Riau forms negotiation team to take over CPP oil block
Saturday, July 28 2001 - 02:42 AM WIB
The negotiation team would form an oil company which would later represent the local administration in future negotiations with the central government over the take over of the oil block.
?The team is needed to prepare the establishment of an oil company which would represent Riau in future negotiation,? Muchtar Achmad, an advisor of the team, said in Pekanbaru on Friday.
According to him the team members will be appointed as the management team of the oil company which would be named PT Riau Petroleum.
According to Riau Post daily, the management team will include former cabinet minister Syarwan Hamid as chief commissioner, rector of Riau University Muchtar Ahmad and secretary of the local administration as members of the commissioner board.
The executive board will be led by T Amir Sulaiman as the president director, Amir Hasan as finance director, Tang Anthony as technical director and Azlaini as director for general affairs and human resource.
He said that the main agenda of the team would be to pressure the central government to meet the province?s demand for a larger stake in a joint venture which would handle the future operation of the oil block.
?The 10 percent stake allocated for Riau in the joint venture is certainly too small. The team will demand for higher share because the current offer is not realistic,? he added.
The Ministry of Energy and Mineral Resources has decided to transfer the management and the operation of the CPP oil block to a joint venture between Pertamina and locally-owned company after the current contract currently held by Caltex 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 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. (*)