Riau seeks Vice President's support in operating CPP oil block

Senior members of the legislative council of Riau province will meet Vice President Megawati Sukarnoputri next week to seek her support for the province's demand to gain a majority stake in a joint venture that will take over the management and operation of the Coastal Plain Pekanbaru (CPP) oil block in the province, the Riau Pos reported on Saturday.

The chief of the council, Chaidir, said in Pekanbaru on Friday that the province's legislators would explain the Vice President the reasons why they demanded to have at least 70 percent stake in the joint venture which would take over the oil block when the current contract expired in September next year.

"We will meet the Vice President to bring the people's aspiration in dealing with the CPP oil block," he was quoted by the daily as saying.

The government has agreed to meet the Riau administration's demand to take over the operation of the oil block, which is currently operated by PT Caltex Pasific Indonesia. However, the ministry of energy and mineral resources will not issue its final approval until the provincial administration finds its partners in managing the oil block.

The province has agreed to follow the government's advice to involve Pertamina and Caltex as its partners in operating the CPP oil block but negotiations on the establishment of a joint venture which will operate the oil block deadlocked as all parties involved demanded a larger stake.

The Riau province insists to get a 70 percent stake and gives the other 30 percent to Pertamina and Caltex.

According the existing oil and gas law, the joint venture as the operator of the oil block will receive 15 percent of the oil production while the government as the owner of the oil block will get the other 85 percent. (*)