the market. Discipline production cut, La Nina, and the upcoming winter season, however, might support thermal coal in the short-medium term.
Rally of Commodities & The Economy
Rallies in key commodities, especially oil & gas, palm oil, thermal coal, and metals might help the State Budget 2016 to contain short-term pressures from the shortfall in tax collections. Crude oil is now traded 10% above budget, while other commodities gained more in the third quarter.
Sinarmas Group’s Coal Play
Golden Energy Resources Ltd, a company controlled by Sinarmas Group, intends to boost its coal production in Indonesia to 12 million tons next year. Combined with output from Berau Coal Energy (BRAU), Sinarmas Group will become third largest coal player in Indonesia behind Bakrie Group (Bumi Resources) and Adaro Group.