Pertamina agrees Riau administration to get 10% in CPP

State oil firm Pertamina supports a proposal from PT Caltex Pasifik Indonesia (CPI) that the Riau administration should get 10 percent stake at the Coastal Plains Pekanbaru (CPP) after the current contract for the field expires in August 2001.

Pertamina's exploration and production director Gatot Kariyoso Wiroyudo said that the proposal, coming from CPI president Humanyunbosha, was a good one and his party had no objection to the proposal.

"That's good, and Pertamina agrees with that," he said in Jakarta on Tuesday (14/11).

Humayunbosha has suggested the participation of the Riau administration in CPP block. But the Riau administration should take part as a production sharing contractor (PSC), taking part of the 15 percent income split, in which the Riau province gets 10 percent and the remaining 90 percent goes to professional companies

Humanyunbosha noted that the 10 percent out of the 15 percent income split - while the other 85 percent goes to the government - should be enough because the administration would do practically nothing in the operation because oil exploration requires high technology.

Gatot said that the granting of the 10 percent stake to the Riau administration was still in line with the prevailing regulations. He noted that in the production sharing contracts, there was a clause saying that 10 percent of stake should go to an Indonesian entity, which normally was taken by Pertamina.

"If this is used to accommodate the wish of the Riau administration to take part in CPP, that's possible," Gatot said.

Riau deputy governor for economic affairs Raja Abdul Aziz said that his administration remained with its demand, namely 70 percent of income should go to the province, while the remaining 30 percent to the central government.

Raja Abdul Aziz asserted that the Riau administration was capable to manage the oil field, and therefore, it demanded a higher portion. (Godang/Epin)