Riau has yet to decide govt offer to have 20% stake in CPP oil block

The chairman of the legislative council of Riau province said that the council had yet to decide whether to accept or reject the government's offer to have a 20 percent stake in a joint venture that will run the future operation of the Coastal Plans Pekanbaru (CPP) oil block, Riau Pos reported on Thursday.

The offer will be further debated by the council's special committee which will soon meet to recommend which position that must be taken by the Riau administration, he said when he was asked to comment on the central government's latest offer on the CPP oil block.

He said that the provincial administration, which previously demanded 70 percent stake in the joint venture, would need to carefully study the 20 percent offer.

"We need to study whether having 70 percent stake is much more profitable than getting only 20 percent," he said adding that having 70 percent stake in the joint venture would also mean that the province should bear the majority of the financial requirement for the oil block.

Other members of the council, however, said the CPP oil block should be better closed if the province is given only 20 percent interest.

The government has taken over the talks related to the transfer of the operation of the CPP oil block after negotiations between the provincial administration of Riau failed to settle their difference over the ownership of the oil block.

The negotiations failed as both Pertamina and the local administration demanded majority stake in the joint venture that will takeover the operation of the CPP from Caltex when the current contract ends in August next year. (*)