Riau?s special team on CPP meet Pertamina?s officials

A special team established by Riau?s Legislative Council as part of the province?s plan to take over the operation and management of the Coastal Plain Pekanbaru (CPP) oil block from the current operator PT Caltex Pacific Indonesia has recently met Pertamina?s officials to ensure that the province is able to handle the future operation of the oil block.

J. Nadeak, the secretary of the team, told Bisnis Indonesia on Monday that the team met Pertamina?s officials to ensure that the local government had the capability to take over the operation and management of the CPP fields.

?There was no negotiation in the meeting. The team only brought up some inputs for the future operation of the oil block,? he was quoted as saying by Bisnis Indonesia on Tuesday

Riau recently said it would soon form an oil company as a preparation to take over the management and operation of the CPP oil block. The new company, which will be renamed Riau Petroleum, will be jointly owned by the provincial administration, and the Siak regency, where the oil block is located.

The Ministry of Energy and Mineral Resources has decided to transfer the management and the operation of the CPP oil block to a joint venture between Pertamina and locally-owned company after the current contract currently held by Caltex ends in August this year.

Pertamina will be given 90 percent stake in the planned joint venture, while the local company the other 10 percent.

The Riau administration rejects the offer arguing that the 10 percent ownership for the local firm will be too small.

The ministry has offered a number of incentives as the compensation of the Riau minority status in the joint venture. But the provincial administration is still unsatisfied with the offer. (*)