Riau councilors form team to take over CPP oil block

The Legislative Council in Riau province has formed a special team to study the establishment of a company which will take over the management and operation of the Coastal Plain Pekanbaru (CPP) oil block from the current operator PT Caltex Pacific Indonesia (CPI).

Lukman Edy, the secretary of the so called Team for CPP Block, would recommend which companies which are eligible enough to take over the operation and management of the oil block.

He said that the companies, which should be owned by the local administration, should be able to work with international-class oil companies to manage and operate the oil block, one of five oil fields now being operated by Caltex.

Lukman said that the team had proposed PT Riau Makmur Petroleum and PT Riau Oil Konsorsium to operate the oil block.

The Ministry of Energy and Mineral Resources has decided to form a joint venture between Pertamina and locally-owned company to take over the operation of the CPP oil block from Caltex after the contract 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, however, 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. (*)