Siak administration threatens to take Pertamina to arbitration over CPP block

The Siak regency administration in Riau province will take PT Pertamina EP, an upstream arm of state oil and gas company PT Pertamina, to the arbitration over Coastal Plain Pekanbaru (CPP) oil block, the Koran Tempo reported Wednesday.

Siak Regent Arwin A.S. said that his administration will take this case to arbitration if Pertamina fails to meet a new terms of the joint venture in the near future. But he immediately said Siak is ready to negotiate with Pertamina EP.

Siak administration demanded Pertamina EP that the agreement, which was reached on Dec. 28, 2001, should be implemented. Under the agreement, the Siak regency?s PT Bumi Siak Pusako will own a minimum stake of 55 percent and a maximum of 70 percent and the rest will be owned by Pertamina.

?So far, we don?t have an operator and we are operating jointly with Pertamina,? he said.

Meanwhile, Pertamina EP?s commissioner Eteng A Salam said Pertamina EP will respect the 2001 agreement. ? We are currently discussing about this,? Eteng said.

CPP block is a mature field and it requires a proper thought in choosing secondary and tertiary recovery. The oil production from the block reached about 29,500 to 32, 000 barrels per day (bpd) in 2005. (*)