Riau calls for common strategy to take over CPP oil block

Riau governor Saleh Djasit has called on the locals to have a common strategy in efforts to take over the operation and management of the Coastal Plain Pekanbaru (CPP) oil block, Riau Post reported on Friday.

The governor said that all the society components should be united so that the provincial administration would be able to focus its attention on gaining the control over the oil block.

?Talking about the location of the company which will handle the CPP operation is not yet relevant. This issue should not cause a friction among the Riau people,? he said in response to a demand from the Siak people to establish the future headquarter of the CPP in their land.

Siak regency, where the CPP oil field is located, has demanded the provincial administration to host the office of the company which will take over the oil field?s operation. The regency also demands a share in the oil field.

Riau recently said it would soon form an oil company as a preparation to take over the management and operation of the CPP oil block. The new company, which will be renamed Riau Petroleum, will be jointly owned by the provincial administration, and the Siak regency, where the oil block is located.

The Ministry of Energy and Mineral Resources has decided to transfer the management and the operation of the CPP oil block to a joint venture between Pertamina and locally-owned company after the current contract currently held by Caltex ends in August this year.

Pertamina will be given 90 percent stake in the planned joint venture, while the local company the other 10 percent.

The Riau administration rejects the offer arguing that the 10 percent ownership for the local firm will be too small.

The ministry has offered a number of incentives as the compensation of the Riau minority status in the joint venture. But the provincial administration is still unsatisfied with the offer. (*)