Pertamina ready to take over CPP block from Caltex
Monday, July 9 2001 - 03:55 AM WIB
Nevertheless, Pertamina's president Baihaki Hakim said Saturday, Pertamina would not take over the block until disputes between the local and central government over the ownership of the block was settled.
The Riau administration has demanded a large interest in the block.
The government has actually extended the contract period of the block for another year.
"Legally, the one-year period is considered as an extension period of the contract. But for Pertamina, that period is only a transition period. It doesn't mean that Pertamina is not ready to take over the operation of the CPP, but we are waiting for the settlement of the problem (between the central and local administrations)," he said.
CPP has controlled the CPP oil field located in Siak district since 1981.
Meanwhile, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said there were two problems needed to be solved, namely the one-year extension of the contract with Caltex and the portion of ownership between the central and local governments.
Purnomo said the Riau administration would be given a 10 percent stake in the initial stage and the stake would be increased from time to time in accordance with the administration's capability to run the oil block.
In addition, the Riau administration would be given a freedom to sell its crude oil, be involved in the management, Purnomo said.
The authority over oil and gas sector is currently in the hands of the central government, but Purnomo said, the authority will be delegated to local administrations gradually.
Meanwhile, Riau-based daily Riau Pos daily reported on Monday that the Siak regency had demanded its portion of income from the exploitation of the CPP block. In addition, it also wanted that the headquarters for the CPP operation should be based in the regency capital of Siak Indrapura.
"The majority of the CPP crude production is from Siak. And therefore it is fair to demand the headquarters to be located here. There will be many added value if the office is located in our area," said the chairman of the Siak legislative council, Ginonggom Simanjuntak.
Siak regent Arwin AS shared the view that Siak people and administration must be involved in the operation of the CPP block so that local people would get the most benefit from the exploitation of its natural resources.
"Demand for the establishment of the office for CPP block in Siak is normal because if that is materialized, it would benefit local people more. Economic activities around the office will grow," he said.
Caltex is equally owned by American energy firms Chevron and Texaco. (*)