Govt recommends Pertamina as Riau partner in CPP operation

The Ministry of Mines and Energy will recommend the state oil and gas Pertamina as a partner of the Riau province in managing and operating the Coastal Plains Pekanbaru (CPP) oil field next year, a senior official of the ministry has said.

Director general of mines and energy Rachmat Sudibyo told reporters on Saturday that a number of approaches had been made to persuade the provincial administration of Riau to choose Pertamina as its partner.

He said that the province had been asked to form a joint venture with Pertamina to operate the oil block after the current contract currently held by PT Caltex Pacific Indonesia expires in August next year.

The government initially decided to appoint a joint venture between Pertamina and Caltex to take over the operation and the management of the oil field. But the plan was immediately cancelled after President Abdurrahman Wahid early this year decided the province as the most rightful institution to operate the oil block, a move widely seen as a political concession to ease the independence movement in the province.

The province had been given three options to manage the oil field; operating the oil block under a join venture with Pertamina or with Caltex, or with both of the oil giants. But Riau rejected the offer and demanded to manage the CPP oil field with its own partner.

The government then gave the province until August next month to submit a concrete proposal to carry out the job. But until now, the province has yet decide which partners it will cooperate with.

Rachmat said that members of the House of Representatives (DPR) had also recommended Riau to cooperate with Pertamina in taking over the management and operation of the CPP oil field. (*)