Riau finally approves extension of CPP contract
Wednesday, August 8 2001 - 03:00 AM WIB
The agreement was reached during a meeting in Jakarta on Tuesday between the government?s senior officials including Minister of Mines and Energy Purnomo Yusgiantoro and the province?s leaders such as the head of the local?s Legislative Council Chaidir and informal leader Tabrani Raib.
Secretary General of the Ministry of Energy and Mineral Resources Djoko Purnomo said that both parties agreed during the meeting to extend the contract over the operation of the CPP oil block for another one year.
In return, Caltex agreed to provide compensation in the form of community development and transfer of technology to the local people as the preparation to take over the future operation of the oil block.
Chaidir said that the meeting also approved Riau?s demand to separate the management of the CPP oil block from Caltex?s four other oil blocks.
Three positions in the new management such as vice chairman heads of general manager affairs and human resource development should be allocated for the locals, he added.
President Megawati Sukarnoputri formally issued a decree early this month on the extension of the CPP contract, which ends in August, this month. But the decision was opposed by the local people.
Last year, the government agreed to transfer the management of the CPP oil block to a joint venture between state owned oil and gas company Pertamina and the local administration. But the decision could not be implemented as the province insisted to becoming a majority shareholder in the joint venture.
In its decision, the government allocates 90 percent of the joint venture?s ownership to Pertamina and the other 10 percent to Riau. The share composition was rejected by Riau, which instead demands 70 percent in the company. (Godang/alex)