Riau is seeking President's approval to get larger stake in CPP oil block

Riau province is seeking the approval from President Abdurrahman Wahid to get a larger stake in a joint venture that will take over the management and operation of the Coastal Plains Pekanbaru (CPP) oil block after the current contract, now held by PT Caltex Pasific Indonesia, ended in October, next year, Riau Pos reported on Friday..

Riau province's governor Saleh Djasit said that he would personally meet President Abdurrahman Wahid to ask his approval to the province's demand to get a higher stake in the planned joint venture as negotiations with both the Ministry of Energy and Mineral Resources and Pertamina had showed no good results.

"We are still finding the right time to meet the President," he told the daily on Thursday.

The government has agreed to meet the Riau administration's demand to take over the operation of the oil block after the current contract ended on October next year. However, the ministry of energy and mineral resources will not issue its final approval until the provincial administration finds its partners in managing the oil block.

The province has agreed to follow the government's advice to involve Pertamina and Caltex as its partners in operating the CPP oil block but negotiations on the establishment of a joint venture which will operate the oil block deadlocked as all parties involved demanded a larger stake.

The Riau province insists to get a 70 percent stake and gives the other 30 percent to Pertamina and Caltex.

According the existing oil and gas law, the joint venture as the operator of the oil block will receive 15 percent of the oil production while the government as the owner of the oil block will get the other 85 percent. (*)