Board of commissioners to interfere in Pertamina-Caltex negotiation;Riau legislature decides to transfer CPP block to Riau government

Minister of Mines and Energy Susilo Bambang Yudhoyono gave until end February for state oil and gas company and American oil and gas company PT Caltex Pacific Indonesia to complete negotiations on share ownership in the Coastal Plains Pekanbaru (CPP) oil block in Riau. If they were unable to reach an agreement by the deadline, the government would intervene in the talks, Bisinis Indonesia reported.

"The government still wants that Pertamina have a majority shares (in the CPP block But the government is not firm in the offered share split of 65 percent for Pertamina and 35 percent for Caltex," Bambang said on Wednesday prior to a cabinet meeting.

Caltex's contract on the CPP block will expire in 2001 and based on the recommendation of the former House of Representatives, the government has asked Pertamina and Caltex to set up a joint venture to co-develop the oil block with Pertamina having the majority shares.

During the negotiations, Caltex asked an equal partnership, but Pertamina offered a 65 percent-35 percent share split.

CPP block produces around 70,000 barrels of oil per day.

Meanwhile, Kompas daily reported the Riau provincial legislature approved in its meeting on Wednesday the provincial administration's plan to take over the oil fields in 2001 and develop the fields by itself.

The legislature also decided that the technical development of the fields was subject to the approval of the legislature.

The legislature also called on the government to revoke the Law No. 8/1971 which gives Pertamina the exclusive right to manage and develop the country's oil resources on behalf of the government. (*)