[Kabar-indonesia] 13 oil/gas/mining reports: Pertamina-Sinopec Deal; PT Smelting [+Platts; NYT]

[JoyoNews at aol.com]

13 Reports:

- Indonesia says Dumai oil refinery
    running at 70pct
- Indonesia's Pertamina resets meeting 
  with Sinopec on E. Java refinery project
- NST: CIMB, Indonesian banks arrange 
  financing for oil firm
- Platts: Pertamina unlikely to issue 
  sweet crude tender this month: source
- Platts: Indonesia invites India's Nalco 
  to take control of Asahan smelter
- NYT: Brazil's Oil Giant Is Drilling Far 
  From Home Waters 
- Platts: PT Smelting's copper output 
  to fall 1.5% for year ending March 07
- Platts: Indonesia's GT Petrochem 
  to restart No 1 MEG plant on July 3
- Bisnis Indonesia: Bakrie Proposes 
  US$0.77 per MMBtu Toll Fee
- Share price of Indonesia's Antam 
  falls on ferronickel plant closure
- Platts: SEA phenol up $50/mt, 
  strong demand from Indonesian 
  plywood users
- Avocet Mining: 18.2M Resource 
  At Durian And Osela Deposit
- Petromindo Headlines, Thursday 
  and Friday, July 6 and 7, 2006: 

Indonesia says Dumai oil refinery running at 70pct

JAKARTA, July 7 (Reuters) - Indonesia's state oil company Pertamina
said on Friday its 120,000 barrel-per-day (bpd) Dumai refinery was
running at 70 percent of capacity due to lingering problems at its
vacuum unit which should be resolved by Saturday.

"We expect to restart the vacuum unit on Saturday, currently we are
repairing it," Suroso Atmomartoyo, processing director at Pertamina,
said, but declined to say when the refinery would return to full
capacity.

Last month officials said the Dumai refinery had cut operations to 60
percent of capacity due to a cooling problem, forcing the closure of
two gasoline units and the 85,000-bpd vacuum unit, which processes
residues into diesel and kerosene.

The company said on June 27 that capacity had recovered to 80 percent
and the larger 8,000-bpd platforming units had been restarted, but an
official said on Friday operations at the crude distillation unit had
fallen back to 70 percent.

"The vacuum unit at Dumai is still shut because of a technical
problem. Therefore, we are running the crude distillation unit at 70
percent at the moment," Atmomartoyo told reporters.

"We are still also shutting one platformer unit with a capacity of
6,000-bpd for repair for a few days," he added, but did not give an
exact timeframe.

Another Pertamina official, who declined to be identified, said the
firm has oil products stocks for 23 days.

"There is no plan to import more diesel oil at this moment, because we
have plenty of stock," the official said.

He said Pertamina has 22 days of gasoline stock, 21.7 days of diesel
oil and 29 days of kerosene.

Atmomartoyo said Pertamina expected to restart its 47,500-bpd Sungei
Pakning refinery, also located on Sumatra island, on Monday.

Pertamina shut Sungei Pakning refinery on June 20 for scheduled maintenance.

Indonesia will keep oil product imports at more than 12 million
barrels this month, a third more than expected, and maintain that
level into August due to refinery outages, industry sources had said.

Pertamina has bought 12.71 million barrels of oil products for July,
the highest since last October and slightly above the 12.36 million
barrels bought for June, one source told Reuters.

Indonesia, Asia-Pacific's only OPEC member, has nine refineries with a
combined capacity of around 1 million bpd, but they supply only about
70 percent of its domestic oil products consumption. The rest is
imported.

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Indonesia's Pertamina resets meeting 
with Sinopec on East Java refinery project

JAKARTA, July 7 (XFN-ASIA) - PT Pertamina has reset a meeting 
withChina Petroleum & Chemical Corp (Sinopec) to July 22 to finalize 
a feasibility study for an oil refinery project in Tuban, East Java,
Pertamina processing director Suroso Atmomartoyo said.

The meeting was originally planned to be held last month in China.

