Caltex clarifies

We would like to extend our appreciation for the publication of an article about PT Caltex Pacific Indonesia (Caltex)'s request for extension of the Coastal Plains Pekanbaru (CPP) Block in The Jakarta Post, April 18, 2001, page 12.

We would further like to clarify a couple of statements in the story, so that there is no misunderstanding as to our position on CPP.

First, in the paragraph which states "Caltex decided to withdraw from negotiations, after the government also allowed Riau to have a stake in CPP", we would like to emphasize that our reason for temporarily withdrawing from the negotiations was because the negotiations had now entered a phase between two government entities, the Riau government and the Central government, debating over which entity should have control over management of the block. Caltex, as a non-political entity, has not been a party to those discussions. However, we fully expected to rejoin the negotiations on joint interest ownership of the PSC once the management issue was resolved.

Next, we'd like to correct the use of the term "unattractive", with the more proper term "uneconomical". As you know, Caltex has a long standing and excellent relationship with the people and governments of Riau. Future opportunities to partner or work with Riau will always be attractive to Caltex. To date and in regard to CPP, Caltex has not been offered any commercially or economically attractive option involving our continued participation. We will, of course, seriously consider any commercially or economically attractive option involving our continued participation in the CPP, should one be offered.

We would also like to clarify the intent of the environmental study currently underway. CPP is extremely proud of our environment performance in the conservation areas that encompass the CPP Block. Site restoration is an ongoing process throughout all our contract areas. Normal industry practice when working interest ownership of a producing oil field transfers in part or in whole to other parties is to conduct a baseline environmental assessment to document the status of the concession at the time of the transfer. It is for that purpose that we are conducting the study in consultation with Pertamina. That study has been underway for many months only because of the extensive land area within the Block.

HARRY BUSTAMAN

Manager, Corporate Communications

Caltex

Jakarta