New investment needed to boost CPP oil production

The oil production from the Coastal Plains Pekanbaru (CPP) will plunge sharply from the current output level if no investment is injected into the oil block, according to a spokesman for PT Caltex Pacific Indonesia.

Poedoyo Oetomo said in Pekanbaru on Tuesday that the total production from the oil block during the 10 years after the current contract ends in August would reach only 131.1 million barrels, if the new contractor did not inject new investment.

The government recently extended the contract to another one year to August 2002 to Caltex to operate the CPP oil block to allow the smooth transfer of the oil block operation to new operator. The government initially planned to appoint a joint venture between Pertamina and the Riau administration to take over the oil block. But the local government rejected the plan as it was allowed only to have a 10 percent stake in the planned joint venture.

Poedyo said that Caltex had committed to spending about $8 million in new investment to increase the production level to 4.5 million barrels during the one-year period.(*)