Riau demands 70 percent stake in CPP block

Top councilor of Riau insisted on Saturday that the Riau provincial administration should have a 70 percent stake in the Coastal Plains Pekanbaru (CPP) block after the contract of PT Caltex Pacific Indonesia on the block expire next year.

Speaker of the Riau provincial council Chaidir told reporters on the sidelines of a discussion that Riau wanted to develop the block in a joint venture with state oil and gas company Pertamina, which would have 30 percent of the shares.

Caltex was still likely to "participate" in the joint venture in the future provided that the American oil company did not cause "difficulties", Chaidir said, without specifying what he meant by "participation" and "difficulties".

Chaidir also blasted Caltex's president Humayunbosha for his proposal to give a 10 percent stake in the joint venture to be formed by Pertamina and Caltex for the development of the block. Humayunbosha voiced the proposal during a recent meeting between Caltex and the House of Representatives' Commission VIII for mines and energy, science and technology and environment.

"The Riau council and people were angered by the proposal," Chaidir said on the sidelines of the discussion on the future of the block, organized by the Riau students association.

Also present at the discussion were director of exploration at the ministry of energy and mineral resources Kardaya, staff expert of Pertamina's president Zuhdi Pane, Caltex's vice president Wahyudin Yudiana and head of the House's Commission VIII Irwan Prayitno.

Caltex, which is a joint venture of American energy companies Chevron and Texaco, account for more than a half of the country's oil output of around 1.3 million barrels per day (bpd). The CPP block produced around 70,000 bpd of oil last year but its output had dropped to less than 60,000 bpd today as Caltex has cut long-term investment in the block amid uncertainties over its future ownership of the block.

Chaidir said Riau was ready to operate the block, noting that a lot of investors, foreign and local, had voiced readiness to assist the province financially.

"Money is no problem. Many investors have offered assistance to us," Chaidir said, refusing however to name the investors.

Chaidir also said he had been informed by sources that the ministry of energy and mineral resources had sent a letter to President Abdurrhaman Wahid, recommending the joint venture of Riau and Pertamina develop the block.

Legislator Irwan called during the discussion on Riau, Pertamina and Caltex to continue dialog for a win-win solution. (Godang)