Updates News July, 10, 2017

In The News

 

SKKMigas teams up with financial intelligence body to prevent money laundering

Jakata Post 10/07/2017

The Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) has teamed up with a financial intelligence body to boost transparency and prevent money laundering among stakeholders involved in the upstream sector.

SKKMigas signed a memorandum of understanding (MoU) with the Financial Transaction Reports and Analysis Centre (PPATK) last Thursday to secure cooperation in several areas, including in the exchange of information, research and information technology development.

Through the MoU, we expect there will be further efforts to prevent and eradicate money laundering in upstream oil and gas activities,” SKKMigas communications head Wisnu Prabawa Taher said in a statement on Sunday.

Wisnu said all stakeholders, including financial regulators, law enforcers and the public, should join hands to meet this ambition.

In May 2015, the National Police raided the offices of petrochemical company PT Trans Pacific Petrochemical Indotama (TPPI) and SKKMigas in Jakarta, as several officials from both parties were suspected of laundering money, allegedly causing state losses of US$156 million.

From 2009 to 2010, the TPPI collaborated with SKKMigas to market condensate in the country, but the former never paid out the profits from the sales of the equipment to the latter.

Moreover, in April 2014, former SKKMigas chief Rudi Rubiandini was sentenced to seven years in prison and fined Rp 200 million ($14,905) by the Jakarta Corruption Court after he was proven guilty of accepting S$200,000 and $900,000 in bribes from Widodo Ratanachaithong of Singapore-based oil trading company Kernel Oil. (bbn)

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DBS Indonesia’s net profit surges 75% in Q1

Jakata Post 10/07/2017

PT Bank DBS Indonesia, a subsidiary of Singapore-based DBS Bank, has reported a 75 percent year-on-year (yoy) increase in its net profit during the first quarter of 2017 to Rp 263 billion.

The net profit increase whas supported by a 16 percent yoy increase in revenue, which reached Rp 1 trillion in the first quarter this year. Its net interest income rose 23 percent to Rp 740 billion.r

“The positive performance reflects our strong commitment in the corporate and consumer banking segment,” Bank DBS Indonesia director of strategy and planning Rudy Tandjung said in a press statement on Saturday.

Focusing on corporate banking and small and medium enterprises (SME) banking segments, the lender booked increases in the return on assets (ROA) ratio and the return on equity (ROE) ratio to 2.16 percent and 13.45 percent, respectively.

Rudy said the bank was on its way to transforming itself into a digital bank this year. “We are focusing in our […] agenda on becoming a digital bank. 

We started the transformation from the inside, by changing the mindset and behavior of our employees and also redefining their respective roles,” he said.

In the first quarter of this year, DBS Indonesia issued a negotiable certificate of deposit (NCD) with a 7.1 percent annual interest rate. 

DBS Indonesia had also released a new bancassurance product in its Wealth Management portfolio during the same period, Rudy said. (mrc/ags)

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SKKMigas to audit Jambaran-Tiung Biru gas project

Jakata Post 10/07/2017

The Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) plans to audit the development cost of the Jambaran-Tiung Biru (JTB) field in Central Java because of its gas price, which SKKMigas said was overpriced.

“We’ll conduct an audit to see whether the development cost can be reduced, including in the procurement of its production facilities,” SKKMigas deputy for operation control Fatar Yani Abdurrahman said in Jakarta recently.

The JTB field is located within the Cepu block, which is jointly owned and operated by several parties, including PT Pertamina EP Cepu (PEPC) with 45 percent interest and local government-owned enterprises with 10 percent interest.

“At present, we’re still stuck in the monetization process because the field’s development is too costly, resulting in a gas price of 11 dollar per mmbtu [million British thermal unit]. It doesn’t make sense,” Fatar said, adding that any figure below that would be uneconomical.

The JTB field, initially slated to be on stream in 2020, will produce an estimated 172 million standard cubic feet per day (mmscfd) of gas, 100 mmscfd of which is set to be bought by state electricity firm PLN for its power plant in Gresik, East Java.

