Pertamina plans to take over Caltex oil field in Riau

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)