Just Economic Info

State Enterprises Minister Mustafa Abubakar said that state-owned oil firm Pertamina was able to increase its oil and gas lifting from 182,000 barrels per day (bpd) to 200,000 bpd by maximizing its existing oil and gas fields.

"I hope that Pertamina would maximize the production of Cepu field which so far has not yet been fully exploited," the minister said here on Sunday.

The minister said he had asked the board of commissioners of Pertamina to make efforts so that Pertamina would be able to meet its production target.

He said that he had not yet received any report even if he had just had an audience with Pertamina commissioners. They had not yet talked about liquefied petroleum gas. They had talked about lifting.

Increasing gas lifting would depend on the operations of gas receiving terminals.

Pertamina and state-owned gas distributor firm PGN were asked to cooperate in managing the Arun gas stock tanks.

He did not provide details on funds needed for that purposes.

"What is certain is that a big fund would be needed. Pertamina has enough funds for the development of the upstream sector," the minister said.

Pertamina has allocated capital expenditure for 2010 amounting to Rp39 trillion, or a sharp increase of 56.4 percent from that in 2009 which stood at Rp22 trillion.

The increase in the capital expenditure is to support the increase in the number of new projects owned by Pertamina and the plan to develop new refinery plants.

Of the Rp39 trillion, 70 percent would be used for activities in the upstream sector, the remaining 30 percent would be allocated for down stream activities.

Mustafa said that in order to finance capital expenditure, the government was planning to issue bonds and ask for loans for working capital to boost oil production.

"So far, Pertamina`s oil lifting reached 182,000 bpd and is expected to increase to 200,000 bpd," the minister said.

The Indonesian and German governments held the first senior officials consultation meeting here on Monday to follow up the results of President Susilo Bambang Yudhoyono`s visit to Germany in December 2009.

The meeting discussed efforts to promote bilateral cooperation in various fields for the benefit of the two peoples` welfare besides regional and global issues of common interests, the Indonesian Foreign Ministry said in a statement.

Indonesia hoped the bilateral consultation would serve as a regular forum to explore the possibility of new cooperation between the two countries as well as to discuss possible hindrances to the realization of bilateral cooperation, the statement said.

Meanwhile, Germany deemed it necessary to hold the consultation meeting regularly, realizing that Indonesia was a large democratic country which had strong economy and influence in the region, it said.

The Indonesian delegation to the meeting was led by the ministry`s director general of America and Europe, Ambassador Retno L.P. Marsudi, accompanied by the chief of the Indonesian mission in Berlin, Ambassador Eddy Pratomo, director of western Europe Dewa Made Juniarta Sastrawan, and relevant officials of the ministry.

The German delegation was meanwhile led by the director general of Asia and the Pacific at the German Foreign Ministry, Ambassador Cyrill J. Nunn, accompanied by German Ambassador to Indonesia Dr. Norbert Baas, officials of the ministry`s directorate general of culture and staff members of the German embassy in Jakarta.

Indonesia and Singapore have agreed to form six working groups to intensify economic cooperation between the two countries.

The agreement was reached at a Leaders` Retreat meeting for three hours between Indonesian president Susilo Bambang Yudhoyono and Singapore`s prime minister Lee Hsien Loong at Botanic Garden here on Monday.

At a press conference at Hotel Shangrila that evening President Yudhoyono said the working groups were aimed at increasing cooperation in Batam, Bintan and Karimun in the fields of investment, air transportation, tourism, manpower and agri-business.

"Learning from past experience with the agreement future problems and obstacles could at any time be identified. In view of that we agreed to form six working groups to carry out cooperation in the economic fields," he said.

He said the working groups would be put under the coordination of Indonesian chief economic minister Hatta Radjasa while each group will be led by technical ministers concerned who would report periodically to their heads of state respectively.

The working groups set up with an aim of finding opportinuties for mutually beneficial cooperation would also involve regions because Singapore is not only interested in investing in Jakarta but also in other provinces, he said.

Regarding the cooperation in Batam, Bintan and Karimun Yudhoyono said Indonesia could obtain an added value from the establishment of the special zone because Singapore would not be able to expand its territory to meet its growing industries.

In view of that areas located around Singapore like Batam, Bintan and Karimun could take a benefit out of the situation, he said.

President Yudhoyono said closer cooperation with Singapore was also expected in the tourism and air transportation sectors especially with regard to the implementation of the Asean Open Sky policy in 2015.

