Riau people should be entrusted to operate CPP oil field

The legislative council of Riau province has formally requested President Abdurrahman Wahid to entrust the local companies to act as the operator of the Coastal Plain Pekanbaru (CPP) oil block, Media Indonesia reported on Friday.

The council's chairman Chaidir said on Wednesday that a letter containing the request was sent to the President on January 8 but no answer had been received.

According to Chaidir, the request was similar to what the province repeatedly demanded some time ago. "It is only different in style. In the past, we insisted to have a majority stake in the oil field. Now, we want to be entrusted as the operator because Jakarta seemed allergic about giving us a majority stake," he was quoted as saying.

The Riau administration and state owned oil company Pertamina, on the behalf of the government, had been involved in months of negotiations last year to discuss the future of the oil block, which is now operated by PT Caltex Pacific Indonesia.

But the negotiations failed to produce proceeds as both parties insisted to have a majority stake in a joint venture that will run the oil field once the current contract ends in August.

The government later stepped in and determined that the 80 percent of the interest should be controlled by Pertamina to prevent other oil rich provinces from making a similar request.

"We want the government to allow us to replace the position of Caltex," he said, admitting that not like in past, the provincial administration had no longer demanded for a majority stake," Chaidir said. (*)