Govt to consult with Riau before deciding the fate of CPP field

The government will consult with the legislative council of Riau province before deciding the fate of the Coastal Plain Pekanbaru (CPP) oil field, Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said.

"We have to consult the local councilors (DPRD) before announcing the decision on the future of the CPP oil field," Purnomo said as reported by Riau Pos on Tuesday.

The minister earlier said that the composition of the share ownership in a joint venture that will run the operation of the CPP oil block after Caltex Pacific Indonesia ends its contract in August will be announced in January.

The ministry has asked President Abdurrahman Wahid to give majority stake to Pertamina and to limit the ownership of Riau to 20 percent. This proposal has angered the local authority and legislators who earlier demanded at least 70 percent in the oil block.

Under the existing regulation, oil fields are 100 percent held by the government. The oil concession could be developed by state owned or private companies under a production-sharing contract of 85 percent against 15 percent in favor of the government, which in most cases, is represented by Pertamina.

As many as 15 percent of the government's share from the oil production should be given to the provincial administration and the other 85 percent to the central government.

A special delegation led by Riau governor province Saleh Djasit and the chairman of the local council Chaidir had recently met President Abdurrahman Wahid and Vice President Megawati Sukarnoputri to express the local people's demand.

The delegation wanted the government to give a majority stake to Riau or to allow the province to act as the operator of the oil field. But the President asked the delegation in the meeting to discuss the CPP with the Minister. (*)