Land of hope and promise

Land of hope and promise

For many outsiders, this natural resource-rich province is all
about oil, gas, black orchids, the pesut Mahakam (freshwater
dolphin), rhinoceros hornbills, orangutans, and the Dayak tribe.
For locals, it is their land of hope, particularly with the
nationwide implementation of the regional autonomy which was
launched a week ago. The Jakarta Post proudly brings this page
in line with the 42nd anniversary of East Kalimantan today.

JAKARTA (JP): The bell that signaled the implementation of the
regional autonomy has been echoing across the country.

In East Kalimantan, one of the country's biologically and
culturally-rich provinces, the bell has given much, if not great,
hopes to the local people of all walks of life.

Many believe the new scheme, which will amplify the revenue of
the province and empower local administrations would soon bring
substantial changes to the province's development and improve the
people's lives.

For decades, the locals wished they could have a greater share
of the province's earnings from, for instance, oil, gas and
fertilizer production, as these were mostly directed to Jakarta.

An East Kalimantan governor, while delivering a speech to
students of Mulawarman University back in the early 1990s, said:

"Our current annual budget is equivalent to the value of a
full load of fertilizers in an ocean liner.

"How many ships fully loaded with fertilizers, gas, and oil
depart from the Bontang seaport per month? So, can you imagine
what this province would be like if all the revenue collected
from these shipments went to the provincial budget," the governor
said.

This was said some 10 years ago.

East Kalimantan which is one-and-a-half times the size of Java
and Madura islands, has for years served as a economic and
geographic gateway to other places on the island of Kalimantan.

At its northern border lies Sabah (a Malaysian state). It's
also a short fly away from Brunei Darussalam and Sarawak (another
Malaysian state).

Tropical rainforests cover some 80 percent of this province.
It also has nature and wildlife reserves.

Rattan vines in East Kalimantan could grow up to 200 meters
long.

Common animals found in this province include the bekantan
(Nasalis larvatus) and chimpanzees (Pongo pygmaeus).

The island's indigenous Dayak tribe live in the hinterlands.
Some of these communities have not been touched by modernity.

According to Discover Indonesia, the Dutch first came to the
area for trade in 1635 in a flotilla. They landed in Kutai, now
considered the richest regency in Indonesia.

In 1933, a Dutch firm began mining oil in Tarakan and Bunyu
Islands.

When the Japanese soldiers planned an attack on Indonesia in
1942, they picked Tarakan Island as the point of entry, aiming to
take over the oil fields.

The province, now under the governorship of Suwarna Abdul
Fatah, regularly holds ceremonial feasts, which includes the
Pesta Erau to mark the harvest season and as an expression of
gratitude.

Thousands of visitors usually flock to Tenggarong, capital of
Kutai regency, to witness the annual ceremonies, which include
the floating of a "dragon" on the 920-kilometer long Mahakam
River.

East Kalimantan has four major cities, with Bontang --
located under the administration of Kutai regency -- as the most
economically successful.

A bright treasure

LNG or liquefied natural gas is one of the most valuable
treasure of Indonesia. Did you know that in 1986, Indonesia was
already taking a surplus of LNG from Bontang and shipping it
24,000 km to Boston, the U.S.? It was the longest LNG voyage
ever, and only the second spot sale of the 1980s.

LNG has affected Indonesia in another more subtle way. It has
opened new doors to international relationships, especially in
the Asia-Pacific region, that otherwise might not have occurred.
Indonesia's oil began paving the way as early as the late 1950s,
when Pertamina arranged the first shipment of crude oil to Japan.

As a major producer of oil and timber, East Kalimantan is at
present the most industrially advanced province of the island.

Oil and natural gas are found along the entire east coast,
with refineries centered at Balikpapan and Bontang.

East Kalimantan natural gas reserves are in Muara Badak
District, Kutai Regency. In 1972, its exploitation potentials
began, carried out by Pertamina, and Huffco as the appointed
contractor on royalty basis.

To market the gas, Pertamina built the first Indonesian
liquefield natural gas plant in Bontang -- with an area of 40,670
sq. km and population of 73,533 distributed over five districts
-- from production to shipment in insulated containers to buyers
in Japan. Shipments in specially built tankers, each capable of
carrying 125,000 cubic meters of LNG, began from Bontang in
August 1977.

Bontang's potential is its richness in natural gas resources,
hence, large industries as in urea fertilizer and amoniac have
been established here.

The gas fields which supply gas to the Badak LNG Plant in
Bontang are Badak, Samberah, Nilam and Mutiara, which are
operated by Vico; Handil, Bekapai pal, Tambora, Tunu and Peciko
fields are operated by Total Indonesie; Attaka and Kerindingan
fields are operated by Unocal.

At the beginning, Bontang was but a small fishing village with
7,000 inhabitants. Statistics show an increase of 17 percent a
year, mainly caused by migrants originating from the neighboring
area and coming from other islands.

This region not only has large quantities of oil and natural
gas. Kaltim Prima Coal is the Indonesia company for BP p.l.c. of
England and RTZ-CRA England-Australia. In 1982, an agreement was
signed between KPC and PT Batubara Bukit Asam, an Indonesian coal
company.

In the mining area, Kelian Equatorial Mining Company (KEM)
(Indonesian partner) in cooperation with Rio Tinto Ltd.
Australia, together hold 90 percent share, with the remaining 10
percent belonging to PT Harita Jayaraya, Indonesia. The Kelian
Gold project is a Contract of Work between the Indonesian
government and KEM that was signed on Feb. 27, 1985, entitling
KEM to full management and responsibility throughout its mining
areas and in the operation.

Fast Facts

Size: 211,440 square km; Major cities: Balikpapan, Tarakan and
Bontang; Places of Interests: Mahakam River, Tanjung Harapan beach,
Tanjung Isuy ( Dayak Benuaq settlement), and Kersik Luay nature
reserve; Population: 2.52 million; International Airport: Sepinggan
in Balikpapan; International Seaport: Semayang in Balikpapan;
Primary products: Oil, gas, timber, coal, and fisheries;
Foreign tourists: 27,000 (in 1999)