Friday, April 27, 2012

Indonesia wants Singapore Government double standards to stop

Indonesia’s central bank said it wants equal treatment for Indonesian banks to operate in Singapore as a condition for the approval of DBS Bank’s bid for Bank Danamon Indonesia.

Bank Indonesia deputy governor Halim Alamsyah said in Jakarta on Wednesday that it will seek talks on reciprocity with Singapore.

The Monetary Authority of Singapore (MAS) declined to confirm if these talks have started, stating on Wednesday: ‘Our dealings with other regulators are confidential.’
Background story

DBS chief executive Piyush Gupta said he remains “fairly confident” about getting the nod from Indonesian regulators in the next six months.

He added that rejecting the DBS deal could be a big blow to investor sentiment in Indonesia.

DBS said in a statement on Wednesday that it will work closely with Indonesian regulators to ensure the process runs smoothly and meets all regulatory requirements.

“Given the way the Indonesian laws are structured, the bank is fairly confident and hopeful that it will receive approval within the second half of the year,” the statement said.

However, the bank is also “mindful of possible headwinds including the issue of reciprocity.”

The MAS noted on Wednesday that there are four Indonesian banks with a presence in Singapore.

Of these four, only Bank Negara Indonesia has a full banking licence. This allows it to offer a wide range of services for retail and corporate clients.

But foreign banks with full banking licences are restricted in how extensive their branch and ATM networks can be.

Of the three other banks, Bank Mandiri operates as an offshore bank while Bank Central Asia and Panin Bank both have only one representative office here.

The MAS spokesman added that ‘all foreign banks are free to expand their activities in Singapore subject to the guidelines specific to the licence under which they operate’.

On April 2, DBS offered to buy Jakarta-based Bank Danamon for up to $9.1 billion, in the biggest takeover by a lender in South-east Asia. DBS will buy a 67 per cent stake in Danamon from a unit owned by its own substantial shareholder, Temasek Holdings.

It will pay $6.2 billion in shares for this stake and make a general cash offer for the rest of the Danamon shares, paying 7,000 rupiah a share, or $2.9 billion. The deal values Danamon at $9.1 billion in total.

Under Indonesian law, DBS will have to sell shares of Bank Danamon Indonesia back to the public if it owns more than 80 per cent of the lender after a takeover.

DBS Bank filed a notice with the Singapore Exchange last week stating that it will have to ensure it holds no more than 80 per cent of Danamon shares within two years of the acquisition unless it gets a waiver or extension from the Indonesian authorities.

Danamon has a network of 3,000 branches and a customer base of six million, and is Indonesia’s sixth-largest bank by assets. This will allow DBS to tap Indonesia’s fast-growing economy.

The Indonesian economy grew 6.46 per cent last year, and is forecasted to grow 6.5 per cent this year.

DBS shares lost seven cents to close at $13.19 on Wednesday.

Danamon shares remained unchanged at 6,300 rupiah.


Concerns over call for reciprocity
PETALING JAYA: Bank Indonesia's statement on reciprocity has brought back concerns that had earlier also been an issue of contention among Indonesian banks with regards to their ability to operate and grow in Malaysia.
The Indonesia central bank reportedly said on Tuesday that it wanted “equal treatment” for Indonesia banks to operate in Singapore and would discuss with the city-state on reciprocity as a criterion for its approval on Singapore's DBS group to buy the country's sixth-largest bank, PT Bank Danamon Indonesia.
At the moment, there are certain restrictions on foreign banks operating in Singapore such as a limit on the number of automated teller machines and locations the banks are allowed to operate there, according to analysts covering the sector in the city-state.
The Indonesian banking scene is more liberalised with less limitations in comparison after it opened up its banking sector post Asian financial crisis as a way to encourage foreign investments and mend its then broken economy.
Requirement: Bank Indonesia says it wants ‘equal treatment’ as a criterion for its approval on DBS’ bid to buy Bank Danamon. – Reuters

Cheah King Yoong, a banking analyst at Alliance Research, said the Indonesian market was one of the “must-have markets” for local banks which wanted to continue to grow given the level of maturity present in the industry here.

Saturday, April 21, 2012

Petronas bekukan syarikat-syarikat Sarawak dan Sabah dari kontrak?

