RI wants majority share in joint venture with Caltex
RI wants majority share in joint venture with Caltex
JAKARTA (JP): The government wants state oil and gas company
Pertamina to have a majority share in a joint venture with PT
Caltex Pacific Indonesia to develop the Coastal Plains Pekanbaru
(CPP) oil block in Riau, a top official said on Tuesday.
Secretary-general at the Ministry of Mines and Energy, Djoko
Darmono, said it was in the nation's interest that Pertamina
control the majority share in the new joint venture.
"This is in line with a House of Representatives
recommendation for us," Djoko told reporters at his office.
Djoko made the statement in view of the disagreement between
Pertamina and Caltex over a share composition in the joint
venture to develop the CPP oil block.
Based on the House recommendation, the government decided in
1998 to transfer the development of the block to a joint venture
of both companies after Caltex's production sharing contract
(PCS) on the block expires in August 2001. The government called
on both companies to negotiate the share ownership.
The block currently produces about 70,000 barrels per day,
while Caltex produces a total of 750,000 barrels per day in four
oil blocks in Riau.
During negotiations, Pertamina proposed to hold a 65 percent
stake in the joint venture against 35 percent for Caltex.
However, Caltex, the country's biggest oil producer, demanded
a 50 percent stake.
Djoko said the government was firm with the decision to give
Pertamina majority shares in the joint venture.
"A majority could also mean 51 percent for Pertamina against
49 percent for Caltex," Djoko said, adding the government wanted
Pertamina to have larger shares in the company.
Djoko said the government had set the end of February as the
deadline for both companies to complete negotiations, adding he
was optimistic that both companies would complete the
negotiations soon.
Separately, Pertamina director of exploration and production
Priyambodo Mulyosudirjo said Pertamina's offer of 65 percent
against 35 percent was not a final bid.
He said Pertamina sought a win-win solution in its
negotiations with Caltex and would not force Caltex to accept
Pertamina's offer.
"We comply with the government's demand for a majority stake
for us, and we translate it into a 65 percent to 35 percent share
composition," Priyambodo said on the sidelines of the 27th
Indonesian Petroleum Association (IPA) convention at the Jakarta
Convention Hall.
He said Pertamina hoped to complete the negotiations soon but
with Caltex insisting on a 50 percent ownership, Pertamina
expected the government to interfere to avoid a deadlock.
"The government wants us to jointly operate the CPP block with
Caltex, so the government should make the final decision on how
much of a majority share Pertamina should own," he said, adding
that Pertamina was not in a position to give a final decision on
the share composition.
The company, jointly owned by U.S. giant oil companies Chevron
Corp. and Texaco Inc., is currently developing four blocks in
Riau: CPP, Rokan, Mount Front Kuantan and Siak. (03)
JAKARTA (JP): The government wants state oil and gas company
Pertamina to have a majority share in a joint venture with PT
Caltex Pacific Indonesia to develop the Coastal Plains Pekanbaru
(CPP) oil block in Riau, a top official said on Tuesday.
Secretary-general at the Ministry of Mines and Energy, Djoko
Darmono, said it was in the nation's interest that Pertamina
control the majority share in the new joint venture.
"This is in line with a House of Representatives
recommendation for us," Djoko told reporters at his office.
Djoko made the statement in view of the disagreement between
Pertamina and Caltex over a share composition in the joint
venture to develop the CPP oil block.
Based on the House recommendation, the government decided in
1998 to transfer the development of the block to a joint venture
of both companies after Caltex's production sharing contract
(PCS) on the block expires in August 2001. The government called
on both companies to negotiate the share ownership.
The block currently produces about 70,000 barrels per day,
while Caltex produces a total of 750,000 barrels per day in four
oil blocks in Riau.
During negotiations, Pertamina proposed to hold a 65 percent
stake in the joint venture against 35 percent for Caltex.
However, Caltex, the country's biggest oil producer, demanded
a 50 percent stake.
Djoko said the government was firm with the decision to give
Pertamina majority shares in the joint venture.
"A majority could also mean 51 percent for Pertamina against
49 percent for Caltex," Djoko said, adding the government wanted
Pertamina to have larger shares in the company.
Djoko said the government had set the end of February as the
deadline for both companies to complete negotiations, adding he
was optimistic that both companies would complete the
negotiations soon.
Separately, Pertamina director of exploration and production
Priyambodo Mulyosudirjo said Pertamina's offer of 65 percent
against 35 percent was not a final bid.
He said Pertamina sought a win-win solution in its
negotiations with Caltex and would not force Caltex to accept
Pertamina's offer.
"We comply with the government's demand for a majority stake
for us, and we translate it into a 65 percent to 35 percent share
composition," Priyambodo said on the sidelines of the 27th
Indonesian Petroleum Association (IPA) convention at the Jakarta
Convention Hall.
He said Pertamina hoped to complete the negotiations soon but
with Caltex insisting on a 50 percent ownership, Pertamina
expected the government to interfere to avoid a deadlock.
"The government wants us to jointly operate the CPP block with
Caltex, so the government should make the final decision on how
much of a majority share Pertamina should own," he said, adding
that Pertamina was not in a position to give a final decision on
the share composition.
The company, jointly owned by U.S. giant oil companies Chevron
Corp. and Texaco Inc., is currently developing four blocks in
Riau: CPP, Rokan, Mount Front Kuantan and Siak. (03)