Riau needs no money to take over CPP

The governor of Riau province Saleh Djasit said in Pekanbaru on Wednesday that the province of Riau needed no money to take over the management of the Coastal Plains Pekanbaru (CPP) oil block from PT Caltex Pacific Indonesia (CPI) when its contract ended in August, next year.

"When the contract is ended all the assets including exploration and production facilities should be given to the state. Riau could use the assets as its equity participation in a joint venture which will re-operate the oil block," he said.

According to the existing regulation, the full authority to manage the country's oil and gas resources are held by Pertamina as the sole representative of the government, not the provincial administration.

Saleh said that he was optimistic that the central government would agree to give the authority to manage the province's oil and gas resources to the local government in line with its commitment to give a wider autonomy to provinces.

The contract of the CPP oil block, which is currently held by PT Caltex, will expire in August next year.

The government has asked Pertamina and Caltex to form a joint venture to jointly operate the oil block but negotiations over the ownership of the oil block have been stalled, as both parties demand a majority stake.

The House has asked the government to involve Riau province in the joint venture in a bid to accommodate the local people's demand for more control in the province's wealth. (*)