Riau only gets 10 percent stake in CPP

The central government has finally decided to only provide Riau Province with a 10 percent stake in the Coastal Plain Pekanbaru (CPP) oil block, Minister of Mineral Resources and Energy Purnomo Yusgiantoro said on Monday.

Speaking to reporters on the sidelines of a hearing session with the House of Representatives commission VI on mining and energy, Purnomo said that the remaining 90 percent would be held by the state-owned oil and gas company Pertamina, representing the central government.

He said that the decision was already final.

"I have already met with President (Abdurrahman Wahid) and he said that Riau will get 10 percent," he said, adding that a presidential decree was expected to be issued soon.

The CPP is currently managed by Caltex Pacific Indonesia. The company will end its contract in August this year. The Riau province has long demanded a 66 percent stake.

Purnomo said that although Riau only get a 10 percent stake, the province would obtain four additional compensations including appointing a Riau indigenous to sit in the board of directors of the newly set up company which would manage CPP; allowing Riau to directly sell its 10 percent oil so that the proceeds would not have to go to the central government coffer first; Pertamina would provide three of its oil fields near the CPP block as a training ground for developing Riau expertise in the oil and gas sector; and Pertamina would develop a community development program for the local people.(Godang S.)