Riau still has the chance to have more than 10 percent in CPP

Riau province still has the chance to increase its stake in the CPP oil block although the central government has limited its equity participation to 10 percent, Riau Pos reported on Tuesday quoting a senior official at the state oil and gas company Pertamina.

Arifin Takhyan, Pertamina's director for production sharing management, said that the provincial administration could acquire some of the state oil and gas company's ownership in the oil block through "a business approach".

He stressed that all provincial administration will have the rights to own 10 percent in any oil production fields in their respective provinces. "But a local company such as a provincial administration-owned firm can also acquire the ownership from Pertamina through a business to business approach," he added.

The Ministry of Energy and Mineral Resources has decided to give Riau 10 percent stake in a joint venture which will operate the CPP oil block when the current contract now held by Caltex Pacific Indonesia (CPI) expires in August. The other 90 percent are allocated to Pertamina.

But the local legislators have rejected the offer although Riau governor Saleh Djasit hinted that he had no choices but to accept the offer. The legislators insist to have at least 70 percent in the CPP oil block.

According to Energy and Mineral Resources Purnomo Yusgiantoro it is up to Pertamina if it wants to involve Caltex in the future operation of the CPP oil block.

Sources said earlier that Pertamina will share its 90 percent ownership in the oil block with Caltex but the amount of the Caltex stake has not been decided. (*)