Conflict on CPP oil block ownership continues

The conflict between Siak and other regencies in Riau on their ownership in PT Bumi Siak Pusaka, that will take over the operation of Coastal Plain Pekanbaru (CPP) oil block, should be immediately settled.

Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Rachmat Sudibyo, warned that if the conflict was not settled, it would affect the transfer of the management and operation of the oil block from Caltex in August this year.

He said that the provincial administration should be able to solve the problem and settle the case amicably. "It is the province?s internal problem and the central government will not try to intervene it," he added.

Siak, one of regencies in oil rich province Riau, has demanded to acquire a 70 percent interest in PT Bumi Siak Pusako oil block but it has been rejected by the provincial administration.

Riau govenor Saleh Jasit has denied the Siak regency?s demand although larger parts of the oil block are located in the regency. "Giving the regency a control could incite jealousy among other regencies in the province," a source told the daily.

The CPP oil block is part of Caltex Pacific Indonesia?s oil concession areas in Riau. The oil block will, however, be transferred to Pertamina in August after its contract ends. At present, the oil block produces 40,000 barrels per day, far lower than 70,000 barrels per day in the previous years.

According to Caltex president Humayunbosha the company is currently preparing the transfer of the CPP operation PT Bumi Siak. (*)