Gus Dur joins forces with Riau to operate oil bock
Friday, June 9 2000 - 04:30 AM WIB
President Abdurrahman "Gus Dur" Wahid and his friends will likely use Petro Oil, a local company formerly owned Bob Hasan and Tomy Soeharto as a vehicle to obtain an ownership in the Coastal Plain Pekanbaru (CPP), which will be handed over to the provincial administration of Riau next year, sources told Republika.
The sources said in addition to Petro Oil, China Petroleum will also forge an alliance with the Riau government in operating the oil block.
According to the sources, Petro Oil was taken over from Soeharto's close friend Bob Hasan and his youngest son Tommy by a company involving Abdurrahman's close friends Minister of Foreign Affairs Alwi Shihab and State Minister of Investment and State Enterprises Rozi Munir.
"At present Petro Oil is operated as a trading house to import oil from Iraq," the sources said, adding that the company received a fee for its services. But it is not clear whether the company imports the crude oil from Iraq on the behalf of state oil and gas company Pertamina, which still purchases part of its crude oil need from Middle East to feed its oil refinery in Cilacap, Central Java.
The sources also said that China Petroleum tried to enter the CPP oil block through Minister of Trade and Industry Luhut Panjaitan, a close aide of President Abdurrahman Wahid. Luhut, who was Indonesian ambassador to Singapore before his current job, is known for his close relationship with Chinese businessmen.
Some members of the House of Representatives earlier charged that Gus Dur's surprising move to allow the Riau province to operate the oil block was motivated more by his personal interest to get involved in the CPP operation rather than due to his intention to empower the province's economy.
The government initially asked Pertamina and Caltex Pacific Petroleum to jointly operate the CPP oil block but Gus Dur later stepped in and declared that Riau was the rightful party to operate the block. Minister of Mines and Energy Bambang Yudhoyono had no choice but agreed with the proposal.
The minister proposed the Riau province to operate the oil block in cooperation with either Pertamina or Caltex or with both of them. But the proposal was rejected as Riau, instead, demanded to operate the oil block with partners of his own choices.
Caltex, which operates the oil block until the contract is expired in August next year, has reduced operational costs due to uncertainty in the future of the oil field, causing the fall in its daily production to some 50,000 barrels from about 80,000 barrels early this year. (*)