Riau to open to tender for CPP operation
Tuesday, June 27 2000 - 04:15 AM WIB
Governor of Riau province H. Saleh Djasit said on Monday that the provincial administration would soon open a tender to select a right partner in taking over the management and operation of the Coastal Plain Pekanbaru (CPP) oil block next year, Riau Pos reported on Tuesday.
The governor said that the tender would determine which the right partner to jointly operate the oil block after the current contract, now held by Caltex Pacific Indonesia, expired in August next year.
He believed that many companies would take part in the tender but he said the local government would only appoint a company, which would promise a better benefit to the local people.
According to the team for the preparation of the operation of the oil block, the local government would establish a consortium of local companies to operate the oil block. The consortium will work with a professional oil company that will be selected through the tender process in operating the oil bloc, which at present has 28 oil fields or 297 oil wells.
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. (*)