Sinopec signed an agreement last year to build an oil refinery in
Tuban, East Java in cooperation with Pertamina, but there has been
speculation that the Chinese firm may withdraw from the deal after the
estimated investment cost doubled to 3 bln usd from the initially
envisaged 1.6 bln.

Pertamina has been considering seeking other partners for the planned
refinery but said before it does, it would wait for Sinopec's
decision.

Suroso said there are indications that Sinopec is still seriously
interested in developing the project, but he did not elaborate.

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New Straits Times (Malaysia)
Friday, July 7, 2006

CIMB, Indonesian banks arrange financing for oil firm

THE CIMB Group, via Bumiputra-Commerce Bank (L) Ltd (BCBL) and PT Bank
Niaga Tbk, has signed an agreement with PT Pertalahan Arnebatara
Natuna (PT Pan) as arrangers to offer a syndicated five-year term-loan
facility to finance the refurbishment construction and work over
programme on two oil wells at the Udang Oil Field.

Lenders participating in the syndicated term-loan facility are BCBL,
Bank Niaga, PT Bank Internasional Indonesia Tbk and PT Bank Ekspor
Indonesia, CIMB said in a statement.

In 2002, PT Pan entered into a technical assistance contract with
Perusahaan Pertambangan Minyak dan Gas Bumi Negara (Pertamina) for a
concession period of 20 years to conduct petroleum operations which
include exploration, development, extraction, production,
transportation, marketing and site restoration within the Udang Oil
Field.

The Udang Oil Field is located within the Udang Block in the Natuna
Sea together with four other oil fields, namely Tiram, Kepiting,
Udang-5 and Kerang which cover a total area of 58.8sq km.

The size of the Udang oil Field is about 2,430ha with a total 26 oil
wells. Currently, it has only two oil platforms, namely Platform A
(which is already in operations) and Platform B.

In 2005, PT Pan reactivated and revitalised 13 wells and refurbished
Platform A, which is currently producing 2,500 barrels per day. The
development and refurbishment was funded by bank loan and
shareholders' advances.

The loan will enable PT Pan to refinance the previous loan, and fund
refurbishment works for Platform B and the workover programme of wells
on Platform A.

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Platts Commodity News
July 7, 2006

Pertamina unlikely to issue sweet crude tender this month: source

Indonesia's Pertamina is unlikely to issue a spot import tender for
sweet crude this month as high stock levels and supplies under term
contracts should mean it has enough to meet demand, a source close to
the company said Friday.

"Pertamina's stockpiles are more than enough to keep the refineries
going at the current levels so there really is no need to buy
additional cargoes," the source said.

The state oil company typically issues an import tender to buy sweet
crude from the spot market in the first week of every month, but
canceled last month's tender.

Current high oil prices could also be a factor behind the company's
decision not to make additional spot imports, a Singapore-based trader
said.

Pertamina is expected to announce a final decision on whether or not
to tender for spot crude on July 10.

The Singapore-based trader said Pertamina was also struggling to find
a home for some of its domestic crude production.

The company is offering about 200,000-500,000 barrels of July-lifting
Duri crude on the spot market, but has had no response.

Pertamina's refineries are currently running at around 95% to 97% of
their nameplate capacity.

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Platts Commodity News
July 7, 2006

Indonesia invites India's Nalco to take control of Asahan smelter

The Indonesian goverment has invited Indian state-owned aluminium
major National Aluminium Co. to take over the operations of the
country's Asahan Aluminium smelter, which is currently majority (51%)
owned by Nippon Asahan, a 12-company Japanese consortium. The
Indonesian government has a 49% stake.

Amongst the 12 Japanese companies are Sumitomo Chemical, Nippon Light
Metal, Sumitomo Corp., Mitsui and Co., Marubeni Corp. and Mitsubishi
Corp.

Market talk is that the Japanese stake is "expiring soon" and Nalco
was chosen "because of the abundant alumina resources in India," a
Singapore trader told Platts.

