House member urges Riau to stay away from CPP oil field

Members of the House of Representatives (DPR) have urged the Riau provincial administration to end its plan to participate in the operation of the Coastal Plain Pekanbaru (CPP) oil block when the current contract ends in August, this year, Bisnis Indonesia reported.

If the province is allowed to operate in the oil block, it would result a bad precedent in the country's oil industry, Ramson Siagian, a member of the PDI-P faction said, adding that if the province is given the chance, other oil-rich province will also demand the same thing from the central government.

In addition, allowing a province to directly operate a natural resource-based project will cause jealousy among provinces, which lack in natural resources, he said.

Riau has demanded the government to appoint it as the operator of the Coastal Plain Pekanbaru (CPP) oil block if the province is only given a 20 percent interest in the disputed oil field.

The province has demanded a majority stake in a joint venture that will take over the operation of the CPP field from the current contractor PT Caltex Pasific Indonesia when the existing contract expires in August.

But the government turned down the demand and instead only allows the province to have only 20 percent. This has angered the local students, who said that the oil field should be better closed if the province is not allowed to become a majority shareholder.(*)