Caltex ready to have minority shares in CPP block

Oil and gas company PT Caltex Pacific Indonesia said it was ready to become a minority shareholder in the joint venture with state oil and gas company Pertamina to develop Coastal Plains Pekanbaru (CPP) oil block in Riau, Neraca daily reported.

Caltex's president Humayunbosha said in a hearing with the House of Representatives' Commission VIII for mines and energy on Wednesday that initially, Caltex insisted on setting up equal partnership with Pertamina to develop the oil block after the latter's contract on the oil block expired in 2001.

But, he said Caltex was at last ready to allow Pertamina to take majority stake in the joint venture to support Pertamina's wishes to become a world-class oil and gas company.

Neraca said Humayunbosha did not specify the share composition proposed by Caltex to Pertamina during the hearing, adding the share composition was being discussed by Caltex's shareholders, American firms Chevron and Texaco.

But Bisnis Indonesia reported that Humayunbosha told the legislators Caltex proposed to have 49 shares, leaving the remaining 51 shares to Pertamina.

Satunet reported Humayunbosha also said during the hearing that Caltex did not support the plan of the Riau provincial administration to have shares in the joint venture.

He said the provincial administration had to put some equity in the joint venture if it wanted to have stake in the joint venture and there was the possibility that the provincial administration could not get return on its investment given the risky nature of oil business.

Humayunbosha said it would be better for the provincial administration to expect larger shares in the government revenue from the oil block.

Under the production-sharing contract, oil and gas contractors deliver 85 percent of its production to the government. (*)