Nalco Chairman C R Pradhan confirmed to Platts Friday that the company
has been approached by the Indonesian goverment on this issue "about
three months back." He said: "We are interested but we want to see the
plant and study the issue first. We need to first discuss with the
Indian government and then decide how to progress." He expects to
complete discussions with the Indian government "in about a month."

Pradhan added: "The Indonesians have proposed for us to take over 100%
stake of Asahan, but there was no offer and no details of the plant.
We need to go see the plant ourselves, to see how advanced it is and
its capacity etc...we have not enough information yet."

Indonesian government officials declined to comment when contacted by
Platts Friday. A source from Asahan said "it is true" and that there
is "intent to start negotiations" but declined to give further
details. Officials from Nippon Asahan in Japan could not be reached
for comment Friday.

Indonesia's Asahan Aluminium, also known as PT Inalum, is the
country's sole aluminium smelter and has a production capacity of
225,000 mt/year. It aims to produce 250,000 mt of aluminium ingot for
fiscal 2006 (between April 2006 to March 2007), up marginally from
about 245,000 mt produced in the previous fiscal year ended March
2006.

The company's operation relies on the supply of electricity from the
hydroelectric plant located near Lake Toba. The changing water level
due to unpredictable rainfall has affected the constant flow supply of
electricity to the plant over the years and affected production.

---Yuencheng Mok, yuencheng_mok at platts.com

----------------------------------------

The New York Times
July 7, 2006

Brazil's Oil Giant Is Drilling Far From Home Waters 

By PAULO PRADA

photo: The P-43 floating platform is near Macaé, Brazil, which is 
the logistical base for a cluster of 38 platforms. Douglas Engle for 
The New York Times

MACAÉ, Brazil -- When Petróleo Brasileiro, Brazil's state-controlled energy 
company, said it would not spend another cent investing in Bolivia after the 
nationalization of the energy sector there, it was no idle threat. 

Petrobras, a company that once bartered chickens for imported oil, used to 
focus solely on guaranteeing the supply of fuel for Brazil, Latin America's 
biggest economy, with 180 million people. 

But innovative offshore drilling techniques and an aggressive plan to 
diversify have enabled the company to shift its focus from production at home toward 
becoming a player on the global energy market and a major foreign investor. 

Once largely unknown outside South America, Petrobras over the last decade 
expanded abroad swiftly, investing in 18 countries on three continents. 

At a time when many oil companies are holding steady on new production and 
stockpiling the windfalls of record-high prices, Petrobras is investing 
aggressively in new sources and using its deepwater drilling expertise to start 
producing in once-remote offshore beds as far afield as Angola, Tanzania, Turkey and 
India. 

Closer to home, it has been raising its profile in the United States, where 
it recently bought a refinery. And going against the trend, it is stepping up 
its investments in the Gulf of Mexico, where new drilling operations are being 
increasingly being sited farther from shore. Petrobras plans to invest $2 
billion there by 2010, one of the few companies preparing to go beyond the shallow 
waters that historically produced gulf oil.

With its expansion abroad, Petrobras stands out among rival state-run giants 
that have traditionally dominated the Latin American energy sector. "In 
today's market, a company like Petrobras is an exception," said Lawrence J. 
Goldstein, president of the PIRA Energy Group, a consulting firm in New York. "They 
are going outside their borders, exploring new opportunities and diversifying, 
unlike most other state companies." 

When most people think of Latin American oil, their thoughts turn to 
Venezuela and Mexico.

But production by Petróleos de Venezuela, or PdVSA, and Petróleos Mexicanos, 
or Pemex, remains largely domestic and their output stagnant or falling. 
Brazil cannot compete with Venezuela or Mexico in terms of reserves, but Petrobras 
may soon surpass PdVSA to become the second-largest company behind Pemex in 
production. 

Petrobras, which remains 55.7 percent state-owned, is investing its rush of 
profits to bolster output to 2.5 million barrels of oil a day by 2010, up from 
an average of 1.9 million this year. Its production last year led to net sales 
of $45.22 billion and a net profit of $10.02 billion, a 50 percent increase 
from net profit of $6.69 billion in 2004. That puts it on a much stronger 
financial footing than both PdVSA and Pemex, which lost money last year. 

