Taking over CPP oil block does not breach the law
Thursday, February 24 2000 - 02:42 AM WIB
Taking over the rights to operate and own the Coastal Plain Pekanbaru (CPP) oil block from state-owned company Pertamina does not violate the law, according to a senior mining expert and former mining minister Professor Sadli.
He said on Wednesday that the Riau provincial administration also faced no legal constraints to appoint any company such as PT Caltex Pasific Indonesia (CPI) to reoperate the mining site when the current contract expired next year.
Sadli, who was in Pekanbaru as part of the mission of the association of Indonesian economists, was commenting on the demand from the local people to take over the ownership of the oil block.
He, however, warned that the provincial administration should be financially prepared and ready to bear at least a half of the cost for the operation of the oil mining. Sadli acknowledged that the Law No 8 issued in 1971, which appoints Pertamina as the single owner of oil and gas mining rights in the country should be first amended to enable the province realize its plan.
According to the law, Pertamina on behalf of the government controls all oil and gas mining rights in the country. The company might transfer the rights to other parties to operate oil fields under a production sharing contract. (PSC). Its contracts with Caltex to operate the CPP oil block will expire next year.
Sadli said that former mining minister Kuntoro Mangkusubroto had proposed a bill to the House of Representatives to amend the law but the bill was rejected due to resentment from Pertamina. (*).