Riau upset over delay in transfer of CPP oil field management

The provincial administration of Riau has expressed disappointment over the central government's plan to delay the transfer of the operation and management of the Coastal Plain Pekanbaru (CPP) oil field into its hands, Riau Pos reported on Monday.

Deputy Governor RA Aziz said in Pekanbaru last week that Governor Saleh Djasit was now in Jakarta to clarify director general of oil and gas Rahmat Sudibyo's statement that the transfer of the oil field to the province could not be carried out in August as initially scheduled.

At a recent hearing with the Commission VII of the House of Representatives, Rahmat said that it was not certain yet whether the province could receive the final approval to manage the CPP oil bock in August this year, because the proposal submitted by the province had yet to cover technical details that were needed to support the transfer of the management and operation of the oil block.

According to Rahmat, the ministry of mines and energy should first know details of the future operation of the oil block before issuing a final green light to the provincial administration.

The government approved the provincial administration's demand to take over the operation of the CPP oil block early this year after the current contract, which is now held by oil giant Caltex Petroleum Indonesia, expires in August next year.

The House of Representatives has demanded the provincial administration to be only in charge in controlling the oil field while the daily-to-daily management and operational activities should be given to an experienced oil company. The Riau government has several times ensured that it would operate the oil filed in cooperation with an experienced oil company. But the province has yet to come with a concrete action on how to appoint the company and how much it would inject investment to maintain the current level of the oil field production.

Aziz said that the demand made by the ministry of mines and energy was often too unrealistic especially related to the requirement that Riau should inject fresh investment into the oil field. "We don't need new investment to run the oil block because the existing oil production facilities are still sufficient enough to maintain the current production level. (*)