Pertamina's capability to operate CPP queried<\/p>\n
JAKARTA (JP): Oil company Medco Energy's president supported
\nyesterday the government decision not to extend Caltex Pacific
\nIndonesia's contract for the Coastal Plains Pakanbaru oil field
\nafter its 2001 expiry.<\/p>\n
But Medco's president, Arifin Panigoro, did question the
\ncapability of the state-owned oil and gas company Pertamina to
\noperate the oil field.<\/p>\n
\"From a nationalist point of view, why don't we operate it
\n(the CPP oil field) by ourselves? But we must also be realistic.
\nWill the takeover bring more benefits?,\" he asked.<\/p>\n
\"This is not the first time (for Pertamina) to take over (an
\noil field) from foreign contractors. Please, check out how the
\noil fields have performed after they were taken over by
\nPertamina,\" Arifin told reporters after a meeting with President
\nSoeharto.<\/p>\n
Arifin was reporting to the President concerning Medco's
\nactivities.<\/p>\n
Pertamina announced early this week that the government had
\napproved Pertamina's takeover of the CPP oil field from Caltex
\nwhen its contract expired in 2001.<\/p>\n
Pertamina's president, Faisal Abda'oe, said Caltex had
\nrequested an extension on the CPP contract. Pertamina rejected
\nthe request, saying Caltex had refused to meet the condition of
\ngranting a 10 percent share to Pertamina.<\/p>\n
Abda'oe reiterated yesterday that Pertamina had the capability
\nto operate the field, including technology and funding.<\/p>\n
Caltex's president, Baiyaki Hakim, said Caltex had asked the
\ngovernment to reconsider its decision because the exploitation of
\nthe CPP oil field needed the enhanced oil recovery (EOR)
\ntechnology, which Pertamina has not mastered.<\/p>\n
He said the government would lose US$2.1 billion in potential
\nadditional income if Pertamina took over the operation.<\/p>\n
\"Pertamina does not have a good record of operating the oil
\nfields it has taken over,\" Hakim said, pointing as an example, to
\nthe Lirik oil field -- also in central Sumatra -- which Pertamina
\ntook over from the U.S. oil company Stanvac in 1983.<\/p>\n
He said the production of the Lirik oil field kept decreasing
\nafter Pertamina began operating it.<\/p>\n
\"We feel undermined by the statement (Hakim's),\" Abda'oe said
\nyesterday, adding that Pertamina had dozens of engineers who were
\nwell trained by the U.S. oil companies Chevron Corp. and Texaco
\nInc, which co-own Caltex, in the EOR technology.<\/p>\n
He also claimed Pertamina had applied EOR technology in its
\noil fields in Jambi, Prabumulih and Tanjung.<\/p>\n
Arifin noted that the EOR technology was relatively
\ncomplicated, which even Medco has not yet successfully applied in
\nits own fields.<\/p>\n
He said Caltex developed the technology for 15 years.<\/p>\n
\"And the results are unbelievable. (With EOR technology)
\nCaltex has managed to add 300,000 barrels per day (bpd) to its
\nSiak oil field. It is great and the world's most successful
\nresult of EOR technology,\" he said.<\/p>\n
Caltex currently exploits four blocks in Riau: CPP, Rokan,
\nMount Front Kuantan (MFK) and Siak fields. The contracts of Rokan
\nand Siak had been extended to 2020 and 2013, while the MFK
\ncontract will expire in 2005.<\/p>\n
The CPP field produces 77,000 bpd, or less than 10 percent of
\nCaltex's total gross output of 770,100 bpd. (jsk)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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