Jakarta insists to give Riau province 10% stake in CPP oil field
Thursday, February 1 2001 - 04:30 AM WIB
The Ministry of Energy and Mineral Resources has again rejected the demand of the provincial administration of Riau to have a majority interest in the Coastal Plain Pekanbaru (CPP) oil block, DetikCom reported on Thursday.
In a meeting with a delegation from the Riau province on Wednesday, Minister of Energy and Mineral Resources Purnomo Yusgiantoro insisted on the ministry's early recommendation to give the provincial authority not more than 10 percent in the oil field.
The minister asked the delegation which comprised Governor Saleh Djasit, the chairman of the province's legislative council Chaidir, the chairman of the Riau-Indonesia Unification Forum, Rusli Ahmad, to further discuss their proposal to the Minister of Home Affairs, Coordinating Minister for Economy, Minister of Trade and Industry and Finance Minister.
"I am really disappointed with the result of the meeting," Chaidir told DetikCom in a telephone interview.
A special delegation led by Riau governor province Saleh Djasit and the chairman of the local council Chaidir had earlier 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 after the current contract, which is now held by Caltex Pacific Indonesia, expires in August. But the President asked the delegation in the meeting to discuss the CPP with the Minister.
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.
The intergovernmental financial balance law issued last year as part of giving more authority to local governments to manage their own social natural resources also allocates as many as 15 percent of the government's share from the oil production to the provincial administration and the other 85 percent to the central government's coffer. (*)