Pertamina, Riau to take over CPP block next year

Pertamina, Riau to take over CPP block next year

The Jakarta Post, Jakarta

The government expects state-owned oil and gas company
Pertamina and the province of Riau to set up a joint venture to
take over the operation of the Coastal Plains Pekanbaru (CPP)
block from American firm PT Caltex Pacific Indonesia in February
next year, a senior official of the Ministry of Energy and
Mineral Resources announced on Friday.

Director general of oil and gas Rachmat Sudibyo said both
parties were still negotiating the share composition in the joint
venture, but the gap between Pertamina's proposal and Riau's had
narrowed.

Riau insisted on a 55 percent share for itself and a 45
percent share for Pertamina. However, Pertamina wanted equal
partnership, Rachmat said.

Earlier, Riau demanded up to 75 percent stake in the planned
joint venture.

"We hope the CPP block will be taken over by Pertamina and
Riau in February or March next year," Rachmat said.

Located in the oil rich province of Riau, the CPP block, which
now produces about 50,000 barrels of oil per day, was formerly a
concession of Caltex.

The American company's contract over the block expired last
August but the government has extended the contract until August
next year as Riau and Pertamina have yet to reach an agreement
over share composition.

According to Rachmat, the new joint venture needs about six
months to complete the process of taking over the operation of
the oil field.