Pertamina determined to take over CPP field

JAKARTA (JP): State-owned oil and gas company Pertamina asserted yesterday the government would not change its decision allowing the company to take over the Coastal Plains Pakanbaru (CPP) oil field in central Sumatra from PT Caltex Pacific Indonesia (CPI).

"The government has allowed Pertamina to operate the CPP oil field because it believes Pertamina is really capable of operating it," Pertamina senior vice president for exploration and production Priyambodo Mulyosudirjo said yesterday.

Priyambodo even hinted that Pertamina might also take over other highly potential oil concessions after the end of their contracts.

He said Minister of Mines and Energy I.B. Sudjana had sent a letter to Pertamina on June 9 saying President Soeharto had approved Pertamina's take over of the CPP oil field after Caltex's contract for the field expires in 2001.

"We think the government will be consistent with its decision," he said.

Priyambodo said Pertamina would also consider taking over other oil fields in the country -- particularly the ones which still had large potential -- when their contracts expired.

"The possibility that a contract will not be extended is well understood by contractors. Therefore, the fact that the government does not extend the CPP contract should not be considered a big issue and won't affect investment climate in the oil and gas sector," he said.

CPI president director B. Hakim said on Tuesday the government would lose US$2.1 billion in potential additional revenues if Pertamina took over the CPP field, because Pertamina had not mastered the enhanced oil recovery (OER) technology.

Hakim said Caltex would be capable of producing 423 million barrels from the oil field throughout the 20-year extension period, including 250 barrels as a result of the application of the EOR technology.

"We think Caltex underestimates our capability. We are not a newcomer in this business," Priyambodo said.

He said Pertamina had well prepared its human resources and funding to operate the field.

He added that about 40 Pertamina employees had been trained by Chevron Corp. and Texaco Inc, which co-own Caltex, on EOR technology.

"We have also applied EOR technology at some of our oil fields in Jambi, Prabumulih and Tanjung," he said.

When asked if Pertamina would operate the oil field by itself or give it to other contractors, Priyambodo said, "What I can say is that Pertamina is for the moment determined to operate the oil field by itself, and I believe the government does not want Pertamina to act only as a broker for this field."

Caltex currently exploits four blocks in Riau: CPP, Rokan, Mount Front Kuantan (MFK) and Siak fields. The contracts of Rokan and Riak had been extended to 2020 and 2013 respectively, while the MFK contract will expire in 2005.

The CPP field produces 77,000 bpd or less than 10 percent of Caltex's total gross output of 770,100 bpd. (jsk)