Mining, energy ministry to limit loans in yen<\/p>\n
JAKARTA (JP): The government will limit financing the
\ndevelopment of Indonesia's mining and energy industries with yen-
\ndominated loans in order to decrease the risk caused by the
\nappreciation of the Japanese currency, a minister says.<\/p>\n
Minister of Mines and Energy Ida Bagus Sudjana said over the
\nweekend that his office is minimizing the use of yen to finance
\nprojects to avoid increasing the government's debt burden. The
\ncountry's debt increased unexpectedly following the steady
\nappreciation of the Japanese yen against other major currencies,
\nespecially the U.S. dollar.<\/p>\n
\"We are trying very hard not to use yen for our projects.
\nInstead, we try to use U.S. dollars in any contracts involving
\nforeign partners, including those from Japan,\" Sudjana said after
\nclosing a three-day workshop of officials from the Ministry of
\nMines and Energy.<\/p>\n
According to official data, Indonesia's foreign debt stood at
\nUS$87.6 billion as of last December, including $58.6 billion owed
\nby the government and $29 billion by private and state-owned
\ncompanies. Over 40 percent of the debt was in yen.<\/p>\n
Economists estimate that every time the yen rises one percent
\nagainst the U.S. dollar, it adds at least $300 million to
\nIndonesia's outstanding debts.<\/p>\n
Sudjana said exports of oil and gas, which account for 25
\npercent of the country's total exports, are mainly paid in
\ndollars.<\/p>\n
\"All our oil and gas export contracts have so far been made in
\ndollars. As all international prices for oil and gas are stated
\nin dollars, it is worthless to change our export contracts into
\nyen,\" Sudjana said.<\/p>\n
Oil exports<\/p>\n
Indonesia's oil and gas exports decreased by 0.53 percent to
\n$9.69 billion last year. Japan bought the largest portion, $5.4
\nbillion, of Indonesia's oil and gas.<\/p>\n
Sudjana indicated that Indonesia's oil and gas exports will
\ndecrease further in coming years and Indonesia will become a net
\nimporter of oil after the year 2000 if new oil and gas reserves
\nare not found.<\/p>\n
He suggested that Indonesia begin diversifying its energy
\nsources to meet growing energy needs. Currently, he said,
\nIndonesia is relying heavily on oil energy because it has not yet
\nmaximized the utilization of coal, gas and geothermal resources.<\/p>\n
\"Energy, especially electricity, is an essential factor in the
\nindustrialization process. So we need to consider maximizing the
\nuse of gas, coal and geothermal energy to generate electricity,\"
\nSudjana said.<\/p>\n
Since 1981, Indonesia's gas production has increased seven
\npercent per annum. Last year, Indonesia produced a daily average
\nof 8.06 billion cubic feet, of which 56.6 percent was exported in
\nthe form of liquefied natural gas (LNG).<\/p>\n
The largest use of gas in Indonesia has been for the
\npetrochemical industry, accounting for 6.8 percent of the total
\nnational gas output. Currently, only a limited number of local
\ncompanies, including state-owned steel company PT Krakatau Steel,
\nstate-owned electricity company PT PLN and a number of private
\ncement companies, use gas as fuel.<\/p>\n
Director General of Oil and Gas Suyitno Patmosukismo said his
\noffice will initiate the development of an integrated gas
\npipeline to distribute gas to industries.<\/p>\n
Suyitno said the first phase of the pipeline project is
\nexpected to be completed next year. \"The first phase of the
\nproject, if successful, will save up to 64,000 barrels of oil a
\nday,\" he said.<\/p>\n
In addition to gas, he explained that his office is also
\npromoting geothermal energy. \"We can only use this energy to
\ngenerate electricity. If we can increase the use of it, we can
\nsave more oil and delay becoming a net importer of oil,\" he said.
\n(rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mining-energy-ministry-to-limit-loans-in-yen-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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