In the field of manpower Indonesia hopes with the cooperation more skilled and professional workers from the country would get a place in the Singapore manpower market.

In the field of agribusiness President Yudhoyono said Indonesian vegetables and fruits now still contributed a small portion in the Singapore market.

Before 2014, Yudhoyono said Indonesia wished to take up to 30 percent share of the Singapore vegetable and fruit market.

Indonesia and Singapore have also established a working group to coordinate cooperation against terrorism threats in the region.

"The working group on combating terrorism has run and we wish it will be implemented more effectively," he said.

In the meeting President Yudhoyono emphasized Singapore`s important position as a strong partner in investment and trade.

The two leaders in the meeting did not discuss other issues other than economic and terrorism issues such as extradition agreement.

The trade between the two countries in 2009 reached US$25 billion which is the highest after with the US, Japan and China.Singapore`s investment in Indonesia in 2009 reached US$4.5 billion.

A general meeting of shareholders agreed to inject Rp55.4 billion into Riau Airlines to improve the company`s performance and for buying more planes.

President Commissioner of Riau Airlines Wan Syamsir Yus said after attending the general meeting of the airline company`s shareholders in Pekanbaru on Monday night that up to the end of December this year two planes will be used on hire-purchase basis in mid-June and early in July 2010 namely a Boeing 737-500 and Boeing 737-300 from Hong Kong.

The shareholders also agreed to the company`s plan on an operational cooperation with European companies in operating 14 Embraer ERJ 145 jets and seven Embraer E 170s.

The company`s management also had been asked to make a financial evaluation of a number of shareholder routes and a request that each new route will be served if meeting the requirements and income criteria of the new routes covering operational cost.

"The president commissioner has the task of controlling and reporting the developments of Riau Airlines once in every three months to the shareholders," Wan Syamsir said.

For the company`s internal improvements, he said the state airline company in Sumatra island also needs to conduct efficiency measures in various fields and managerial improvement like organizational restructuring, optimizing work, review of remunerations and use of operational expenses.

The Riau administration as majority shareholder of Riau Airlines said commitment to give a capital for performance improvements.

President Director of Riau Airlines Teguh Triyanto, who had been installed only five months ago as a pilot, said he will conduct external and internal reforms as agreed to in the shareholders general meeting.

"As employee, we are ready to give the best for the company and focus on improvement of services and fly to the regions of Sumatra island," said Teguh who was once Vice President of PT Garuda Indonesia.

The Batam Authority will seek other developers to build private apartment houses if those who had been granted land permits still had not started building their projects for lack of profit reasons.

"We will tell them to return the permits so that we could give them to truly serious developers," Director of Workers` Residences and Social Development of the Batam Authority Fitrah Kamaruddin said in Batam on Monday.

Right now it has been more than three years that 52 developers had control of plots of land of the Batam Authority for private apartment houses.

"It was only in Batam Centre Park that private developers cooperated with PT Jamsostek and State Savings Bank (BTN) in building apartment houses," he said.

Batam has a population of 1.025 million people, including 300 thousand industrial workers, but only 10 thousands of them have apartment houses.

Those who are not staying at the dormitories of their industries, had to rent type-21 houses, while subcontract workers are allowed to stay at room of shop houses.
In the meantime, some formal workers are staying or renting rooms in illegal residential complexes built on government land.

The Batam Authority, Fitrah added, has built apartment houses in strategic areas to enable the workers to reduce their transportation expanses, enjoy electricity, clean water, and security.

The Batam city administration has in mid-2009 completed the construction of four apartment buildings with 390 family rooms in Sei Harapan village, Sekupang, side by side with four apartment buildings built several years ago under the management of Batam Authority.

Some of the tenants of the Batam Authority apartment houses have moved to those of Batam city administration which Fitrah said were actually built for informal workers with wages of less than Rp 2 million per month.

"This is obviously to our detriment", he said.

The tenants of the formal sector, he said, disagreed with the consensus between the Batam city administration and the Batam Authority, namely that the Batam city administration apartment houses in Sei Harapan were built to remove the illegal houses.

The Batam Authority has repeatedly warned the management of the Batam city administration apartment houses in Sei Harapan to obey the agreement and the task of removing the illegal settlements.

"No improvements are in sight, except promises," Fitrah said.