Riau demands 60 percent stake in CPP

Riau province will continue to fight for a majority ownership in the Coastal in Pekanbaru (CPP) oil block although Caltex Pacific Indonesia (CPI) claimed that it suffered a financial loss of about US$30 million per month from its operation, Bisnis Indonesia reported on Friday.

Riau governor Saleh Jasit said in Batam on Thursday that the loss reported by Caltex would not affect the province?s effort to control at least 60 percent in the CPP oil block.

He stressed that the loss reported by Caltex had nothing to do with the provincial administration?s plan to take over the operation and management of CPP, one of five oil blocks currently operated by Caltex in the province.

According to the governor, the preparation of the local administration to resume the operation and management of the CPP oil field has been 75 percent completed. ?We are still waiting for an agreement with Pertamina about the share ownership,? he added.

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 with Pertamina 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, however, sparked protests in the province, with the local non-governmental organization threatening to take over the oil block if the province?s demand for 70 percent stake is not fulfilled. (*)