State mining and energy firms told to improve efficiency

JAKARTA (JP): President Soeharto has urged state mining and energy companies to become more efficient and called for a nationwide drive for power conservation.

"The mining and energy sector, which is very strategic for developing our industries as well as for attracting new investments and generating foreign exchange earnings, needs more efficient and effective management," the President said in his speech at the opening of a three-day workshop at the Ministry of Mines and Energy at the State Palace yesterday.

He said that the government is aware that oil prices are still declining and "I don't think that the prices will soon recover," he said.

Given this fact, he said that production costs need to come down.

Wile oil prices fluctuate at between US$13 and $14 per barrel, Pertamina claims that its production costs range between $6 and $8 per barrel.

Minister of Mines and Energy Ida Bagus Sudjana said that his ministry is committed to streamlining licensing procedures for investment in mining and energy.

The meeting yesterday proceeded at Pertamina's headquarters after the opening ceremony at the State Palace. Today, Coordinating Minister for Economy and Finance Saleh Afiff and Sate Minister of Administrative Reforms T.B. Silalahi, are scheduled to address around 360 officials.

The director for private electricity affairs at the Directorate General of Electricity, Moeljadi Oetji, told The Jakarta Post that the planned efficiency improvements will be also implemented in the procedures for licensing power projects.

"Procedures for the licensing of the construction of a gas- fueled electricity plant, for example, still take around 1.5 years and coal-fired and geothermal power plants take four years each," he said.

President Soeharto suggested that Indonesia accelerate diversification of energy production and utilization to reduce dependence on oil, the reserves of which are limited.

The operation of diesel plants by industry, for example, should be reduced gradually because electricity supplies by the State Electricity Company (PLN) have been increasing.

"We are no longer in an electricity crisis and the operation of diesel powered generators by industrial plants should be gradually reduced for the benefit of the nation and the companies themselves," Soeharto said. (fhp)