Riau leaders oppose CPP block agreement

Community leaders in Riau province have opposed an agreement on the establishment of a joint venture to manage and operate Coastal Plains Pekanbaru (CPP) oil block between state owned company Pertamina and a company owned by the Siak regency administration.

Although the Siak regency, which represents Riau, has the rights to have a 50 percent in the joint venture, the deal is not valid because the negotiations did not involve leaders from other regencies, according to Edyanuis Herman Halim, a lecturer staff at the Riau University.

He acknowledged that larger part of the CPP oil field is located in the Siak regency. But the negotiations should not be handled alone by Siak because some of the oil field is also located in other regencies such as Kampar, Pelalawan and Bengkalis.

Separately, informal leader Al Azhar who was some time ago elected as the president of independence Riau, said that the deal in which the joint venture would only receive 15 percent of the total oil production was not fair.

?Riau should have a share of at least 70 percent from the total oil production. This is our long-time commitment,? he said.

Under the existing production-sharing contract, the central government, through Pertamina, receives 85 percent of the oil production, and the contractor the other 15 percent.

Al Azhar warned that community leaders across Riau province would soon hold a meeting to discuss the unfair agreement. Other community leaders from other regencies such as from Kampar also rejected the deal.

The joint venture will take over the CPP oil field operation after Caltex?s contract ends this year.(*)