Riau demands control of CPP oil block

Riau province is determined to gain a full ownership in the Coastal Plains Pekanbaru (CPP) oil block in the province despite the central government's plan to shift the control over the oil block to state oil and gas company Pertamina and PT Caltex Pacific Indonesia (CPI).

Riau Vice Governor Rustam S. Abbrus said over the weekend that the province was deserved to take over the oil block and urged the central government to heed the local people's demand.

"Why do the people think we are not capable," he said in a seminar held by the Indonesian Democratic Party for Struggle (PDI-P) over the weekend.

The contract of the CPP oil block, which is currently held by PT Caltex, will expire in August next year. The government has asked Pertamina and Caltex to form a joint venture to jointly operate the oil block but negotiations over the ownership of the oil block have been stalled, as both parties demand a majority stake. The House of Representatives (DPR) has asked the government to involve Riau province in the planned joint venture in a bid to accommodate the local people's demand for more control in the province's wealth.

Besides, the existing mining regulation gives all the authority over the country's assets to the central government, the provincial administration in Riau also lack financial capability to run the oil block.

But Rustam insisted that the provincial administration has both technology and financial capability to manage the oil block. "Riau is financially capable to run the oil block and is ready to face any risk," he added. (*)