House insists involvement of Riau in CPP oil block

Commission VIII of the House of Representatives (DPR) has again insisted on the need of involving the Riau province administration in managing and operating the Coastal Plain Pekanbaru (CPP) oil block, Riau Pos reported on Wednesday.

Priyo Budi Santoso, one of the Commission member, said that maintaining the central government's policy to give state owned oil and gas company Pertamina a full control of the country's oil and gas resources was no longer relevant to the current situation.

"It is against the reform spirit of the new government," he said, adding that the government's decision to introduce an autonomy law next year should be followed by all state institutions.

The government will implement beginning next year an autonomy law and inter-governmental financial balance law to give more power and authority to the provincial administrations to manage their regions financially and politically. But the law on oil and gas, which grants Pertamina the authority, to manage and operate the country's oil and gas resources is still maintained.

The law has become a major barrier for the Riau province to take over the management and operation of the CPP oil block when the existing contract, which is now given to Caltex Pacific Indonesia (CPI) ends in August next year.

The ministry, instead, has asked Pertamina and Caltex form a joint venture to manage the oil bock after the existing contract ended.

Gatot Kariyoso Wiroyudo, the state oil and gas company's director for exploration and production, said in Jakarta on Monday that Pertamina, which previously demanded for at least 60 percent, was ready to have only 55 percent in the planned joint venture. (*)