Riau establishes company to develop CPP block
By George Blunt
Wednesday, July 5 2000 - 10:30 AM WIB
The Riau provincial administration has established a company PT Petroleum Riau Makmur to take over the development of the Coastal Plains Pekanbaru (CPP) oil block from American oil and gas company PT Caltex Pacific Indonesia after the latter's contract on the block expire in 2001.
Riau's governor Saleh Djasit said in a prepared statement presented during a hearing with the House of Representatives' Commission VIII for mines and energy on Wednesday the company was wholly owned by the province.
Several parties had expressed readiness to provide financial supports for the new company that it did not need to look for overseas loans, Djasit said.
He added skilled oil workers, including those who have been working at the CPP block, other oil experts have expressed readiness to be employed by the new company.
The company would be managed by experienced people, Djasit added, noting that the company might recruit expatriates to support the management.
Djasit said the province established the company at the request of the Ministry of Mines and Energy which made it a requirement for the province to develop the oil block.
The central government has allowed the province to develop the block but it had not yet made any decision whether to allow the province the block itself or in joint ventures with state oil and gas company Pertamina and Caltex.
The ministry has asked the provincial administration to make a detailed proposal on its plan to take over the oil block, but Djasit said the province faced difficulties in making the proposal due to the lack of technical data on the oil block.
He said the ministry had long promised to provide the data but thus far it had yet to deliver on the promise.
Djasit said the province expected the central government to decide in the near future that the oil block would be transferred to the province. The block produces about 70,000 barrels of oil per day.
Djasit held a hearing the Commission together with East Kalimantan, South Kalimantan and Central Kalimantan governors. (*)