Riau demands royalty system in oil and gas activities

The provincial administration of Riau will ask the central government to change the production sharing system in the oil and gas production activities into a royalty mechanism to enable the province to get a batter gain from their oil and gas resources, Riau Pos reported on Saturday.

The province's deputy governor Raja Abdul Aziz said in Pekanbaru on Friday that Riau, East Kalimantan and Aceh would demand the government to amend the current oil and gas law and change the production split system into a royalty.

He did not elaborate the proposal. According to the existing regulation, the provincial administration will receive about 15 percent from oil production.

Many oil rich province consider the split as being too law because in other mining sectors, which are based in royalty system, the province receives up to 85 percent of the royalty. (*)