DEVELOPMENTS IN SUMATRA AFFECTING THE PETROLEUM INDUSTRY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R001001440001-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: April 23, 1999
• Sequence Number: 1
• Publication Date: October 6, 1953
• Content Type: REPORT

Approved For Release 1999/09/10 : CIA-RDP83-00423R001001440001-0
II o
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Country: Indonesia
Subject: Developments in Sumatra
Affecting the Petroleum
Industry
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Date Ac
:
Date of I 5X1 A
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Date: 6 October 1953
25X1A
25X1A
1. "Political Developments - General: The outstanding developments
in Indonesia, and one which could lead to serious consequences,
not only for the Indonesian Government, but also for petroleum
companies, if not promptly controlled, was the concerted outbreak
of widespread and serious disturbances in Atjeh (Worth Sumatra) in
the last half of September.
2. "Atjeh was one of the last parts of the Indies to be brought under
Dutch control, but only after a series of wars which lasted from
1873 to 1904, and which taxed the energies and resources of the
Dutch to such extent that the development of other outlying terri-
tories had to be postponed for many years. Even at the last, the
Dutch control in Atjeh remained less firm than in other parts of the
Indies and they were obliged at all times to maintain strong military
garrisons at strategic points. Following the Japanese capitulation,
the Allied Forces did not occupy Atjeh and, although Atjeh became a
part of the Republic, when Indonesia achieved independence, and had
representation in Parliament, the Achinese as a whole never did
fully accept the authority of the Central Government and tended to
run their affairs to suit themselves, as if in an automonous state.
This last has been one reason for the delay regarding the final
disposition of the North Sumatra oil fields of BPM in southern Atjeh.
3. "The Indonesian Government is reported to be taking vigorous steps
to cope with the uprisings in Atjeh, both by military and other
measures. It is important that these steps will soon be successful,
as a long series of military operations could place a severe strain
on the Indonesian economy at this stage and probably limit the success
of the Indonesians in bringing law end order in Java, not to mention
Souta Celebes, which is also a trouble spot.
4. "Company Problems: Labor Relations - Caltex Pacific, in a meeting
with Central Tdediation Board's Inquiry Committee, agreed to submit
new proposals with regard to PERBUM's ddmands, taking also into
consideration the demand on long leave. The new proposals were for-
warded in the beg}nning of September,
0c~nRN TO CIA
A proved For Release 1999/09/10 : CIA-i DP83-00423R001001440001-0
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Approved For Release 1999/09/10 : CIA-RDP83-00423RO01 001440001 -0
25X1A
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5. "Exchange License Negotiations: Active negotiations are being
carried on with the Exchange Control for renewal of the Caltex Paci-
ficts Exchange License, certain provisions of which expire 31 Dec 53.
6. "A letter was submitted to the Honetary Board pressing for a de-
cision by mid-September LI95~7and recommending an extension of
not less than six years of Caltex Pacific's Exchange License, along
the same lines of the present agreement. A reply to this letter
received on September 25 from the c-ionetary Board contains certain
objectionable stipulations and other provisions which require further
clarification. However, it is felt that the "Exchange Control's
proposals represent a serious effort on their part to arrive at a
workable arrangement for both parties. A detailed study is now
under way.
7. "Tax Abatement: The Indonesian Government has entered into a firm
commitment with Standard Vacuum regarding a tax reduction program
which should, in effect, arrive at an overall 50/50 profit distri-
bution. It was understood that draft directives would be issued to
accomplish the same result for BPM and Caltex Pacific, but these
have not yet been forthcoming."
Approved For Release 1999/09/10 : CIA-RDP83-00423RO01 001440001 -0