Riau has yet to decide Jakarta offer to jointly operate CPP oil block

Riau Governor Saleh Djasit said that the provincial administration has yet to decide whether to accept the offer from the central government regarding the ownership and operation of the Coastal Plain Pekanbaru (CPP) oil block, Riau Pos reported on Saturday.

The governor said Saturday that the offer was being studied by both the local administration and legislative council.

"We still study the offer and the possible inclusion of the people's aspiration as part of cooperation package in operating the CPP oil block," he told the daily in an interview.

He emphasized that both the local government and legislators had yet to decide whether or not to accept the offer announced by the Ministry of Energy and Mineral Resources recently.

In addition to the offer, the provincial administration would seek the central government's approval to have a 100 percent ownership in an old oil field in Lirik.

"We, for example, want a controlling stake in the field and are allowed to sell directly the oil production to buyers. We also ask the central government to be involved in the operation of other oil fields," he added.

Ministry of Energy and Mineral Resources Purnomo said recently that Jakarta would give Riau a 10 percent stake in a joint venture that will run and operate the CPP oil block after the current contract, now held by PT Caltex Pacific Indonesia, expires in August.

The Riau administration, which earlier demanded to have at least 70 percent ownership in the joint venture, will be also allowed to put local professionals in the board of executives in the planned joint venture.

In addition, the local government is also given the chance to involve in the management and operation of several old oil fields currently operated by Pertamina as their technical ground for their future role in the management of oil and gas industry in the province.

Although the offer is quite generous, most people in the province see it as being insufficient. Students and many members of the local legislative council have demanded the governor to reject it and asked the local authority to be consistent with its earlier demand to have at least 70 percent stake in the joint venture.

The local leaders and students also criticized the involvement of non-governmental organizations in dealing with the central government with regard to the CPP oil field.

The initiative of an NGO, the Foribet to negotiate the future of the CPP oil block with the central government could not be accepted.

"Any negotiations should be carried out by formal organization," one of the leaders said. (*)