Riau to set up consortium to manage CPP oil block
Wednesday, May 3 2000 - 03:00 AM WIB
The provincial administration of Riau will form a consortium to manage the Coastal Plains Pekanbaru (CPP) oil block, Riau Pos reported on Wednesday.
Riau governor Saleh Djasit said in Pekanbaru on Tuesday that the legal framework for the establishment of the consortium would be soon established to ensure the smooth operation of the consortium in managing and operation the oil block.
"We are capable of managing the oil block ourselves. So don't under estimate us," the governor was quoted as saying by the daily.
The governor criticized Pertamina's cool reaction against President Abdurrahman Wahid's statement. "Pertamina's insistence to operate the oil block alone reflects its arrogance," he said.
In his recent visit to the province, Abdurrahman Wahid, more popularly called Gus Dur, said he would prefer the local company to operate the CPP oil block after the current contract ended in August, next year.
Pertamina's president Baihaki Hakim said the state oil and gas company did not oppose the President's call but he insisted that whoever granted to take over the oil block, which is currently operated by PT Caltex Pacific Indonesia should be based on the existing law.
The Ministry of Mines and Energy also has the same view because under the existing law, all oil and gas activities in the country should be operated under production sharing contracts with the state oil and gas company.
Mines and Energy Minister Bambang Susilo Yudhoyono said on Tuesday that his office and Pertamina had not yet issued a formal statement regarding the President's call. "We will meet this evening to discuss the problem," he was quoted by Republika daily as saying.
The government has asked Pertamina and Caltex to form a joint venture to manage the oil block. But the establishment of the joint venture has not progressed well as both companies want majority stake in the company. Both companies rejected the involvement of the Riau province in the joint venture.
Baihaki later said that the Riau province should become a part of the joint venture if it really wanted to involve in the operation of the oil block. But he warned allowing the province to operate the oil block alone would become a bad precedent for the country's oil and gas industry. (*)