Fate of CPP to be decided before August this year
Tuesday, May 23 2000 - 04:10 AM WIB
The fate of the Coastal Plain Pekanbaru (CPP) oil block in Riau province will be decided before August this year, or one year ahead of the termination of the contract in August, next year, according to Neraca.
Director general of oil and gas at the Ministry of Mines and Energy Rachmat Soedibyo said in Jakarta on Monday that it might be a little bit late to decide the future of the oil block in August but it would ease the ongoing uncertainties, which had caused a decline in its oil prodiction in the oil block.
"We are concerned about the fall in the oil production in the oil block. But we hope the production will be normal again after we decide the right parties to operate the oil block," he said.
The government decided in 1998 to appoint PT Caltex Pacific Indonesia and state oil company Pertamina to jointly operate the oil block when the current contract, now held by Caltex expired in August next year. But President Abdurrahman Wahid later said that the provincial administration had the rights to operate its operate its own oil resources.
The Ministry of Mines and Energy gave the province the options to operate the oil block in join venture with Pertamina, or with Caltex or with the two all together. But the province rejected the three options and instead asked the central government to operate the oil block with companies of its own choices. The provincial demand was accepted but many parties doubted the ability of the province to operate the oil block without the help of Pertamina and Caltex.
Rachmat said that the Riau province has been given a month to submit its proposal and details of its program in operation the oil block before giving a final approval.
According to reports, the production of the oil block has declined sharply in recent weeks due to the uncertainty about the future operator of the oil block. (*)