The rapid production gains reflect Petrobras's success in developing new 
deep-sea drilling techniques, enabling it to pump farther from shore than other 
producers and increase its output more quickly than any other company in Latin 
America. The techniques, similar to those later developed by giants like Royal 
Dutch Shell and Chevron, enabled Petrobras in recent years to pump oil from 
depths once thought inaccessible and helped Brazil to attain long-sought 
self-sufficiency in oil production early this year.

In the 1980's, foreign activities by Petrobras were once aimed at negotiating 
imports, as the company traded machinery and agricultural products for oil 
from the Middle East. But now, the company is focused on developing deepwater 
fields abroad.

"The priority is no longer ensuring Brazil imports enough oil," said Nestor 
Cerveró, director of international operations for Petrobras, in an interview at 
his office overlooking the bay and surrounding hillsides of central Rio de 
Janeiro. "Our international strategy is now about new markets and expanding the 
business and brand."

For all its agility, Petrobras was blindsided in May when Evo Morales, 
president of Bolivia, nationalized the country's energy sector. Petrobras, the 
largest foreign investor in Bolivia, was widely criticized for not foreseeing the 
move and now must renegotiate contracts that supply Brazil with half its 
natural gas. 

The setback, though, allowed Petrobras to brandish its growing heft as a 
foreign investor. Having already spent $50 billion in Bolivia, Petrobras scrapped 
plans to invest another $2 billion. Instead, it plans to invest in other 
sources, including imports of liquefied natural gas from Africa. 

Late in June, Petrobras said it would ramp up overall investments by more 
than 66 percent over the next four years, investing at least $87.1 billion, 
mostly on exploration and production, from 2007 to 2011. Of that, $12.1 billion 
will be invested abroad, especially new offshore platforms in the Gulf of Mexico 
and new fields off the coast of Nigeria and Angola.

Petrobras is also beginning to buy foreign refineries to process its growing 
global output and eventually plans to sell fuel in gas stations in the United 
States, Europe, and Asia, in addition to its retail sales in South America. In 
February, Petrobras paid $370 million for a 50 percent stake in a refinery in 
Pasadena, Tex.

The growing investments are a sharp contrast to the course being followed by 
many state-run companies.

Despite Venezuela's huge reserves, PdVSA produces less today than it did five 
years ago. Company officials say PdVSA produces about three million barrels a 
day, all domestically. Yet more than a third of that output, independent 
analysts say, is produced by foreign companies, who this year by law surrendered a 
controlling stake in their operations to the domestic giant.

What is more, PdVSA is investing little in new capacity. Much of today's 
revenue goes to finance President Hugo Chávez's heavy social spending at home and 
elsewhere in Latin America. Many analysts say, then, that Petrobras is 
overtaking PdVSA as the largest producer in South America.

"One company is investing in its future and the other in the petroleum 
diplomacy of their president," said Roger Tissot, Latin America director at PFC 
Energy, a consulting firm in Washington.

But the Petrobras strategy has risks. 

Many of its new investments — in Nigeria and the Persian Gulf, for instance 
— are in politically unstable regions. And the company's management, critics 
say, remains influenced by Brazil's center-left government, which has been soft 
on neighboring countries, like Bolivia, whose policies harm the company's 
interests.

Executives deny suggestions that Petrobras operates any way other than as a 
private enterprise. By casting the net far and wide, they say, Petrobras is 
minimizing exposure to any one country.

Its investments in the Gulf of Mexico are an example. 

As with Africa's oil-rich Atlantic coast, where geological similarities to 
Brazil's shore attracted Petrobras engineers, drilling in the gulf is in 
increasingly deep waters. The company over the last decade has won leases for 276 
sites throughout the gulf, according to the United States Minerals Management 
Service, which regulates oil exploration.

But most of those sites remain untapped. 

