Student leaders reject plan to extend CPP contract

The executive board of the students of the University of Riau has rejected the government?s plan to extend the contract of the Coastal Plain Pekanbaru (CPP) oil block which will expire in August 8.

The students issued the decision during their summit meeting in Pekanbaru on Tuesday, Riau Pos reported on Wednesday.

The students said that the closure of the oil block, which is now operated by PT Caltex Pacific Indonesia (CPI), would be much better for the Riau people, rather than being controlled by the central government.

?The central government has controlled the oil block for more than 50 years. And it is the time now for Riau to resume the control,? one of the students said.

The Ministry of Energy and Mineral Resources has decided to transfer the management and the operation of the CPP oil block to a joint venture between Pertamina and locally-owned company after the current contract currently held by Caltex ends in August this year.

Pertamina will be given 90 percent stake in the planned joint venture, while the local company the other 10 percent.

The Riau administration, however, rejected the offer arguing that the 10 percent ownership for the local firm will be too small.

The ministry has offered a number of incentives as the compensation of the Riau minority status in the joint venture. But the provincial administration is still unsatisfied with the offer. (*)