Riau to install online network to monitor oil production

The provincial administration of Riau will soon install a online computer network to monitor the production of oil from the province and the realization of their sales to ensure that the local authority will receive a fair distribution from the state revenue generated from the oil and gas production, Bisnis Indonesia reported on Tuesday.

Tabrani Rab, a member of the province?s autonomy council, said that the US$1 million computer network would be able to produce accurate data on the level of oil production in the province. "At present, the local authority relies on the data provided by the central government in calculating the amount of money that must go to the province," he added.

The country?s oil is produced under a production sharing contract with local and foreign companies. The contractor will receive about 15 percent of the net production, while the government receives the other 85 percent. 15 percent of the central government?s share should be given to the province where the oil is produced.

But many oil producing provinces including Riau have complained that their share from oil production was much smaller than the 15 percent portion as stated in the autonomy regulation. (*)