SBY don't want JK steal the Cepu show

Cepu debacle has been a domestic politic issue right from the start when Soeharto awarded the technical assistance contract (TAC) to his beloved son Tommy's Humpuss Patra Gas. The internationalization of the issue started when Humpuss signed a farm-in agreement with Australia's Ampolex in 1996 with the approval of both Pertamina (that time Faisal Abdaoe was the president director) and the government.

The discovery of huge oil and gas reserves in Cepu the following years combined with the global merger of Exxon & Mobil Oil (which acquired Ampolex) lifted the issue even higher to a geopolitic diplomacy. The new entity, ExxonMobil, then acquired more shares in Cepu in June 2000 to make it 100%, again with the consent and approval from Pertamina (Baihaki Hakim was the president director) and government (Abdurrahman Wahid's administration in which Kwik Kian Gie was the coordinating minister for the economy and Susilo Bambang Yudhoyono as the energy minister).

Cepu entered global politics when ExxonMobil applied for an extension of the contract. I've wrote about this before in Cepu: A political journey.

After four years of yo-yo negotiation, Susilo Bambang Yudhoyono, this time as president, decided to extend the contract last year and change the TAC into production sharing contract (PSC). Pertamina was clearly unhappy to share the block with ExxonMobil under a 45%:45% arrangement (10% for local administrations of East Java, Central Java, Blora and Bojonegoro).

Pertamina did sign the Cooperation Contract (KKS) with Exxon in October 2005. But in the last six months, both companies unmoved to start the drilling of Cepu wells because they can't decide on who should operate the block. Tiring and boring activities such as lobbying and maneuvering have been the menu of the day. It's seems to be endless dispute and went nowhere until Vice President Jusuf Kalla visits the oil field two weeks ago.

"The President had given me the order to have this dispute settled in one week," he said. But why he mentioned the word president? First to put a weight on the issue. The second, to give credit to the president that he is a decisive leader.

But when Kalla disclosed further the criteria for Cepu operatorship (technology, experience, financial capability, bla bla bla) politians quickly interpret that as a sign of government's leaning toward Exxon. Days after, energy minister Purnomo Yusgiantoro said that Pertamina's proposal to implement rotating system of operatorship simply can't be accepted. Other key minister in the debacle, minister for state-owned enterprises Sugiharto, follow suit.

Pertamina then realized the whole situation that government might finally appoint Exxon. They arranged some pressing statements. All of a sudden, a pressure group established and organized some events to criticize government. Early this week, two DPR commissions (VI & VII) conducted a hearing with some cabinet members with initial agenda of domestic gas policy amid shortage supply to fertilizer companies. But the hearing, attended by Purnomo and Sugiharto among others, quickly shifted its focus to Cepu debacle.

Debate heated up when DPR members split on how to respond politically government's stance on Cepu. Some members wanted DPR to formally suggest government to appoint Pertamina as the operator, but others rejected.

The opposition side urge government to stand up and do not bow to US government's pressure, steer the nationalism sentiment, etc. Ministers simply afraid of such pressures and put the Cepu decision on the back burner.

Kalla comes to defense saying the final decision on Cepu is in the hands of president SBY, scheduled to land here 5 PM this afternoon from Myanmar. For sure, Kalla pretty much involved the decision making process for Cepu, just like his much-criticized initiatives for Aceh Peace Deal last year. Only that this time, SBY don't let Kalla steal the show again. He want to tell public that as the president, he could make tough decisions like when he approved the 180% hike on fuels price.

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