Riau councilor hails govt decision to extend CPP contract
Wednesday, May 9 2001 - 04:30 AM WIB
The government's recent decision to extend the contract of PT Caltex Pacific Indonesia to operate the Coastal Plain Pekanbaru (CPP) oil block for another one year has received a positive response from the local legislators.
Djuharman Arifin, the vice chairman of the province's legislative council, said in Pekanbaru on Tuesday that the extension of the contract would give the local administration much more time to lobby the central government to have significant stake in the oil block.
According to him, the local administration has so far failed to convince the central government that the Riau province is deserved to get a majority interest in the oil block.
"With the extension of the contract, the provincial administration will have much more time to lobby the House of Representatives on the need to give local administrations a larger interest in oil concessions located in their territories," he told Riau Pos on Tuesday.
He said that Riau should make an intensive lobbying so that the new oil and gas law which is now being debated by the House members will empower provincial administrations to manage and operate their own oil and gas resources.
Caltex's contract to operate the oil block, which produces between 50,000 and 60,000 barrels per day, would expire in August 21 this year. But the government has not decided the new operator which will resume the management and operation of the oil block. Two years ago, the government decided to transfer the operation of the oil block to a joint venture between Pertamina and Caltex. But the plan was cancelled after President Abdurrahman Wahid agreed to involve the Riau administration in the joint venture.
Caltex later withdrew from the planned joint venture. The Riau administration insisted to have 70 percent stake in the joint venture but the demand was turned down.
The government finally decided to allocate 10 percent stake to the provincial administration and the other 90 percent to Pertamina. The decision has sparked protests in the province, with the local non-governmental organization threatening to take over the oil block if the province's demand to have 70 percent stake is not fulfilled. (*)