President Megawati promises to consider Riau demand over CPP oil block

President Megawati Sukarnoputri has promised to consider Riau?s people demand to control the future operation and management of the Coastal Plain Pekanbaru (CPP) oil block, which is currently operated by PT Caltex Pacific Indonesia (CPI) under a production sharing contract with Pertamina.

?The President understands about the Riau demand and has promised to consider it seriously so that the Riau people will not be disappointed,? Riau Governor Saleh Djasit told Kompas last week after his meeting with the President.

Besides conveying his congratulation to the newly appointed President, the governor also briefed the President on the latest development in Riau province during the meeting. ?The President is really understood the Riau people?s aspiration over the CPP oil block,? the governor said.

Riau finally agreed recently with the central government?s decision to extend Caltex?s contract over the CPP oil block for another one year. In return the giant company agreed to provide some compensation to the local people.

The government had actually approved the establishment of a joint venture between Pertamina and the local administration to manage and operate the CPP oil block after the current contract ended in August.

In its decision, the government allocates 90 percent of the joint venture?s ownership to Pertamina and the other 10 percent to Riau. The share composition was rejected by Riau, which instead demands 70 percent in the company. The dispute over the ownership of the planned joint venture had, however, dragged down the negotiation process.

As both parties could not reach any agreement, the central government gave Caltex another one year to give more time for the transfer of the oil block. Caltex, in return, agreed to provide compensation in the form of community development. Caltex also agreed to spare some top positions in the CPP management to the locals, especially those related to public affairs. (*)