The Jakarta Post, Jakarta

The government said it may replace one or two of the five deputy chairmen at the Indonesian Bank Restructuring Agency (IBRA), seemingly in contradiction of IBRA's earlier claim of no plans for another reshuffle. "We might replace one or two, but I think not all of them because we don't want to disrupt continuity," State Minister of State Enterprises Laksamana Sukardi told reporters on Thursday. Laksamana is in charge of appointing IBRA deputies as his office supervises the agency. A day earlier, IBRA's newly appointed chairman Syafruddin A. Temenggung introduced changes to IBRA's organizational structure, but denied that he would also replace its deputies. Syafruddin may propose the deputies, but the final say rests with Laksamana. According to Laksamana, Syafruddin mentioned to him earlier about replacing some of the deputies. "This depends on him (Syafruddin), we haven't had any formal talks on this yet. Important is that his team is solid," he said. IBRA has five deputies whom Laksamana appointed last December when the agency was chaired by I Putu Gede Ary Suta. Laksamana said replacing the deputies should help Syafruddin work at the agency. He is the seventh chairman IBRA has had in the last four years. On Wednesday the government also appointed Lukita D. Tuwo as the new secretary to the Financial Sector Policy Committee (FSPC). The post was previously held by Syafruddin. The FSPC supervises debt restructuring and asset sales talks that have a value of more than Rp 1 trillion (about US$106 million). IBRA controls some Rp 600 trillion in assets, which it took over from failing banks after bailing them out during the late 90s financial crisis. Locked inside IBRA, these assets add little to the growth in the economy, while if released -- i.e. sold to private investors -- and better managed under the private sector, they may be able to contribute more. With only about one-third of those assets sold off, IBRA may have a tough time unloading the remaining two-thirds before its six-year mandate expires in less than two years.

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The Jakarta Post, Jakarta

BP Kangean, a unit of British American oil and gas firm BP Plc., has finally agreed to release its privilege status in the supply of gas in East Java, according to a reliable source. The source said on Thursday that the agreement was reached last week during talks with the government. "BP (Kangean) agreed at the end of last week to release its privilege (status)," he said. The government had been negotiating with BP to end the privilege status as the company could no longer supply sufficient gas to the East Java province due to depleting reserves. Ending BP's concession would allow other players to enter the East Java gas market, thus avoiding an imminent gas shortage which could disrupt the operation of large industries in the province including the power plan unit of state-owned electricity company PLN. BP Kangean, under a contract signed by Pertamina in 1980, holds a concession to supply gas from the adjacent Pagerungan island via underwater pipeline to East Java at 600 million standard cubic feet per day (mmscfd) until 2010. According to the contract, other companies are only allowed to deliver gas in the province if demand exceeds 600 mmscfd or if BP is temporarily unable to provide sufficient supply. But BP Kangean may not be able to meet its gas supply contract for much longer as its gas production had been declining due to a depletion in gas reserves. BP Kangean gas output stood at 300 mmscfd in September last year, but was down to 259 mmscfd in February this year. The government has said that several gas companies including Pertamina, Amerada Hess, Kodeco, and Mobil Cepu and Madura had expressed readiness to supply gas in East Java. Some of the companies are ready to supply gas starting mid-2003. The source said the government was still considering to guarantee the market for BP's gas once its gas output increase again. The government originally projected a gas shortage in East Java to occur in 2004. But PLN claimed that the gas shortage had already occurred since the beginning of this year, forcing the company to seek industrial diesel fuel as a substitute. Pertamina has also said that it would import diesel fuel to anticipate the fuel shortage.

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