10 percent stake in Cepu not enough: Pertamina<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina said on
\nFriday it was demanding more than a 10 percent stake in a joint
\nventure with U.S-based ExxonMobil Oil Inc. for the development of
\nenormous oil reserves in the Cepu block, located in Central Java
\nand East Java.<\/p>\n
Pertamina president Baihaki Hakim said he wanted a more
\nequitable share, citing that the Cepu block was originally owned
\nby Pertamina before being transferred to Humpuss Patragas in what
\nhe called a "hostile takeover".<\/p>\n
The block was later bought out by ExxonMobil.<\/p>\n
"The point is, we want more ... I'm not satisfied with 10
\npercent," Baihaki told reporters following a presentation of
\nPertamina's restructuring programs.<\/p>\n
His statement contradicts ExxonMobil's claim last week that
\nPertamina had agreed to accept a 10 percent stake in the project.<\/p>\n
Baihaki declined to disclose how much Pertamina was demanding
\nduring negotiations with ExxonMobil.<\/p>\n
Last week, ExxonMobil said it recently discovered oil reserves
\nwith an estimated capacity of 250 million barrels in its Cepu
\ncontract area.<\/p>\n
ExxonMobil's officials are tight-lipped over details regarding
\nCepu's production forecasts and the current negotiations with
\nPertamina.<\/p>\n
According to one source, ExxonMobil hopes to produce around
\n100,000 barrels per day (bpd) by the year 2004.<\/p>\n
The company's unit, Cepu Mobil Limited, develops the Cepu
\nblocks under a Technical Assistance Contract (TAC) with
\nPertamina.<\/p>\n
A TAC usually covers oil fields that have either stopped
\nproduction or have been abandoned by large companies after being
\ndeemed economically unviable.<\/p>\n
Yet, to small companies with lower production costs, these oil
\nfields may still be attractive.<\/p>\n
The TAC system, however, gained a bad reputation after
\npolitically-connected business people allegedly abused the
\ncontract system to enter the oil and gas sector and make quick
\nprofits by acting as brokers.<\/p>\n
Some people managed to obtain TACs in the past, despite the
\nblocks still operating.<\/p>\n
One such case, currently under investigation, concerns PT
\nUstraindo Petro Gas, which is controlled by former president
\nSoeharto's son Bambang Trihatmodjo. This company was accused of
\nobtaining four TACs from Pertamina in 1992 and 1993 while the
\nfields were still in production.<\/p>\n
The case implicates former ministers of mines and energy IB
\nSudjana and Ginandjar Kartasasmita, both of whom have been named
\nsuspects by the Attorney General's Office.<\/p>\n
Pertamina transferred Cepu to PT Humpuss Patragas in 1990,
\nwhich at the time was controlled by Soeharto's youngest son,
\nHutomo Mandala Putra.<\/p>\n
Humpuss later sold 49 percent of the block to a unit of
\nExxonMobil, Australian firm Ampolex Pty Ltd.<\/p>\n
But, Humpuss sold its remaining 51 percent stake to ExxonMobil
\nlast year amid the anti-corruption campaigns launched by the
\nadministration of BJ Habibie, who replaced Soeharto in 1998.<\/p>\n
"I want Pertamina's stolen rights back," Baihaki said without
\nfurther elaboration.<\/p>\n
According to him, ExxonMobil should have known about the
\ndubious ways in which Humpuss acquired the Cepu block from
\nPertamina.<\/p>\n
"You (ExxonMobil) may not be guilty, but as an world-leading
\ncompany you should be well aware of business ethics," he said.<\/p>\n
Baihaki added that he would not allow ExxonMobil to extend its
\nCepu contract unless there was clarity regarding transfer of the
\nblock's ownership.<\/p>\n
"I don't want my signature as a Pertamina president (on the
\ncontractual extension) result in me ending up in the Attorney
\nGeneral's Office," he said.<\/p>\n
Baihaki said Pertamina planned to raise oil production from
\nits own operations to 200,000 bpd, from the current 80,000 bpd,
\nwithin five years.<\/p>\n
A significant interest in the Cepu block is seen as crucial to
\nachieving that production target, he said.<\/p>\n
Pertamina is also close to controlling the large Coastal Plain
\nPekanbaru (CPP) oil block in Riau, currently owned by PT Caltex
\nPacific Indonesia.<\/p>\n
Pertamina is coveting a 90 percent stake in the CPP block,
\nwhich produces between 50,000 to 60,000 bpd. The government has
\nallocated the remaining shares to a local-government-owned Riau
\ncompany.<\/p>\n
Other opportunities will arise from the development of
\npromising oil and gas reserves in the Makassar Straits off East
\nKalimantan.<\/p>\n
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
\nhas said that Pertamina held a good chance of acquiring a 20 to
\n25 percent stake in a consortium developing those large
\nreserves. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/10-percent-stake-in-cepu-not-enough-pertamina-1447893297",
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