Pertamina, Caltex likely to operate CPP block jointly

JAKARTA (JP): State-owned oil and gas firm Pertamina and its largest oil contractor PT Caltex Pacific Indonesia may jointly develop the Coastal Plains Pekanbaru (CPP) oil block in Riau, after Caltex's contract on the block expires in 2001.

Director General of Oil and Gas at the Ministry of Mines and Energy, Soepraptono Soelaiman said on Wednesday that the cross ministerial task force, which was formed by the government to study the best alternatives for the development of the block, recommended that the block be jointly operated by Pertamina and Caltex.

"The final results of the meeting of the task force last night pointed to that (the joint operation alternative)," Soepraptono, who is a member of the task force, was quoted by Antara as saying.

Soepraptono, however, noted that Minister of Mines and Energy Kuntoro Mangkusubroto had the final say.

Kuntoro earlier told the House of Representatives's Commission V for mines and energy, industry and trade, cooperatives, investment and environment that he would consult with the commission before making the final decision.

CPP block currently produces 77,800 barrels of oil per day (bpd), accounting for 9.7 percent of Caltex's production of 765,000 bpd. Caltex is the country's largest oil producer.

Caltex, which is jointly owned by U.S. giant oil companies Chevron Asiatic Ltd and Texaco Overseas Petroleum, pushed for years to extend its contract on the block for a further 20 years, but President Soeharto decided last year to transfer the exploitation of the block to Pertamina.

Soeharto's successor B.J. Habibie decided to review the decision given Pertamina's financial woes amid the monetary crisis.

Kuntoro instructed the task force, composed of officials from the Ministry of Mines and Energy, the Ministry of Finance, the National Development Planning Board, and the State Secretariat, to weigh four alternatives for the future development of the block -- allow Caltex to continue developing the oil block; transfer it to Pertamina; ask both to cooperate in developing the block; or put it up for an open tender.

Executives at both Caltex and Pertamina have indicated that they could work together to develop the block.

Soepraptono said the task force proposed the government make "a more favorable production sharing contract (PSC)" on the block.

"The number of the government's shares has yet to be discussed," he said.

Except for oil projects in frontier areas, the government normally collects 85 percent of income from Pertamina's contractors and leaves the remaining 15 percent for the contractors. (jsk)