License freeze, Sabah O&G contractors in the cold| November 4, 2011
It's ironic that Petronas' RM45 billion O&G project in Sabah may not have local contractors' participation.
KOTA KINABALU: National oil company, Petronas’ decision to put a freeze on upstream oil and gas industry license renewals and registrations will basically block Sabah O&G contractors from competing for its RM45 billion mega project contracts.
Integral to Petronas’ RM45 billion plan is the Sabah-Sarawak Integrated Oil and Gas Project which encompasses upstream development of offshore O& G fields and downstream development of Sabah Oil and Gas Terminal and the Sabah-Sarawak Gas Pipeline.
Petronas’s announcement was received with mixed feelings in Sabah and excitement simmered among local contractors who saw it as a sound business opportunity.
But any prevailing enthusiasm over the RM45 billion project hit a wall recently when Petronas informed contractors that there was a freeze of license renewals.
According to Malay Chambers of Commerce Sabah president Awang Buhtaman Awang Mahmun, Petronas had last month sent out letters to contractors saying they were suspending the renewals of licenses and registration of applications.
He said the reason given in the letter was that Petronas was upgrading its database.
A disappointed Awang Buhtaman said there had been a lot of interest among local contractors ever since Petronas announced the mega project.
“We have seen a lot of interest and our contractors are willing to bid for contracts and be part of the project.
“But now with the suspension on license renewals, it makes it impossible for us to participate in the project.
“An active license is important if you want to participate … we are expecting a lot of invitations to bid in January but with the renewal of licenses suspended, it will not be possible for us to take part,” he said.
Petronas too stringent
Petronas is replacing its existing system with a new license and registration application system. The new system will take effect in January.
In preparation for the smooth implementation of the new system, Petronas had frozen all applications for new licenses and registrations beginning Oct 1 until the end of the year.
Awang Buhtaman said that although they received Petronas’ letter there has been no briefing yet on the new system
He also raised contractors’ concerns over the lack of vendor development programme (VDP) in Sabah.
He said Petronas, strangely enough, did not have a physical registration and renewal counter Sabah and contractors wishing to register or renew had to fly to Kuala Lumpur to do it.
“Petronas is very stringent. If a document is missing we are required to reproduce the whole set instead of just the document.
“Currently we have to do the documentation manually and fly to Kuala Lumpur to renew our licenses. The process takes a long time and is a lot of hassle,” he said.
While he urged Petronas to lift the freeze on renewals, he also added that it was time Petronas introduced an instrument to enhance the participation and capacity of local Sabahans to start off with the VDP in Sabah.

Sunday, April 15, 2012

Gas discovery to boost Sarawak’s O&G scene

by Ronnie Teo, Posted on February 15, 2012, Wednesday

NATURAL RESERVES: Image of one of Petronas’ platforms off the coast of Malaysia. The new discoveries amount to an estimated recoverable reserve of almost four trillion cubic feet, almost four per cent of Malaysia’s current natural gas reserves of 14.8 million barrels of oil equivalent. – AFP photo
KUCHING: Petroliam Nasional Bhd’s (Petronas) two new gas discoveries offshore Sarawak will continue to fuel the excitement for oil and gas investments in and around the state.
According to an analyst from AmResearch Sdn Bhd (AmResearch), while these new gas finds would need another three to five years of analysis and interpretation of seismic data before progressing to the initial development phase, this would certainly provide excitement to the industry here.
“Sarawak is a major state gas producer and exporter, with the country’s only liquefied natural gas plant located in Bintulu,” the analyst highlighted.
“Over the next twelve months, we expect Shell’s massive oil recovery projects in the Baram Delta off Sarawak to gain prominence. This involves the Bokor, Bakau, Baram, Baronia, Betty, Fairley Baram, Siwa, Tukau and West Lutong oilfields.”
To recap, Petronas on Monday announced two gas discoveries in the Kasawari and NC8SW fields in Block SK316 offshore Sarawak using exploration wells Kasawari-1 and NC8SW-1.
These were the latest wells drilled in Block SK316 which was part of Patronas’ strategy to intensify domestic exploration and prolong its reserves.
These discoveries amounted to an estimated recoverable reserve of almost four trillion cubic feet, almost four per cent of Malaysia’s current natural gas reserves of 14.8 million barrels of oil equivalent.
Oil and gas analyst from OSK Research Sdn Bhd Jason Yap believed this was good overall for the oil and gas industry in Malaysia.
“Generally, this will leave a positive impact for the industry, especially for local service providers,” he outlined in a telephone interview.
“They currently have a utilisation rate between 50 to 60 per cent. With this move, it could be boosted to more than 70 per cent.
“So for calendar year 2013, this will definitely be the year for oil and gas,” he enthused.
In the nearer horizon, AmResearch’s oil and gas analyst anticipated more fresh news from Petronas, particularly on its RM15 billion fast-tracked programme to develop gas reserves from a cluster of fields in the North Malay basin off Peninsular Malaysia.
“This project is expected to commence production towards the end of 2013,” he highlighted.
“Initial beneficiaries for the North Malays basin development will be fabricators such as MMHE, Kencana Petroleum Bhd, SapuraCrest Petroleum Bhd and Dialog Group Bhd,” he added.
“Also, UMW Oil & Gas Corporation Sdn Bhd, which provides oil country tubular goods and pipelines and rig services, as well as Wah Seong Corp Bhd which provides gas compression modules and pipe-coating services, could likewise benefit from this.”