That is because Petrobras hopes to introduce platforms that until recently 
were not authorized in the gulf: floating production, storage and offloading 
platforms. Increasingly used by Petrobras at home, the floating units are large 
ships that, like traditional platforms, can be connected by hoses to pumping 
points on the seabed. 

But because the floating platforms can navigate — many are converted oil 
tankers — they are more agile in distant waters and can better weather high waves 
and winds. If regulators approve a Petrobras petition to introduce its first 
floating production, storage and offloading platform, the vessel would increase 
the company's production in the region from the current 8,000 barrels a day, 
to more than 100,000, according to company estimates.

In Brazil, the P-43 floating platform is moored a 106-mile helicopter ride 
over the Atlantic from the little airport in Macaé, the logistical base for a 
cluster of 38 platforms northeast of Rio de Janeiro, where Petrobras gets 90 
percent of its oil. The $260 million vessel, launched in 2004, is emblematic of 
the company's innovative reach into deeper waters. 

In the 1970's, Petrobras built a handful of tiny derricks in the shoals near 
Macaé, where the government hoped a few small oil beds would help reduce 
Brazil's dependence on foreign sources. Geological tests in later decades, however, 
indicated large deposits much farther out — more than 100 miles into the 
Atlantic and more than a mile underwater. 

The problem was that no company had ever drilled that deep. 

So, Petrobras engineers worked with manufacturers to develop 
pressure-resistant instruments and progressively moved seaward, breaking global depth records 
along the way.

"Petrobras became the leader in deepwater drilling," said Tom Marsh, 
publisher at ODS-Petrodata, a researcher based in Houston that tracks data on offshore 
energy projects. "Their oil was offshore and that made the Brazilian coast 
one big, giant research and development project." 

Amid a circular pod of 20 computers that make up the P-43's control room, 
teams of analysts one recent afternoon tracked production and naval systems. From 
there, Rivadávia Freitas, the platform manager, walked to the vessel's stern, 
where a giant hose awaited the arrival of another ship to offload crude. 

"From the platform it goes to refineries on shore or in other countries," Mr. 
Freitas said. "We export directly from here."

---------------------------------------------

Platts Commodity News
July 7, 2006

PT Smelting's copper output to fall 1.5% for year ending March 07

Indonesia's sole copper cathode producer Gresik Smelter & Refinery, or
PT Smelting targets an output of 259,000 mt for year to March 2007,
down 1.5% from 259,000 mt produced for the year ended March 2006, an
official from Japan's Mitsubishi Materials said Friday. Mitsubishi
Materials has a 60% stake interest in PT Smelting and US-based
Freeport-McMoran Copper & Gold has 25%. The remaining 15% is owned by
minority shareholders.

The official said the lower output was due to the turnaround in early
2006. The company restarted in early June after a turnaround which
began in May 2006. The next major turnaround at Gresik is slated for
2008.

Meanwhile, the official added that the company has no immediate plan
to raise its production capacity further.

PT Smelting has just completed a production capacity upgrade to
270,000 mt/year in 2006. Previous capacity was 250,000 mt/year.

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Platts Commodity News
July 7, 2006

Indonesia's GT Petrochem to restart No 1 MEG plant on July 3

Indonesia's GT Petrochem plans to restart its 96,000 mt/year No 1
monoethylene glycol line in Merak on Saturday following completion of
repairs, a company source said Friday.

The No 1 plant was shut down on July 3 after a leak was detected. The
No 2 MEG unit, with a production capacity of 120,000 mt/year, has been
operating normally.

Margins for MEG producers improved this week, especially in Southeast
Asia, as ethylene prices began a sharp decline.

Southeast Asian ethylene prices were pegged at $1,140 to 1,150/mt CFR
as of early Friday, down $60/mt from Monday. MEG producers need to
sell at around $790/mt FOB or $810/mt CFR, in order to break even on
production costs.

Early Friday, Asian MEG prices were up $7.5/mt from the previous week
to $915-920/mt CFR. (see<PCA423>)

---------------------------------------------------------------

Bisnis Indonesia
July 7, 2006

Bakrie Proposes US$0.77 per MMBtu Toll Fee

JAKARTA: PT Bakrie Brothers has proposed US$0.769/MMBtu in natural gas
toll fee at the tender for the development of gas transmission
pipelines from East Kalimantan to Central Java.

