Caltex?s fate in CPP block unclear
Monday, December 10 2001 - 12:19 AM WIB
?The team from Riau government and Pertamina has not discussed whether or not to include Caltex in the venture that would take over CPP block,? said Rachmat Soedibjo, director general of oil and gas at the ministry of energy and mineral resources Saturday.
Government had made it clear that the contract with Caltex would not be renewed and the management of CPP block will be given to Pertamina and Riau government.
Pertamina and Riau government has come close to settle negotiation over CPP block after the former cut its demand for a share to 50 percent from 90 and the latter had eased its demand from 70 percent share to 55 percent.
Rachmat said the government would leave the decision whether or not to include Caltex in the venture to Pertamina and Riau government.
?However, there?s one thing that they should remember; the take over should not bring oil production down. If they can do that without Caltex, that?s fine,? said Rachmat.
An industry source told Petromindo.com that it would be difficult not to include Caltex in the future operations of CPP block given the fact that the block's production facilities, including oil pipelines, were integrated with the production facilities of other blocks in Riau province currently being operated by Caltex.
If Caltex was not allowed to take part in the future operation of the CPP block, the new operator would have to pay Caltex some fee for the use of the latter's facilities or otherwise build its own facilities to continue production.
"This will add the production cost of the block by US$1 to $2 per barrel," said the source.
Morever, said the source, CPP block is a mature oil field, which would need some huge investment and advance technology to maintain current level of production of 50,000 BPD of oil.
Caltex is Indonesia?s top oil contractor, producing more than half of Indonesia?s crude output. (alex)