Pertamina plans to take over Caltex oil field in Riau

JAKARTA (JP): State oil firm Pertamina has announced plans to take over the Coastal Plain Pakanbaru (CPP) field in Riau from PT Caltex Pacific Indonesia.

Pertamina president Faisal Abda'oe said at a hearing with the House of Representatives's Commission for mines and energy yesterday that he had sent a letter to Caltex saying Pertamina would take over and operate the field from Caltex after its contract expired in 2001.

"Pertamina has the capability to operate the field, including technology and funding," Abda'oe told the commission, adding that the company would need around US$1.3 billion to develop the field from 2001 to 2021.

He said Caltex had requested an extension on the CPP contract. But Pertamina rejected Caltex's request, saying Caltex had refused to meet the condition of granting 10 percent of the field's output to Pertamina, Abda'oe said.

The CPP field, under a 30-year contract with Caltex from 1971, accounts for 34 percent of total acreage exploited by Caltex in Riau province.

But the CPP field's output is only 77,000 barrels per day (bpd) of crude oil, or 10 percent of Caltex's total gross production of some 770,100 bpd -- about half of the country's total output.

Caltex, jointly owned by Chevron Corp and Texaco Inc, currently exploits four fields in Riau which span across 31,000 square kilometers.

The other three blocks are Rokan, Mount Front Kuantan and Siak.

Pertamina has extended the production sharing contracts for the other three fields.

The contract for Siak block has been extended for another 20 years from 1991; the contracts for Rokan and Mount Front Kuantan have also been extended for 20 years from 2005.

Under the new production sharing contracts for the three fields, Pertamina will get 88 percent of the net output (after production costs) and Caltex will get the remaining 12 percent.

The new scheme is an improvement from the 85:15 production sharing ratio agreed upon in previous contracts.

Abda'oe said Pertamina had made preparations to further develop the CPP field so that it could produce more than the current level.

"We will further develop the field and possibly enhance oil recovery," Abda'oe said.

He said the CPP field contained 1.48 billion barrels of crude oil in reserves. (rid/08)