Riau's regencies disallowed to own majority stake in CPP

Riau governor Saleh Djasit said on Thursday no regency in the province will be given a majority stake in the Coastal Plain Pekanbaru (CPP) oil block which Caltex Pacific Indonesia (CPI) will transfer in August to the Indonesian government.

The governor was referring to the Siak regency administration?s demand that it control 70 percent of the 50 percent-portion of CPP to be owned by the Riau provincial government.

CPP is located in Siak Regency, Riau.

State oil and gas company Pertamina and Riau Province in early January signed 50-50 percent share agreement on the CPP oil block. The accord will take effect in August when Caltex hands over the oil block to the Indonesian government.

Djasit said on Thursday the 50-percent share of CPP will be divided among the provincial administration and all four regencies in Riau.

? No party will control more than 50 percent of the share,? the governor told reporters.

Djasit went on to say that his administration would form a consortium around June to handle the 50-percent share of CPP.

CPI, a subsidiary of world energy giant Chevron Texaco, ended its contract for CPI in August 2001, but due to protracted dispute between the central government and Riau Province over who was to resume the operation of the CPP oil block , Pertamina and the central government decided to allow CPI to have a year extension. (Godang)