CPP output plunges due to uncertainty in its future operator
Tuesday, May 1 2001 - 04:30 AM WIB
The crude oil production of the Coastal Plain Pekanbaru (CPP) oil block has continued to decline due to uncertainty in its future operator, according to Caltex Pacific Indonesia.
Caltex vice president Wahyudin Yudiana Ardiwinata said on Monday that the CPP production had dropped by almost 30 percent to about 50,000 barrels per day at present from its normal production level of 70,000 bpd last year.
He feared that if the uncertainty over the future management of the company would further cause a drop in the production from the CPP oil block.
Caltex has asked the government to extend its contract over the oil block to ensure there will no more production cut until the new operator takes over its operation, he said as reported by Bisnis Indonesia daily.
The CPP is one of four oil blocks now being operated by Caltex in Riau province. The oil giant will end the contract on the oil block in August this year but the government has yet to decide who will take over the oil field's operation.
Wahyudin said that Caltex's contract to operate the oil block should ideally be extended by between 1.5 and 2 years to allow a smooth transfer of the oil block to the new operator.
The government initially decided to transfer the operation of the oil block to a joint venture between Pertamina and Caltex. But the plan was cancelled after President Abdurrahman Wahid ordered to involve the Riau administration in the joint venture.
Caltex later withdrew from the planned joint venture after the government allocated insignificant ownership to the oil giant. Unlike Caltex, the Riau administration insisted to have 70 percent stake in the joint venture but the demand was turned down.
The government finally decided to allocate 10 percent stake to the provincial administration and the other 90 percent to Pertamina. However, the decision has sparked protests in the province, with the local non-governmental organization threatening to take over the oil block if the province's demand to have 70 percent stake is not fulfilled. (*)