Monday, April 9, 2012

Petronas and Total study potential of K5

Borneo Post March 29, 2012, Thursday
KUCHING: Petronas signed a Heads of Agreement (HOA) with Total of France to jointly study the development and production potential of K5, a high carbon dioxide gas field offshore Sarawak. Discovered in 1970, the gas field K5 has 70 per cent carbon dioxide content and it is located approximately 230 kilometres from Bintulu in water depth of 80 metres.
Petronas said in a press statement yesterday that K5 would be the first gas field with more than 50 per cent carbon dioxide content to be developed in Malaysia.
Under the HOA, Petronas’ newly established upstream research unit Exploration and Production Technology Centre and Total would explore the possibility of developing the field in ways that were technically, commercially and environmentally viable. The HOA was signed at the Kuala Lumpure Convention Centre where Petronas was represented by Petroleum Management vice president Ramlan Abdul Malek and Total was represented by Total E&P Malaysia general manager Vincent Dutel.
The scope of the study would also include the development of carbon dioxide management technologies in the area of carbon capture, transportation and sequestration.
The study was set to commence immediately and would take 15 months to complete.

Wednesday, April 4, 2012

Sarawak’s total trade volume grows to RM92 bln in 2012

Borneo Post March 3, 2012, Saturday

SIBU: Malaysia’s total trade posted RM1.27 trillion last year, representing an increase of 8.7 per cent over the previous year, said Deputy Minister of International Trade and Industry Datuk Jacob Dungau Sagan.
“This is the highest trade figure we have ever achieved, and it is also our 14th consecutive year of trade surpluses,” Sagan said when officiating at the Malaysia External Trade Development Corporation’s (Matrade) programme with entrepreneurs and exporters at a leading hotel here yesterday.
He added, “The trade with Myanmar rose 115 per cent, Indonesia (23 per cent) and Cambodia (20 per cent) giving an indication perhaps, of where business potential might lie.”
“We also saw increase in our trade with Australia, Japan, the Peoples Republic of China and the Republic of Korea. The Peoples’ Republic of China is currently our largest market, making up a total of RM91 billion or 13 per cent of our exports.
“Singapore comes in second with RM88 billion and Japan is in third place with RM80 billion,” Sagan said in his text of speech read out by deputy chief executive officer (CEO) of Matrade Datuk Zakaria Kamarudin yesterday.
He, however, noted exports to America declined by 2.8 per cent, reflecting the sluggish state of its economy.
Trade with Asean neighbours represented 24 per cent of the country’s export, he noted, adding that declines were registered with Singapore, Thailand, Vietnam, the Philippines and Laos.
On the local front, the deputy minister observed Sarawak’s own trade volume grew by 24 per cent last year to post RM92 billion, representing some seven per cent of Malaysia’s total trade globally.
He disclosed, “Exports totalled RM80 billion and imports RM12 billion. Sarawak’s major exports were mineral liquefied natural gas (LNG) (51.3 per cent), crude petroleum (22.6 per cent), and palm oil (8.5 per cent).
“And its major markets were Japan, Taiwan, Korea and China. Investments in approved projects in the state last year were valued at RM8,453 million. Sarawak ranked third, after Penang and Selangor, in this category.”
According to Sagan, it was envisaged that these 43 manufacturing projects (29 new and 14 expansion projects), would create about 4,900 jobs in Samalaju, Tanjong Manis, Sejingkat, Pending, Muara Tabuan, Sibu, Kuching, Kemena and Bintulu.
He pointed out that most of the approved manufacturing projects were basic metal products, chemicals and chemical products, fabricated metal products, transport equipment and wood and wood products.
On a related matter, to increase exports, Malaysian companies, he stressed, needed to be more aggressive in export promotion.
To this, he assured, “Matrade will continue to assist you through its network of 43 offices around the world as well as through its various promotional programmes.”
Among the programmes, Inward Buying Mission (IBM) allocation helped companies, especially SMEs, to reduce the cost of travelling overseas to meet buyers.
As such, those yet to register with them were urged to do so, enabling them (registered companies) to have direct access to the latest market information, trade leads, and trade programmes and activities where they would be kept posted.
“This year, Matrade will be undertaking 121 trade promotion activities. These include participation in International Trade Fairs, specialized marketing missions, trade and investment missions as well as incoming buying missions.”
As such, he urged the private sector, especially the SMEs to participate actively.