CPI boss gets into hot water due to CPP comment
Saturday, May 13 2000 - 04:00 AM WIB
The chairman of PT Caltex Pacific Indonesia (CPI) Haroen Al Rasyid has been into the hot water following his criticism against the Riau provincial administration's plan to operate the Coastal Plain Pekanbaru (CPP) oil block, once the current contract expires next year.
The Riau Pos reported that the statement made by the former president of the oil giant on the province's plan to take over the oil block angered the local intellectuals.
"He is talking on the behalf of foreign companies and his statement reflects that Caltex does not have a good will to improve the welfare of the local people," Muchtar Ahmad, the rector of the province's University of Riau.
Muchtar said that Caltex which has raised billions of dollars from its 60 years of operations in the province should be more sensitive about the locals' aspiration. "The oil resources in the province have given a lot of benefits to Caltex but not to the Riau people," he said.
In his statement published in the Riau Pos, Haroen said that the Riau province's plan to operate the CPP oil block was not only questionable but also could create a bad precedent for the country's oil and gas industry a whole. According to him, if Riau could realize its plan, then other provinces will demand the same thing and it will discourage foreign investors.
After months of efforts, the government finally bowed recently to the Riau provincial administration's demand to control the CPP oil block, which is now operated by Caltex. The move will allow the province to name its own partners in operating the oil block.
Haroen said that all oil activities should be based on the existing law in which Pertamina is the only company, which is responsible to manage the country's oil and gas resources. Under the law, all oil fields should be operated under a production-sharing contract with Pertamina, which in the normal situation receives 85 percent of the oil output while its operator gets the other 15 percent.
It is not clear, however, if the government's decision to allow the province to enter the oil business, will mean that it will take the place of Pertamina or merely as an operator of the oil block. (*)