Riau upset over delay in transfer of CPP operation
Monday, August 28 2000 - 04:00 AM WIB
The Riau province administration has expressed disappointment over the delay in the transfer of the management and operation of the Coastal Plains Pekanbaru (CPP) oil block to the province, saying that the statement regarding the delay was confusing.
"The statement was not only strange but funny? it is hard to understand given the fact that the ongoing negotiations have been progressing well and is near completion," the spokesman for the province Ruskin Har told Riau Pos about the possible delay in the transfer of the oil block.
Secretary General of the Ministry of Mines and Energy Djoko Darmono said Friday that the appointment of Riau as the operator of the CPP oil block could be delayed until the end of this year as the province and Pertamina were still divided over their ownership in the oil block.
The government initially expected to transfer the operation and management of the oil block in August, a year ahead of the termination of the production-sharing contract now held by PT Caltex Pasific Indonesia (CPI).
Ruskin acknowledged that Riau had yet touched issues related to the ownership composition in the negotiations with Pertamina. "But most of the important aspects in the handover of the oil block had been agreed," he added.
Earlier reports said that Riau province had reached an initial agreement to cooperate with Pertamina, Caltex in operating the CPP oil block beginning in August next year.
The government initially gave three options to Riau to operate the CPP oil block, which is currently operated by Caltex. The provincial administration under the three options was offered to manage the oil field in joint venture with Pertamina, or with Caltex or with both of two oil giants. But the province rejected the offer and demanded to select its own partners.
The Riau, however, later abandoned its own option and returned to a negotiation table to work with both Caltex and Pertamina in operating the oil block.
The Riau administration has established a new company to take over the management of the oil block after the current contract expired in August next year. The new company PT Riau Makmur Petroleum will represent the local government in the operation of the oil block. (*)