Masela Block: Testing Jokowi’s Wisdom
President Jokowi led a cabinet meeting on December 29, 2015 to discuss various issues surrounding the giant Masela Block, where Inpex (Japan) and Shell (UK/Netherland) plan to develop the so-called Abadi LNG project. The President initially planned to meet Inpex/Shell later on, but until now the meeting is still postponed. The cabinet meeting, however, was followed up by energy and mineral resources minister Sudirman Said’s visit to Maluku late last week.
KPK on JV of Local Govt & Private Investors
The Corruption Eradication Commission (KPK) came out with an interesting suggestion to President Joko ‘Jokowi’ Widodo on Tuesday (Jan 12). KPK suggested the President to cancel joint venture between local/regional governments and private investors in 22 oil and gas blocks, pointing to unfairly low return for local governments in these partnerships.
Crude Oil Below US$30, Palm Oil?
WTI crude oil was settled at US$30.77 per barrel in New York after briefly slipping below US$30 yesterday. Some believe the commodity is heading to US$20 per barrel. What about crude palm oil (CPO)? Will it fall to below US$400 per ton (FOB) like average price in 2002?
Further Consolidation in Coal Industry
Shares of Arch Coal Inc, the second largest coal producer in the United States, collapsed almost 31% Monday following the management decision to file for Chapter 11 bankruptcy protection. Peabody Energy Corp, the world’s largest producer in private sector, also crashed 20%, while Consolidated Energy lost almos 9%.
Berau Coal/Sinarmas & Rosan’s Assets
New owner of PT Berau Coal Energy (BRAU) Tbk, Sinarmas Group, has recently refused to disclose status of its effort to recover US$175 million funds from Rosan P Roeslani, former CEO and shareholder of BRAU, who is now chairman of Indonesian Chamber of Commerce and Industry (KADIN Indonesia). Judith Prakash, Judge at the Singapore Court, however, had actually issued on December 29, 2015 reasons for the issue of the worldwide injunction order against Rosan.
Further Production Cut for Coal
UK has last month closed down its last deep coal mine in North Yorkshire. Alinta Energy, meanwhile, closed down its open cut ming in South Australia earlier in November. Rosan Resources told HKEX this morning that it has closed down Xiaohe Coal Mine No. 2 due to the current downturn of the coal market.
Renewable Energy Drive & Conflicting Interests
Indonesia is under pressure to reduce its carbon emision under the Conference of Parties (COP) 21. In this context, the government has set out a plan to use more renewable and cleaner energy resources, including geothermal. Implementation, however, won’t be easy, which can be seen in the recent conflict between state-owned electricity provider PT Perusahaan Listrik Negara (PLN) and state-owned oil and gas company Pertamina.
Strategic Long-Term Support for Palm Oil
KPB Nusantara, the joint marketing office of state plantations, was forced to withdraw three out of seven CPO packages auctioned off Wednesday (Jan 6) due to low bids. The commodity continues to be under pressure from falling crude oil and soybean oil prices, despite falling output in the past few months.
2016 Targets of Bukit Asam: Overtly Optimistic?
Shares of coal producers were hammered worldwide on Monday (Jan 4) by persistent volatility in the energy market. Bukit Asam (PTBA) lost almost 5%, but recovered most of its losses Tuesday (Jan 5) morning. The state-owned coal miner sets what some believe an overtly optimistic target for 2016.
China’s Penetration in Indonesian Power Generation Industry
China dominated the first 10,000 MW power plant projects under SBY-Kalla regime, but only as engineering, procurement, and construction (EPC) contract works. Under Jokowi-Kalla’s 35,000 MW program, however, China emerged as major investor in independent power producer (IPP) projects.