Riau should involve Caltex in operating CPP
Monday, June 26 2000 - 03:15 AM WIB
The provincial administration of Riau province should cooperate with PT Caltex Pacific Indonesia (Caltex) in operating the Coastal Plan Pekanbaru (CPP) oil block because finding other partners would not only take time but also looks irrational, according to political and economic experts.
"Riau's commitment to operate the CPP oil block without the help of Caltex shows more arrogance rather than rational," Edyanus Herman Halim, a noted economist at the University of Riau told Riau Pos over the weekend.
Speaking at a seminar held by local journalists, Edyanus said that Caltex, the current operator of the oil block, not only has a proven track record but also has the technology and the capital, Edyanus said. He added that the priority that must be taken by the local government should now be focused on the preparation of a legal framework for the establishment of a joint venture with the oil giant.
Political expert Andi Alfian Mallaranggeng shared Edyanus's view, saying that the local government should take a political initiative on how to take over the management of the CPP oil block rather than spending most of its time on drafting the technical aspects of the future operation of the oil block.
Speaking at the same seminar, Mallaranggeng said that the new autonomy law which would be fully implemented beginning next year, gives the provincial administrations more power to manage their own natural resources. "But the province should take an initiative to show that the province is capable of resuming such a responsibility.
The ministry of mines and energy has proposed the Riau province to operate the oil block in cooperation with either Pertamina or Caltex or with both of them. But the proposal was rejected as Riau, instead, demanded to operate the oil block with partners of his own choices.
Caltex, which operates the oil block until the contract is expired in August next year, has reduced operational costs due to uncertainty in the future of the oil field, causing the fall in its daily production to some 50,000 barrels from about 80,000 barrels early this year. (*)