Riau waits for President's decision on CPP oil block

The provincial administration of Riau is waiting for President Abdurrahman Wahid's decision over the fate of the Coastal Plain Pekanbaru (CPP) oil block, Riau Pos daily reported on Tuesday.

Uray Nazirin, the head of the provincial administration's team on CPP oil block, said in Pekanbaru on Monday that he hoped the President would accommodate the Riau people's aspiration to have a larger stake in a joint venture that will run the oil block.

"Four ministers handling the case have recently met to discuss the future of CPP and have also recommended some solution to the President to end the deadlock," he was quoted as saying by the daily.

The ministerial team consisting of Minister of Energy and Natural Resources Purnomo Yusgiantoro, Minister of Home Affairs Surjadi Sudirja, Coordinating Minister for Political, Social and Security Affairs Susilo Bambang Yudhoyono and Coordinating Minister for the Economy Rizal Ramli took over last week talks to determine CPP's future ownership after long negotiations between Pertamina, and Riau failed.

The government agreed early this year to allow the Riau province to take over the operation of the CPP oil block after the existing contract, which is held by PT Caltex Pacific Indonesia, ends in August next year. But the ministry of energy and mineral resource will not issue its final approval until the province finds its partners in managing the oil block.

The province then 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 to operate the oil block failed as all parties demanded larger stakes.

The Riau province insists to get a 70 percent stake in the joint venture and gives the other 30 percent to Pertamina and Caltex. Pertamina refuses the offer and demands to have at least 49 percent stake in the joint venture. (*)