The amount of toll fee proposed is the cheapest compared to the bids
made by two other competitors, namely PT PGN (US$0.98/MMBtu) and PT
Barata Indonesia (US$1.10/MMBtu [million British thermal unit]).

The toll fee bids are stated in the record of the opening of the
tender for the development of gas transmission pipelines from East
Kalimantan to Central Java. The record is signed by Director of
Natural Gas at the Oil and Gas Downstream Regulatory Body (BPH Migas)
Saryono Hadiwijoyo as the head of the tender organizing team.

According to the plan, BPH will announce the winner of the US$1.2
billions' worth project next week.

Three companies making bids are PT Barata Indonesia, the State Gas
Company (PGN), and PT Bakrie Brothers.

Minimum requirement

The record told that the three companies had submitted the guarantee
of bids issued by reputable financial institutions. The guarantee was
worth minimum 0.1% of the investment value.

Barata submitted guarantee worth US$1.875 million from Asuransi
Ramayana, PGN submitted guarantee worth US$1.45 million from Bank
Mandiri, and Bakrie Brothers submitted guarantee worth US$1.4 million
from BII.

In addition, Barata Indonesia submitted 14.4% in internal rate of
return (IRR), followed by PGN (12%) and Bakrie Brothers (12.29%).

Feasibility study by PT PGN disclosed that the gas transmission
pipeline networks will be 1,219 km in length with 42 inches in
diameter.

Previously, Head of BPH Migas Tubagus Haryono confirmed that Bakrie
Brothers was the one offering the cheapest tariff. However, he quickly
added that the cheapest tariff was not the only factor put into
consideration to determine a winner.

He informed that in deciding the winner, BPH Migas would only base
itself on things stated in the bidding documents. (

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Share price of Indonesia's Antam falls on ferronickel plant closure

JAKARTA, July 7 (Asia Pulse/Antara) - The share price of publicly
listed mining company PT Aneka Tambang (Antam) dropped 9.09 per cent
to Rp4,500 (US$0.50) yesterday after the state mining company
announced the suspension of the operation of its third ferronickel
plant.

On April 27, its share price peaked at Rp6,050.

Antam, which operates nickel and gold mines, said its nickel
production this year may fall 32 per cent after the leak incident in
its third ferronickel plant in Pomalaa, Southeast Sulawesi forcing it
to suspend the operation of the plant.

The operation of the new plant was already delayed earlier from April
to May and then to June.

Antam has considered to demand compensation from its contractors
Mitsui & Co. Ltd and Kawasaki Heavy Industries Ltd.

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Platts Commodity News
July 6, 2006

SEA phenol up $50/mt, strong demand from Indonesian plywood users

Phenol prices in Southeast Asia were expected to remain firm, backed
by strong demand from the plywood industry in Indonesia, traders said
late Thursday. During mid-week, phenol prices in Southeast Asia had
surged by around $50/mt to $1,410/mt CFR Indonesia. Offers were
subsequently heard at $1420/mt CFR Indonesia for 500-800mt cargoes
arriving at the end of July.

The main reason for the robust demand from the Indonesian plywood
industry was the strong performance of the downstream finished timber
industry, traders said. Finished timber products were going through a
boom season as demand from European importers had been on a steady
increase.

'We have seen a steady increase in enquiries from our Indonesian
customers since end-May," one trader said. Phenolic glue is used
primarily in the production of finished timber products in the
Indonesian plywood industry.

In addition to firm demand, the tight supply of phenol in Southeast
Asia also aided traders' efforts to achieve price hikes. According to
producers and traders, there would be less spot cargoes available from
Southeast Asia because Mitsui Phenols Singapore, Southeast Asia's only
phenol producer, was shut down on a scheduled maintenance turnaround
on July 2. The turnaround is expected to last 25 to 30 days.

