28/05/2008 - 22:00

Oil exec breaks new ground

28/05/2008 - 22:00

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Perth-based petroleum executive Bret Mattes has broken new ground in Indonesia by becoming what is believed to be the first foreigner to be appointed chief executive of a national energy company.

Oil exec breaks new ground

Perth-based petroleum executive Bret Mattes has broken new ground in Indonesia by becoming what is believed to be the first foreigner to be appointed chief executive of a national energy company.

While Indonesia has generally welcomed foreign workers, including at senior levels in its national companies and particularly in the energy sector, it has previously drawn the line at the chief executive role.

Mr Mattes, whose previous roles include being vice-president for BHP Billiton Gas and Power in Perth, has become chief executive of Star Energy Ltd in Indonesia.

His appointment proceeded only after intense scrutiny, with questions being asked in the Indonesian parliament, and a circuitous approval process that required intervention at the highest levels of the Indonesian government.

Mr Mattes believes his appointment is an encouraging sign for international investment in Indonesia, and for Australia's relations with our northern neighbour.

"Indonesia has enormous investment potential and I don't think that's fully appreciated in Australia," Mr Mattes said.

"It's a huge market, it is as resource rich as Australia, it's in our time zone, it is a vibrant, young, reformist democracy, and politically it is stable."

Political ties between Australia and Indonesia appear to be warming, with Prime Minister Kevin Rudd announcing last week he would be visiting Indonesia for the second time since taking office.

Mr Mattes says Indonesia suffered more than any other country from the Asian economic crisis of 1997 but is strongly on the path to recovery.

Star Energy has three major assets: a producing oil and gas field offshore from Kalimantan, a 450-kilometre subsea pipeline to Singapore and geothermal power in Java.

Mr Mattes sees big potential in the geothermal assets and is keen to acquire further energy assets to diversify the company's operations ahead of a listing on a public stock market.

Star is evaluating its options but could look to Australia for both the acquisitions and the public listing.

The field that it operates produces more than 8,000 barrels of oil and 60 million cubic feet of sales gas per day.

Star's geothermal power generation assets in West Java currently produce 120 megawatts of power a year from a single turbine and a series of planned production expansions will increase that to 220MW by the end of this year and 450MW by 2012.

Mr Mattes sees potential for it to grow to 650-700MW, which would make it the largest geothermal development in Indonesia and one of the largest in the world.

He said Star's geothermal assets were very different from most Australian geothermal assets. The Javanese field uses 'flash steam' that comes out of the ground as single-phase steam to drive a turbine for power generation.

This contrasts with most Australian projects, which contemplate trying to heat water that is pumped below the surface to 'hot rocks', and then recycling it back to the surface as hot water.

Mr Mattes said the Indonesian steam is unusually clean, being free of carbon dioxide and sulphur, which makes it ideal for use in power generation.

The project also generates significant revenue from carbon credits, because the base-load geothermal power "displaces" coal fired power.

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