However, there has been a deadlock over the gas price, as PLN is only willing to pay $7 per mmbtu for the gas at its plant gate in Gresik, while PEPC wants the price of $7 per mmbtu at its wellhead in the JTB field. 

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Pupuk Indonesia optimistic about 2017 target

Jakata Post 10/07/2017

pmkembanganState fertilizer holding company PT Pupuk Indonesia has expressed optimism that it will achieve its 2017 subsidized fertilizer production target of 9.5 million tons, stressing that the company produced almost half of the target during the first half of 2017.

“We have produced 46 percent of the target so far,” Pupuk Indonesia corporate communications head Wijaya Laksana said Sunday as quoted by kontan.co.id.

The types of fertilizer distributed during the first half were 1.9 million tons of urea, 1.25 million tons of NPK, 432,000 tons of SP36, 472,000 tons of ZA and 296,000 tons of organic fertilizer.

The distribution of subsidized fertilizer to farmers has also gone smoothly, said Wijaya.

“The current stock is relatively good. As of June 6, 856,114 tons of fertilizers are stored at warehouses and kiosks.

This amount is enough to fulfill needs for the next six weeks,” he said, adding that Pupuk Indonesia had sent additional supply to regions to avoid a fertilizer shortage. (rdi/bbn)

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Indonesia, Turkey to Ramp Up Cooperation in Energy and Aerospace Industries

Jakata Post 10/07/2017

Indonesian ship and airplane builders finalized business deals totaling $520 million with Turkish companies, paving the way for future investments from Turkey into diverse industries in the Southeast Asian nation.

State-owned ship manufacturer PAL Indonesia signed a $320 million deal with Turkish energy company Karadeniz Holding to build four power ships, according to Thomas Lembong, the chairman of the Investment Coordination Board (BKPM).

Each ship will have the capacity to generate 36-80 megawatts of electrical power to bolster energy needs in some of the country's more remote provinces.

Thomas also said cooperation between PAL and Karadeniz would put Indonesia on the map as an important manufacturing base for power ships in Southeast Asia, where neighboring countries like the Philippines and Myanmar might be potential customers.

In a separate deal, airplane manufacturer Dirgantara Indonesia (DI) and Turkish Aerospace Industries (TAI) agreed to a $200 million cooperation to develop DI's N245 aircraft and to market the N219 aircraft to Turkish airlines. In return, DI will help market and produce TAI's UAV-ANKA military drone.

"BKPM supports the recent investment cooperation between Indonesian and Turkish companies. These deals are expected to increase Turkey's investment into the country, which is currently pretty minimal," Thomas said.

BKPM data shows that nine Turkish companies invested only $100,000 into Indonesian companies in the first quarter this year, down 80 percent from the same period in 2016.

The total amount of foreign direct investments in the country reached $7.3 billion in the first quarter this year.

Both deals were finalized during President Joko "Jokowi" Widodo's visit to Turkey on Thursday (06/07), when Jokowi and Turkish President Recep Tayyip Erdogan vowed to strengthen business and cultural ties between the two countries.

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Indonesia Tourism Records Faster Growth Than Other SEA Countries

Jakata Post 10/07/2017

 

Indonesia's tourism sector has grown significantly in the first four months of the year, much faster compared with Singapore, Malaysia and Thailand.

In January-April, 5.79 million foreign visits were recorded in Singapore — a 4.4 percent increase from 2016 — the Business Times said on its website on June 24.

 

Singapore had 1.1 million Chinese visitors and 968,000 Indonesian. The visits from Indonesia, however, are expected to decline with the strengthening of the Singapore dollar. "The strengthening of the dollar is expected to last until the end of the year," Cushman & Wakefield research director Christine Li said in a statement on Tuesday (04/07).

The slow growth has also affected Singapore's hotel industry.

The growth in Malaysia has been even slower. Xinhua News Agency reported on June 8 that the number of tourists visiting Indonesia's neighbor dropped by 0.5 perceThailand has also experienced a drop in the number of visits, with 12.02 million foreigners arriving to the country in the first four months, up 2.91 percent from the same period last year, TTR Weekly reported in the end of May.

