MUDLINE: Jungle drums beat slowly in Indonesia

There is no doubt that change has taken place in the Indonesian oilfield, and mostly for the better.

    • 22 November 2001
    • 08:00
    • News

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Editors note: Will.E.Drillit apologises for the non-appearance of last week's Mudline column. After spending the last couple of weeks trampling around Indonesian oilfields he wasn't the only one to discover that it can take some time for news to get out of Indonesia. He also advises he has a beneficial interest in Kalrez Energy shares.

"There is no doubt that change has taken place in the Indonesian oilfield, and mostly for the better. The Pertamina monopoly is being broken and the acquisition process becoming more transparent. Deepwater offshore developments are being opened up for the first time (with our very own Clough winning major contracts) and Matrix Oil proving there are good opportunities to be bought on the auction block with imminent first oil from their Langsa field offshore Sumatra.

However dealing in Indonesia still has its difficulties, not the least of which can be basic communications. Not just speaking the language but physically getting the news back out to head office. It seems as though Kalrez Energy had the same problem as your trusty correspondent, judging by the delay in the ASX receiving the news of their shortlisting for the Cemara LPG project.

Kalrez director Rob Collins said they had made it down to a shortlist of six companies, from 23 who were invited to pre-qualify. Kalrez bid the project on the basis of utilizing its 75% owned LPG gas plant which is located in Jakarta.

Yet sources in Jakarta told me at the start of the month - two weeks prior to the KRZ announcement - it was common knowledge that one of the local contractors has been given the 'nudge nudge, wink wink' that it had the job, which makes it a very slow boat that carried the news back to Perth. Perhaps it was in the same carrier pigeon that was carrying last weeks Mudline column - stranger things have happened.

And - curioser and curiouser - despite Kalrez management sounding excited about the news and presumably having spent a rupiah or three on the bid, why would they not authorise the US$100,000 bid bond required to lodge their bid with the Indonesian authorities? Did they not want the bid to succeed?

It is understood Kalrez director, Russell Brimage, was left high and dry in Jakarta needing to find the required US$100, 000 deposit, with nary an ATM in sight. The money was found however, but it remains to be seen how much soul had to be sold to get the 11th hour financing over the line. With the AGM on Friday week and their placement documents having hit the ASX on Tuesday to raise capital for their imminent cash calls, it will make for interesting discussions.

One of the last things an expat accountant said to me as I boarded the (thank God for) Qantas jet to Perth, and which left me thinking the whole way during the flight, was that even if the Kalrez placement came though at the end of January (the date the prospectus closes) would they be trading while insolvent until that time? Doubtful, but if the placement falls over it doesn't seem to leave a great deal of time to formulate plan B."

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