Tanbrani doubts Riau's ability to operate CPP oil block

Tabrani Rab, one of the most prominent figures in Riau province, has doubted the ability of the local companies to operate the Coastal Plains Pekanbaru (CPP) oil block, Riau Pos reported on Monday.

Tabrani, who declared himself as the president of the independent Riau, said that operating the oil field was not easy because it would involve not only high technology but also high capital. "Pertamina alone is not capable, how could local companies such as BUMDs dream to take over the job," he added.

The provincial administration of Riau has been given a green light to take over the operation of CPP when the contract, now held by PT Caltex Pacific Indonesia, expired in August next year. Riau governor Saleh Djasit said last early week that the province would select its own partners, rather than Pertamina or Caltex to carry out the job. Involving companies owned the provincial administration (BUM Ds) is a high priority, he added.

Tabrani said that it would be better for Riau to subcontract the oil field to experienced oil company, rather than the local ones to ensure that the change in the management of the CPP oil block to the provincial government would truly benefit the local people.

Noted economists at the University of Riau also called on the provincial government to more realistic in managing the CPP oil block, which produces about 7,000 barrel of crude oil per day.

Edyanus Herman, a senior economist at the university, said that the provincial government should have a reliable concept in managing the oil field. "We has so far heard nothing from the provincial government about their business vision in taking over the oil block. We need a clear concept so that taking over the management of the oil block would really help the local economy," he said. (*)