Caltex in talks for exploration rights
Caltex in talks for exploration rights
SINGAPORE (Dow Jones): PT Caltex Pacific Indonesia is
negotiating with state-owned Pertamina for additional exploration
and production acreage in Indonesia, Caltex Pacific Managing
Director Bob Galbraith said late Thursday.
It is still evaluating blocks offered under Indonesia's
current exploration tender, he said, adding that the blocks for
which it is in talks aren't included in the tender.
New blocks may allow Caltex Pacific - which primarily operates
mature fields in Riau Province on the island of Sumatra - to
boost production from current levels of 670,000 barrels a day.
The company is losing an average 40,000 barrels a day of crude
output, due to field decline and ongoing roadblocks at its Riau
operations, Galbraith said. Its production averaged 705,000 b/d
in 2000.
Local residents seeking jobs and land compensation have
periodically blocked roads leading to Caltex Pacific's operations
since last year. The most recent blockade began Monday.
The company has invested "a few million" dollars to drill
additional wells in its Coastal Plains Pekanbaru contract area,
which will allow it to produce an additional 5,000-6,000 b/d over
the next several months, Galbraith said.
The additional production will partially offset field
depletion in the block, which peaked at 70,000 b/d a few years
ago. "We will be fairly happy if we can keep output above 50,000
b/d" in the CPP block, Galbraith said.
Caltex Pacific's contract to operate the CPP block expires in
August this year. Its contract hasn't been renewed, and the block
has become the object of a tug of war between Pertamina and the
Riau provincial government.
They are fighting over a diminishing asset, as uncertainty
over the contract's future led Caltex to cut back on investment
in the block.
"We stopped any investment that wouldn't pay out during the
term of the contract," Galbraith said.
Caltex Pacific Indonesia is a joint venture between Chevron
Corp. and Texaco Inc. The two companies announced last year plans
to merge.
Caltex Pacific Indonesia accounts for about half of
Indonesia's crude production.