Interview with Caltex President Humayunbosha
Friday, August 16 2002 - 04:13 AM WIB
Below are excerpts taken from an interview with Caltex President Humayunbosha about the company?s future operation especially after the transfer of the Coastal Plan Pekanbaru (CPP) oil block to the new operator. CPP is one several oil blocks operated by Caltex in Riau province.
Question: How big is the impact from the transfer of the CPP oil block to Caltex?s total production?
Answer: There is a reduction in the production but it is not so significant if compared to the total production. The cut in the production level is about seven percent.
Q: Is it true that the contract of the Mountain Front block in Kauntan will expire in 2005?
A: We are still assessing whether or not we will apply for the extension of the contract. The existing crude oil deposit in the block is not so promising. It is only about 500 barrels per day.
Q: So what is the program of Caltex to boost the crude oil production?
A: We plan to further develop the existing fields especially Duri field 10 and 11. In addition, Caltex has succeeded in raising the production level in the Minas field by 5,000 barrels per day. We have also used new technology to boost the production of the existing oil fields.
Q: How about the new investment plan?
A: We plan to allocate new investment in the amount of about US$1.5 billion to raise production level or between US$300 million and US$400 million a year. The investment will be used to support production activities in Riau. For the development of the Alfa Natuna Block D, we don?t know yet. We have 25 percent stake in the Natuna.
Q: What does Caltex really expect from the government to support new investment?
A: The most important thing is the political stability and more secure condition so that there is a certainty for the company to carry out its new investment programs.
Q: What problems that really impede investment?
A: The most disturbing factors, according to me, are legal and political uncertainties and other uncertainties related to security. Such uncertainties remain a major problem for us to carry out new investments.
Q: Besides Riau, is there any plan to invest in other parts of Indonesia?
A: We don?t have any plan so far, Besides Natuna, we also have interest in the Kisaran block, North Sumatra. But the project has not yet been realized.
Q: What is your comment about the newly established Implementation Body?
A: The establishment of the Implementation Body which will oversee and manage the country?s upstream oil and gas production is an appropriate step so that Pertamina will be able to focus its activities on its core business either in the upstream or downstream.
Q: What do you expect from the Implementation Body?
A: My expectation is simple. The new agency must, for example, able to provide conducive climate for new investment activities, not too bureaucratic and is able to carry out its job to amend the existing production sharing contracts as expected. There should a certainty and consistency in the amended contract. That?s all.
Q: Do you have any plan to enter the downstream industry?
A: The situation and condition are not yet conducive for us to enter the downstream sector. The opening of the downstream sector is just a concept. There is no clear regulation yet related to the downstream industry.
Q: Is it because the downstream sector requires much larger investment?
A: That might be one of the reasons. According to my opinion, the opening of the downstream sector will take time. More over the refinery business is not so promising now. Many companies in the world suffer loss due to their refinery operations. (*)