Pertamina seeks clarification about Gus Dur's statement
Tuesday, May 2 2000 - 03:00 AM WIB
State oil and gas company Pertamina is seeking a clarification from President Abdurrahman Wahid about his statement to allow the involvement of the Riau provincial administration in oil production activities, Bisnis Indonesia reported on Tuesday.
Pertamina's president Baihaki Hakim said on Monday that allowing the Riau provincial administration to manage oil resources could become a bad precedent for the country's oil and gas industry.
"Basically, Pertamina is open to the President's proposal but it is should be made in line with the existing oil and gas law," Baihaki said in his reaction to Abdurrahman's statement. If Riau really wanted to takeover the Coastal Plain Pekanbaru (CPP), the province should cooperate with Pertamina and Caltex Pasific Indonesia (CPI), which are now preparing the establishment of a joint venture to manage the oil block, he said.
In his recent visit to Pekanbaru, Abdurrahman, more popularly called Gus Dur, said that the local people have the rights to manage their own oil resources and would help them to put their demand into reality. "Caltex and Pertamina should therefore delay their negotiations to allow the province establish its own company to take over the oil block," he said.
The government has asked Pertamina and Caltex to form a joint venture company to take over the operation of the CPP oil block after the current contract, now held by Caltex, expires in August, next year. The Riau provincial administration, however, opposes the involvement of the two companies and plans instead to establish its own company to operate the oil block.
Baihaki said that Gus Dur's move would jeopardize Pertamina's ongoing negotiations with Caltex but he refused to stop the negotiations as demanded by Gus Dur, Satunet reported.
He said that he basically supported the involvement of Riau provincial administration in operating the oil block as long as it is made in line with the existing oil and gas law in which all oil productions should be operated under a production-sharing contract with Pertamina.
The CPP oil block, one of several oil wells operated by Caltex in Riau province, produces about 70,000 barrel of crude oil per day, or about 10 percent of the oil giant's crude oil output from the province. (*)