Government mulls including Riau in CPP project<\/p>\n
JAKARTA (JP): Riau may become joint owner and developer of the
\nCoastal Plains Pekanbaru (CPP) oil block with state oil and gas
\ncompany Pertamina and PT Caltex Pacific Indonesia, an official
\nsaid on Tuesday.<\/p>\n
Minister of Mines and Energy Susilo Bambang Yudhoyono said the
\ngovernment was considering allowing the provincial administration
\nof Riau to take part in the development of the block. The local
\ngovernment recently demanded total control of the oil block after
\nCaltex's contract expires in 2001.<\/p>\n
Bambang said that while the province wanted total ownership of
\nthe block, the government could not bow to that demand.<\/p>\n
"I've heard their demands, but the House of Representative
\ndemanded Pertamina own the majority stake in the CPP oil block,"
\nBambang said after a hearing with House Commission VIII for mines
\nand energy.<\/p>\n
While Riau has demanded ownership of the block, Pertamina and
\nCaltex have been negotiating their respective shares in the
\nblock.<\/p>\n
Following a House recommendation in 1998, the government has
\ndecided to transfer ownership of the block to a joint venture of
\nboth companies after Caltex's production sharing contract expires
\nin August 2001.<\/p>\n
The government called on Pertamina and Caltex to negotiate the
\nownership of the shares.<\/p>\n
"Because Pertamina is still in negotiations with Caltex, we
\ncan at present only consider the possibility of Riau joining the
\nCPP ownership," he said.<\/p>\n
Bambang said the government would evaluate the feasibility of
\nRiau owning a stake in the oil block. He also said he would
\nevaluate the possibility of Riau fully owning the oil block, but
\nadded that this would be in violation of the House's decision.<\/p>\n
"We must comprehensively study Riau's financial, managerial
\nand technical capabilities," he said.<\/p>\n
Bambang further said the government expected Pertamina to have
\na significantly higher stake in the oil block than Caltex.<\/p>\n
Earlier, Pertamina proposed dividing the block 65 percent for
\nitself, with the remaining 35 percent going to Caltex.<\/p>\n
But Caltex demanded a fifty-fifty split, leading to a
\nstalemate in the negotiations for months.<\/p>\n
However, the ministry's director general for oil and gas,
\nRachmat Sudibyo, said Pertamina had lowered its demand to 60
\npercent, giving Caltex the remaining 40 percent stake in the oil
\nblock.<\/p>\n
"I think Pertamina has shown goodwill to end the deadlock. It
\nis now up to Caltex to respond," Rachmat said.<\/p>\n
Rachmat stated the government would not interfere in the
\nnegotiations, saying Pertamina had been mandated to reach an
\nagreement with Caltex.<\/p>\n
"We expect the negotiations to end by the end of February," he
\nadded.<\/p>\n
The CPP oil block's present production output reaches about
\n70,000 barrels per day, while Caltex, the country's largest oil
\nproducer, has total production of 750,000 barrels per day.<\/p>\n
Caltex, a joint venture between U.S. oil companies Chevron
\nCorp. and Texaco Inc., currently operates four oil blocks in
\nRiau: CPP, Rokan, Mount Front Kuantan and Siak. (03)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-mulls-including-riau-in-cpp-project-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}