According to data data from the Central Statistics Agency (BPS), Indonesia recorded a 19.34 increase in the number of visits between January and April.In the first four months, 4.2 million foreign tourists visited the country, with 1.14 million in April alone — 26.75 percent up from April 2016.

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Indonesia, Norway agree to increase cooperation

ANTARA News 10/07/2017

 

Indonesia and Norway have agreed to increase current cooperation as trade and investment have been growing positively, Head of Press, Media and Information of the Presidential Secretariat Bey Machmudin said in a press release received here on Sunday.

The agreement was the important point in the results of the bilatetal meeting between President Joko Widodo and Norways Prime Minister Erna Solberg on the sideline of the G20 Summit in Hamburg on Saturday (8/7).

"Trade in 2016 rose by 40.5 percent in value compated to 2015. Investment meanwhile increased 77.2 percent including portfolio investment from Norways Pension Global Fund. 

The positive trend must cintinue to be maintained and even increased," President Joko Widodo said to Prime Minister Ema who vidited Indonesia in 2015.

He said Indonesia has received investment grades from three world rating agencies.I hope for your support so that Indonesia-European Free Trade Association Comprehensive Economic Partnership Agreement (EFTA CEPA) negotiations could be finished this year," he said.

On the occasion President Jokowi as he is also called expressed concern over the resolution of Norway parliament on palm oil.

He said the resolution ran counter to the spirit of REDD+ cooperation between Indonesia and Norway and negated efforts made by Indonesia with regard to overcoming climate change effects, environment protection and sustainable development."I believe the Norway government supports open and fair trade relations," he said.

The two leaders also discussed fisheries and marine resource sectors in the meeting. President Jokowi lauded increased intensity in the cooperation between the two countries in the sectors including Norways support to Illegal, Unreported and Unregulated (IUU) fishing in Indonesia.

"I wish to push for formalizing cooperation in the field covering IUU Fishing, fishery management, sustainable culture and sea protection," he said.

President Jokowi was flanked by foreign minister Retno Marsudi, finance minister Sri Mulyani, cabinet secretary Pramono Anung and head of Capital Investment Coordinating Board Thomas Lembong.

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jokowi, trump meet on sidelines of G20 Summit

ANTARA News 10/07/2017

Presidents of Indonesia and the United States, Joko Widodo (Jokowi) and Donald Trump, held a bilateral meeting on the sidelines of the G20 Summit in Hamburg, Germany, on Saturday.

The meeting was held at the Hamburg meeting room Messe Und Congress, according to Chief of the Press, Media and Information Bureau at the Presidential Secretariat Bey Machmudin in a press statement released on Saturday.

"I would like to express greetings from millions of your fans in Indonesia. They are interested to welcome you to Indonesia," Jokowi remarked as an ice breaker of their talks.

He also expressed his appreciation to Trump for the visit by US Vice President Michael Pence to Jakarta some time ago. Pence's visit marked US commitment to strengthen ties with Indonesia.

During the meeting, enhancement of cooperation in the economic field and the eradication of terrorism were discussed.In the economic sector, Jokowi conveyed Indonesias concern regarding palm oil exports for biodiesel to the United States.

 

Jokowi also stated that Indonesia would import large amounts of soy. Both Jokowiand Trump agreed to promote mutually beneficial bilateral trade.

Indonesia's trade ties with the United States vary widely, ranging from palm oil and soy to airplanes.

the field of counter-terrorism, Jokowi expressed his appreciation to the United States for its commitment of not being hostile to Islam and cooperating with Muslim countries to combat terrorism.

This is in line with the results of the Riyadh Summit attended by both the leaders last May.

 

"We must pay extra attention to reduce the movement of ISIS not only in Syria and Iraq but also in other areas, including Southeast Asia. The assault and occupation of terrorist groups in Marawi, Philippines, is a testament to the growing threat of terrorism.

 

Jokowi further expressed hope that the counter-terrorism cooperation, through the exchange of intelligence information, the cessation of the flow of funds, community development, and deployment of moderate counter-narrative, can be done by both countries.

Before winding up, Jokowi invited Trump to visit Indonesia. 

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