Govt takes over CPP after negotiations between Riau, Pertamina fails
Thursday, November 30 2000 - 03:00 AM WIB
The government has taken over all issues related to the transfer of the operation of Coastal Plains Pekanbaru (CPP) oil block to Riau province after negotiations between the provincial administration and state oil and gas company Pertamina deadlocked, Bisnis Indonesia reported on Thursday.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Wednesday that the government had decided to take over the case after Pertamina and the provincial administration failed to resolve their difference related to their ownership in the oil block.
"From now on, the issues related to CPP oil block will be overseen by several ministers," he said, adding that the issues related to economic and technical aspect of the oil block will be handled by his ministry under the coordination of the coordinating minister for economy.
Purnomo said that issues related to the demand of the local people to operate the oil block would be handled minister of home affairs under the coordination of coordinating minister for social, political and security affairs.
He did not say what kind of alternatives that would be taken in fulfilling the local demand to manage the oil block but said that Caltex Pacific Indonesia, which currently operates the oil block, could be involved again in the future operation of the CPP oil block.
The government agreed early this year to allow the Riau province to take over the operation of the CPP oil block after the current contract ends in August next year. But the ministry of energy and mineral resource will not issue its final approval until the province finds its partners in managing the oil block.
The province then agreed to follow the government's advice to involve Pertamina and Caltex as its partners in operating the CPP oil block but negotiations on the establishment of a joint venture to operate the oil block failed as all parties demanded larger stakes.
The Riau province insists to get a 70 percent stake in the joint venture and gives the other 30 percent to Pertamina and Caltex. Pertamina refuses the offer and demands to have at least 49 percent stake in the joint venture. (*)