Indonesia warns Caltex strife could hit economy

Indonesia warned on Friday protests disrupting production by one of the country's largest oil producers could damage the budget and the economy.

Jobless locals demanding work have blocked the entrance PT Caltex Pacific Indonesia's Mutiara oil field in Riau province on Sumatra island, disrupting operations.

``Caltex oil production should be maintained,'' Mines and Energy Minister Purnomo Yusgiantoro told reporters in Jakarta.

``If the production is affected then it would affect the national budget and then affect our economy.''

Lawlessness is on the rise around Indonesia as it lurches through its transition to democracy. Foreign companies operating outside the main island of Java are a particular target because of their wealth.

Yusgiantoro said he had taken the security problem up with Vice-President Megawati Sukarnoputri and chief security minister Susilo Bambang Yudhoyono and security forces would be ordered to do more to protect businesses.

Caltex produces about half Indonesia's oil output, but unrest in Sumatra has hit its operations.

Caltex's output was 690,000 barrels per day (bpd) in September, compared with a target of 740,000 bpd.

Indonesia, the only Asian member of the Organisation of Petroleum Exporting Countries (OPEC), produces about 1.30 million bpd. Indonesia's OPEC quota is 1.36 million bpd.

``Our economy still relies on oil,'' Yusgiantoro said. ``Therefore, we have to keep our oil production working and even increase it to meet our OPEC quota.''

The latest trouble follows a series of incidents that have plagued the oil company, jointly controlled by Chevron Corp and Texaco Inc. (*)