Energy company PT Indika Energy is in talks with Indian buyers to sell 4 million tons of coal next year, one of its executives says. Indika investor relations vice president Retina Rosabai said the talks were still underway and no decision had been made,

but refused to name the companies involved in the negotiations, or the value of the deal.

The deal is expected to bring the company’s sales output next year to more than the 24 million tons estimated for this year.

To meet the target, the company is aiming to increase its coal output
to 28 million tons by next year, a 12.68 percent increase on this
year’s production target.

The company’s net profit dropped 25 percent in the first half of this
year to Rp 361 billion (US$38.2 million) on the back of weaker demand.

However, Indika finance director Azis Rahman said conditions would
improve in the second half of 2009 as revenue from engineering and
mining subsidiary PT Petrosea would be consolidated into the company’s
financial books. He did not give any figures.

Indika recently acquired an 82 percent stake in Petrosea in a deal valued at $83.8 million.

By acquiring Petrosea, Indika expects to begin receiving up to 850,000
tons of additional coal from Petrosea’s PT Santan Batubara unit this
year, Azis said. Santan output is expected to increase to 2 million
tons in 2010, he added.

Azis also said Indika was open for another acquisition opportunity, and
that it had relatively strong cashflow, currently estimated to be
around $270 million.

Other than supporting a possible acquisition, Indika would use the
money to develop its three core business interests – power plants,
resources and mining services.

Earlier it was reported that Indika was interested in acquiring assets
belonging to British energy giant BP Plc and local coal producer Berau
Coal.

Indika president director Arsjad Rasjid said earlier the company
planned to partner with state oil and gas company PT Pertamina to buy a
46 percent stake in BP’s Northwest Java Sea block in West Java.

When asked about the progress of these two acquisition plans, Azis refused to comment since both were still being negotiated.

Source: The Jakarta Post

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