U.S. firms commit $2b in investment

U.S. firms commit $2b in investment

By Fabiola Desy Unidjaja

HOUSTON, Texas (JP): Giving hopes of an economic boost,
American companies have made a commitment to invest more in
Indonesia provided that the government can guarantee legal
certainty and security.

During a meeting with President Megawati Soekarnoputri here on
Sunday, 10 American companies -- mostly oil and gas companies --
made a commitment for new investment totaling US$2 billion,
according to presidential economic adviser Frans Seda.

Seda, however, declined to elaborate.

Nevertheless, executives of Conoco Oil and Freeport Mc Moran,
both with strong interests in Indonesia, expressed their
intention to increase their investment in the country.

Conoco senior vice president J. Michael Stinson stated that
the company -- that has interests in the West Natuna gas field in
Riau -- intended to join the bidding for 17 new oil and gas
blocks offered by the government during the meeting.

Freeport chairman and chief executive officer James R. Moffet,
said that the company had invested a total of $6 billion in its
giant copper and gold mines in Irian Jaya alone and was prepared
to invest more in Indonesia's eastern-most province.

Both Stinson and Moffet, however, spoke about the importance
of the Indonesian government having stable and predictable
regulations.

They mentioned the complications involved in the
implementation of the new autonomy law, tax regulations as well
as labor laws and regulations.

"Indonesia will be one of the best places (for companies) to
put money if you have a stable and predictable tax environment,
law respecting human resources and workers. Then it will be
conducive for foreign investment," said Stinson.

The government, Stinson added, had also to make sure that all
bureaucratic processes were rational and if possible they be
pooled under one roof to make it more convenient for investors to
do business in the country.

"We have to have all those things. Otherwise, investors will
be reluctant to come to the country," he remarked.

James R. Moffet also spoke about regional autonomy, especially
the special autonomy bill for Irian Jaya currently being
deliberated.

Moffet, nevertheless, expressed Freeport's readiness to work
under the planned special autonomy law, that would give much of
the revenue from mineral exploitation to the province.

"The regional autonomy law is like other laws. We will work
with it," Moffet said.

Meanwhile, Texaco Inc. chairman Glenn F. Tilton, who also
attended the meeting with the President, brought up the
importance of bringing uniformity in investment regulations that
seemed to be negated by the autonomy law.

Therefore, he suggested that the current drafting of the new
investment bill focus on creating uniformity in investment,
especially to deal with possible confusion in the implementation
of the autonomy law.

"We appreciate the efforts of the Indonesian government to
bring uniformity for investment opportunity in Indonesia ... We
will avail of what Indonesia has to offer," Tilton said after the
meeting.

ExxonMobil Oil Corp. executive vice president Harry J.
Longwell highlighted the importance of security being guaranteed,
especially in restive areas such as Aceh, which is the heart of
its operation in Indonesia.

He noted that ExxonMobil suspended its operation for four
months due to security reasons and it would take some time to
resume full operations in Aceh.

"We have secured the operation at this time and we have an
ongoing understanding that security is the responsibility of the
government and they are handling it," Longwell said after meeting
Megawati.

Speaking at the opening of the Houston Energy Dialog on
Sunday, Megawati stressed once again the government's commitment
to protect foreign investment and at the same time underlined the
importance of the need for companies to work with local people to
improve their welfare.

Megawati invited oil and gas companies to invest in Indonesia,
promising a more stable and conducive investment climate under
her administration.

She noted that the House of Representatives had just passed
the oil and gas bill into law, giving more room to private
investors to play a greater role.

"I am not here to make empty promises. But I can assure you of
my determination ... What I can promise you is very modest: Do
come to Indonesia and we will warmly welcome you," she ended her
speech.