ASEAN KEY DESTINATIONS
State banks eye more deals from oil firms
Indonesia’s major state owned banks, Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI) and Bank Mandiri, expect a significant increase in their trustee business next year as more oil and gas companies will likely hand over their fund management to local banks.
BNI international division general manager Abdullah Firman Wibowo said that the lender expected to seal around 12 trustee paying agent agreements (TPAAs) in 2014.
“All of the 12 agreements in the pipeline will be with oil and gas companies. We are expecting to sign the first agreement in the first quarter of 2014,” he said, adding that the two parties were still wrapping up the seller and buyer negotiation process.
Bank Indonesia (BI) since 2011 has asked local and foreign companies operating in Indonesia, including oil and companies, to keep their export earnings in Indonesian banks.
To support the requirement, the central bank issued the trustee regulation back in 2012, which requires local banks to improve their trustee business in line with international standards to be able to serve international companies. So far those three lenders have been granted the authority.
At the moment, BNI has trustee partnerships with several oil and gas companies, namely France-based Total E&P Indonesie, Pertamina Hulu Energi Offshore North West Java (ONWJ) and Energi Mega Persada.
With Total, BNI — through its Singapore branch — has agreed to manage gas sales from the Mahakam block in East Kalimantan with an estimated value of US$18 billion for 10 years.
Total has 50 percent participating interest in the block, while Japan’s INPEX Corporation controls the rest.
“In 2013, BNI Singapore has managed $1.2 billion from the Mahakam block, which was divided into 24 transaction slips. There are still an additional five slips with a total amount of $250 million until year-end,” Firman said.
The partnerships with Pertamina Hulu Energi and Energi Mega Persada were signed this month. BNI will manage Pertamina’s gas sales from its ONJW block with an expected value of $21 million over the next three years and Energi Mega’s gas sales from its Bentu and Korinci Baru blocks in Sumatra with an estimated value of $60 million per year.
BNI president director Gatot M. Suwondo said that the lender hoped to get a bigger slice of the trustee business, which is currently still dominated by foreign banks.
“For now, we are still managing the companies’ cash management. We haven’t gone as far as managing their investments, but we’ll see how it goes in the next one or two years,” he said after the signing ceremony with Pertamina and Energi Mega.
Meanwhile, BRI, a lender more popular for its micro and small loans, is eyeing new partnerships with around five oil and gas companies in 2014. According to BRI corporate secretary Muhamad Ali, the oil and gas companies would remain the bank’s focus within the next few years, citing the huge business potentials.
BRI claims to have managed Rp 9.1 trillion ($759.79 million) worth of assets, including that from nine big projects, as of October 2013. About 75 percent of its clients are oil and gas companies and the remainder are firms in the capital market and infrastructure sectors.
Cera Wirastuti, Bank Mandiri vice president for wholesale banking solutions, said that the lender was currently working with four domestic and foreign oil and gas companies in managing their sales proceeds.
“The total value of the projects from those four companies ranges between $40 million and $50 million per year,” she said, adding that the bank also booked around $39,000 in annual fee-based income from the projects.
The bank is now looking to establish new trustee partnerships with four other oil and gas firms. It expects to sign one of the agreements before the end of 2013, according to Cera.
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