Three Malaysian firms may invest in Indonesia's biofuel sector to help drive its ambitious $20-billion push into alternative sources of energy, Indonesia's mines and energy minister said on Saturday. Purnomo Yusgiantoro named Golden Hope Plantations, Genting Bhd and Sime Darby Bhd as potential investors in the sector.
"We want to do it very quickly," Purnomo, in Malaysia to lure investors, told Reuters in an interview, adding that the government would offer fiscal incentives and reduce red-tape.
Indonesia, the Asia-Pacific's only Opec member, is struggling to cut a hefty oil subsidy bill inflated by high global prices, and wants to encourage alternative sources of energy.
It was net importer of crude oil in May and June this year. Output from Indonesia's ageing oil fields is declining at an annual rate of 5 percent or more, and new fields are not being tapped fast enough to offset this.
Biofuels are becoming more important as countries seek to cut greenhouse gas emissions and cut dependence on oil. Under the plan, Jakarta wants to cut subsidised oil-product consumption by 10 percent by 2010.
Purnomo said Indonesia would open up six million hectares of biofuel plantations, such as jatropha and palm oil for biodiesel and sugarcane to produce bio-ethanol for gasoline.
He said Genting, with interests in casino, power and plantations, was keen to take up one million hectares.
Indonesian President Susilo Bambang Yudhoyono, who is also in Malaysia, visited a biofuel plant run by Malaysia's Golden Hope Plantations earlier on Saturday.
But investment from foreign firms will be limited to upstream production activities as Jakarta had decided to give state oil firm PT Pertamina dominance in downstream marketing, he said.