However, most market players were uncertain when it came to projecting
demand for August. "It is unclear if the demand increase from
Indonesia is sustainable," a second trader noted. According to this
trader, several changes initiated by the Indonesian government could
have a negative impact on the timber industry. These will, in turn,
affect phenol demand from the phenolic glue segment.

Indonesian timber traders had been grumbling about the additional
levels of inspections and documents needed when obtaining a timber
export license. Additional port and storage charges were also incurred
when delays in the processing of export licenses were encountered,
traders explained.

Other Southeast Asian downstream phenol industries were not faring as
well. Phenolic resin producers, which are the other key downstream
phenol users in Southeast Asia, appeared to be balking at requested
price hikes for phenol cargoes arriving in July. Most bids from
phenolic resin customers for that period were heard to be languishing
below $1,350/mt CFR SEA.

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Avocet Mining: 18.2M Resource At Durian And Osela Deposit

Edited Press Release

LONDON, July 7 (Dow Jones)--Avocet Mining has Friday completed a
review of the Durian and Osela deposits in the Bakan District in the
Company's 80% owned Mongondow Contract of Work ("CoW") in Indonesia.
The Company reports a preliminary inferred resource of 18.2 million
tonnes averaging 0.9 g/t Au and containing 533,000 ounces of gold for
Durian and Osela using a cut-off grade of 0.3 g/t Au.

The inferred resource estimates are based on 75 (8,450 metres),
50-metre spaced drillholes, supplemented by field mapping information
and trench data.

Drilling has identified a strong supergene overprint at both deposits,
focussed around the structural intersections. This overprint forms
significant zones of oxidised, sub-horizontal high-grade
mineralisation at depths of 5 to 50 metres below surface.

Further drilling is required to define the higher-grade core of the
deposit, zones where the low-grade flanks are open, strike extents and
parallel zones of mineralisation.

Avocet currently has three diamond drill rigs active in the Bakan
District and is evaluating the feasibility of accelerating drilling
using a reverse-circulation drilling rig.

All rigs are engaged in the second phase infill drilling programme.
Exploration efforts have escalated to identify additional mineralised
targets close to Durian and Osela.

The Durian and Osela resources are contained within oxide and
transitional mineralisation. Metallurgical test work is ongoing.

Avocet is targeting measured, indicated and inferred resources of at
least 500,000 ounces in the Bakan District by 2007 and a new mine by
2008.

The Bakan District has the potential for a larger deposit than the
Company's initial target of 500,000 ounces being discovered on account
of additional mineralisation already identified in the Camp and Main
Ridge areas.

------------------------------------

Petromindo Headlines, Thursday and Friday,
July 6 and 7, 2006: 

Oil/Gas: 

Friday, July 7, 2006:

- Regional LNG: Thai PTT to invest Bt36 bn in LNG terminal 
  and deep-sea port
- Bakrie offers lowest tariff in tender for gas pipeline project
 
Thursday, July 6, 2006:
 
- Regional LNG: Taiwan in desperate need of LNG
- Pertalahan to get loan for Natuna oilfield development
- Regional LNG: Osaka Gas, Inpex in talks on Australian 
  LNG project: Report
- South Sumatra-West Java gas pipeline to operate in 
  November
- Lapindo CEO questioned on mudflow disaster
- BPMIGAS tenders Bontang condensate
 
Mining: 
 
Friday, July 7, 2006: 

- Coal miner Jorong Barutama Greston clarifies report 
  on flood, Force Majeure declared to customers 
- Intitirta Primasakti to start coal production 
  this year
 
Thursday, July 6, 2006 
 
- Scomi Marine gets coal shipping contract from Tenaga
- East Kutai mulls to sell shares in KPC
- Inco appoints Arif Siregar as new president
 
Power: 
  
Friday, July 7, 2006:

- Pre-qualification tender for coal-fired power plants 
  to open next week
 
Thursday, July 6, 2006:
 
- New agency formed to fast-track power projects
- PLN’s Anyer power plant project stalled on lack 
  of gas supply
 
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Joyo Indonesia News Service
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