Riau seeks control of CPP oil block<\/p>\n
JAKARTA (JP): Riau Vice Governor Rustam S. Abbrus said the
\nprovince was determined to gain full ownership and operation of
\nthe Coastal Plains Pekanbaru (CPP) oil block in Sumatra after PT
\nCaltex Pacific Indonesia's contract on the block expired next
\nyear.<\/p>\n
Rustam said over the weekend the province of Riau was capable
\nof operating the CPP oil block, and urged the central government
\nto heed its aspirations.<\/p>\n
\"Why do people think we're not capable,\" Rustam told reporters
\nduring a break in a seminar on the economy held by the Indonesian
\nDemocratic Party of Struggle (PDI Perjuangan).<\/p>\n
Following a recommendation by the House of Representatives,
\nthe government decided two years ago to transfer the ownership of
\nthe block to a joint venture between Caltex and state oil and gas
\ncompany Pertamina after Caltex's contract expires in 2001.<\/p>\n
Riau's demand for full ownership of the block comes amid
\nnegotiations between Caltex and Pertamina over how they will
\ndivide revenue from the block.<\/p>\n
Minister of Mines and Energy Bambang Susilo Yudhoyono said
\nlast month the government was mulling the possibility of Riau
\nbecoming a partner in the joint venture.<\/p>\n
Bambang said the government would evaluate Riau's financial,
\nmanagerial and technical capabilities.<\/p>\n
Analysts say the province's demand for full control of the oil
\nblock would violate the House's decision to give Pertamina a
\nsignificantly higher stake in the oil block than Caltex.<\/p>\n
Rustam, however, said the House's decision was in conflict
\nwith the Riau council's demand that the province be given
\ncomplete ownership of the oil block.<\/p>\n
He also blasted Caltex president Humayunbosha for not
\nsupporting the province's efforts to secure control of the block.<\/p>\n
Humayunbosha said during an earlier hearing with House of
\nRepresentatives Commission VIII for mines and energy it would be
\nbetter for the provincial administration to demand more tax
\nearnings from CPP, rather than to own a stake and invest in the
\nblock.<\/p>\n
He said the oil business was risky and there was the
\npossibility the province would not get a return on its
\ninvestment.<\/p>\n
Rustam said Riau was prepared to bear the financial risks, but
\nwould not elaborate on where the province would get the funds to
\noperate the block.<\/p>\n
\"Don't think we are too incompetent to handle the oil block,\"
\nhe said.<\/p>\n
Former Pertamina president Martiono Hadianto, however,
\ndismissed Rustam's statements. \"Let's not talk about Riau. Even
\nthe Republic of Indonesia is not capable of fully operating the
\noil block.\"<\/p>\n
According to him, after 30 years in the oil business,
\nPertamina still lacked the skilled labor, money and technology to
\ncompete against multinational oil companies like Caltex.<\/p>\n
He said Riau should prepare itself and enter the oil business
\nstep-by-step, rather than demanding full ownership of the block.<\/p>\n
The CPP oil block currently produces about 70,000 barrels per
\nday, while Caltex, the country's largest oil producer, has a
\ntotal production capacity 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. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/riau-seeks-control-of-cpp-oil-block-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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