The government has given until the end of this month for state oil and gas company Pertamina and PT Caltex Pacific Indonesia to complete the negotiation on the joint-development of the Coastal Plains Pekanbaru (CPP) oil block in Riau.
Secretary general of the Ministry of Mines and Energy Djoko Darmono said on Tuesday the government had earlier demanded both companies complete the negotiations last month, but the deadline had been extended to the end of this month given their tough negotiations on the share ownership in the joint venture.
Djoko also said the government wanted Pertamina to control majority shares in the joint venture as recommended by the House of Representatives.
"This is in line with the House's recommendation for us," Djoko said.
Thus far, Caltex demanded wanted a 50 percent stake in the joint venture, but Pertamina wanted to hold a 65 percent stake, offering the remaining 35 percent stake to Caltex.
Pertamina's exploration and president Priyambodo Mulyusudirdjo said the proposed 65 percent-35 percent split was not the final offer, but he noted Pertamina wanted to have a majority shares in the joint venture as requested by the House and the government.
CPP currently produces around 70,000 barrels per day (bpd).
Based on the recommendation of the House, the government decided in 1998 to transfer the development of the oil block to the joint venture of Pertamina and Caltex after Caltex's production sharing contract (PSC) on the block expires in August 2001. (*)
