Riau governor protests Siak regency?s control over CPP oil block

Riau province governor Saleh Djasit has reminded Siak regency administration about the province?s entitlement to a portion of oil revenues from Coastal Plains Pekanbaru (CPP) oil block which is jointly operated by PT Bumi Siak Pusako and state oil and gas firm Pertamina, Kompas daily reported Saturday.

The paper quoted Saleh as saying that Bumi Siak Pusako had acted as if it represented Siak regency, while in fact it must look after the interests of Riau province as a whole and four regencies where CPP block is located. The regencies are Bengkalis, Kampar, Pelalawan and Siak. CPP block is 95 percent located in Siak.

Saleh said the provincial administration had given Bumi Siak Pusako a mandate to join Pertamina in operating and managing CPP block although by rights, the company is owned by Siak regency administration.

He said thorough discussions have to be held concerning the rights of Riau provincial administration and the four regencies to receive a portion of oil revenues from CPP block.

?Siak?s monopoly of managing CPP block should be changed soon. Therefore, I urge the Siak regency to soon discuss this matter with other regencies,? Saleh said.

Last August, U.S oil giant ChevronTexaco handed over CPP block to the Indonesian government following its contractual obligations. The government then asked Pertamina and Riau provincial administration to jointly operate and manage the block.

Meanwhile, Pertamina president director Baihaki Hakim said Saturday that CPP block?s production could be disrupted if the dispute between Riau provincial administration and Siak regency was not resolved soon.

?Pertamina is deeply concerned about the dispute,? Baihaki told Petromindo.Com.

CPP block produced an average of 36,100 barrels (bpd) of oil when it was handed over to Riau. The output however dropped to 32,800 bpd in January 2002. (*)