Chinese investment helpful for Indonesian energy sector: businessman

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Last updated at: (Beijing Time) Wednesday, December 17, 2003

Chinese investment helpful for Indonesian energy sector: businessman

The local unit of China's oil firm PetroChina in Indonesia plans to offer a bid for the tender of Indonesian government's 10 oil and gas blocs, an executive has said.

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The local unit of China's oil firm PetroChina in Indonesia plans to offer a bid for the tender of Indonesian government's 10 oil and gas blocs, an executive has said.

"We are still assessing the 10 blocs offered by the Indonesian government. We plan to open a bid," Wei Zhigang, president director of PetroChina in Indonesia, was quoted Tuesday by Bisnis Indonesia newspaper as saying.

The 10 oil and gas blocs are dispersed in the provinces of Aceh,Banten, East Java, Maluku and Papua.

Indonesian Minister of Energy and Mineral Resources Purnomo Yusgiantoro said earlier the government welcomed to deliver their bids, adding that the new blocs were intended to offset the lack of gas supply due to conflicts in gas-rich Aceh province.

PetroChina would possibly face competition from PT Caltex Pacific Indonesia, which also indicated to join the tender, the newspaper said.

Executives of PetroChina, Caltex and PT ConocoPhilips Indonesiagathered Monday at the parliament building to have a hearing with a commission of the House of Representatives.

On the occasion, Wei told legislators his company would contribute a total of 165 million US dollars to the Indonesian government revenue this year. The figure constitutes an increase over the last two years' 65 million dollars and 127 million dollars, respectively, he said.

Caltex president Humayun Bosha meanwhile said Caltex would invest between 300 million dollars and 400 million dollars next year in efforts to increase oil output to 515,000 barrels per day.

He claimed the share for government revenue had reached an average of 2 billion dollars over the past three years.

Foreign oil and gas producers are operating in Indonesia based on the production sharing contracts with the government, under which the government must compensate contractors' recovery costs, thus taking away revenues it gained from the contractors.

Chinese investment in oil and gas industries in Indonesia will help improve host country's investment climate and reduce reliance on traditional investors, a noted Indonesian businessman said Wednesday.

"Chinese investment in oil and gas industries will help make investment climate in the sector more competitive, efficient and effective," Indonesian Construction Association chairman Sucipto was quoted as saying by the official Antara news agency.

He also said the growing investment by Chinese firms will reduce Indonesia's reliance on a few countries which so far have been controlling Indonesia's oil and gas resources.

Besides investment and technological advances, China also is a big market for Indonesian liquefied natural gas (LNG) exports, he added.

China awarded Indonesia with a 25-year LNG supply contract to Fujian province worth 8.5 billion US dollars last September, underwhich Indonesia must supply 2.6 million tons of LNG a year starting in 2007.

Both countries have established the China-Indonesia Energy Forum, which facilitates Chinese investments worth hundreds of millions of dollars in oil, mining and power sectors in Indonesia.

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