Local Firms Plan To Take Over Siak Block From Chevron

Pekanbaru, Riau, Dec 26 (ANTARA) - A number of regional government-owned companies (BUMDs) in Riau province plan to take over the management of Siak oil block from PT Chevron Pacific Indonesia whose contract will expire in 2013.

"There have been several BUMDs expressing interest in managing the Siak Block after Chevron's contract expires in 2013," spokesman for the Upstream Oil and Gas Executive Agency (BP MIgas) Elan Biantoro said on Sunday.

Chevron, formerly Caltex, signed a 22-year production sharing contract for the operation of the oil block in 1991. The company earlier operated the block under a contract of work signed in September 1963.

The block currently produces 2,000 barrels per day.

"Besides BUMDs, several national companies such as Bakrie and Medco also have expressed interest in operating the Siak Block," he said.

He said BUMDs had a wide chance to manage the block the more so because the central government had been committed to giving priority to BUMDs.

"Since there are many interested investors the government will call a tender. But BUMDs will receive priority from the government. We will only see their preparedness from the stand point of their financial capability," he said.

To date, there are two BUMDs in Riau managing oil blocks taken over from Chevron. They are PT Bumi Siak Pusako-Pertamina Hulu which manages Coastal Plain Block in Pekanbaru and PT Sarana Pembangunan Riau which manages Langgak Block.

He said the BUMDs had a wide chance to take over the oil block since Chevron had not applied for the extension of the contract until mid 2010. However, the company still could apply for the extension of the contract until 2011 at the latest.

"Until mid-2010 Chevron has not applied for an extension of the contract. This means that they only have a chance to apply for a new contract until 2011," he said.