Govt almost certain to allow Caltex to operate CPP block for another year

The government is almost certain to extend the license for PT Caltex Pacific Indonesia for another year to operate the Coastal Plain Pekanbaru (CPP) oil field in Riau Province, according to expert staff of the ministry of mineral resources and energy Kardaya Warnika.

Kardaya said on Thursday that the move was necessary because the government until has not been able to decide who would operate the CPP block after Caltex would end its control in August under the original contract.

"According to the existing law, the appointment of the new operator must be made one year before the plan is realized. The objective is to ensure a complete and thorough preparation," Kardaya said.

He said that based on the argument, if the government has now decided the new operator, it could only take over the block in May 2002.

The appointment of the new operator for the CPP block had become a long debate after the Riau provincial administration, and the Siak district administration, as well as the state-owned oil and gas firm Pertamina wanted to become the operator.

The uncertainty has caused CPP production level to decline from 68,000 barrel per day to 50,000 barrel of oil per day, Kardaya said.

He said that if Caltex's license is extended, the government demanded the production level to be raised to 64,000 bpd.(arry-d)