Caltex, authorities still at sea over security problems

Caltex, authorities still at sea over security problems

By Mochammad N. Kurniawan

DURI, Riau (JP): Although security problems have been plaguing
oil firm PT Caltex Pacific Indonesia (CPI)'s operations in Riau
province for several years now, the company and the local
authorities are still in the dark as to how to resolve them.

Both parties seem to prefer pinning the blame on each other as
regards the responsibility for coping with increasing theft from
CPI's oil fields, and in dealing with the various compensation
claims made by local people.

Vice President for CPI's Bekasap Sub Business Unit (SBU)
Suwito Anggoro said on Tuesday that CPI was not satisfied with
the law enforcement measures taken by the local authorities.

"The local police should be more active in finding the
masterminds and bringing them to court for punishment," he told
reporters during a visit to the oil fields.

He said that incidents of theft in the 4,000-square-kilometer
Bekasap SBU had increased threefold to 1,800 cases between
January and mid-August compared to the same period last year.

The equipment which had been stolen included cables, pipes,
measuring devices and insulating materials, he said.

The compensation demanded by local people in relation to
various land disputes and alleged pollution had also reached
billions of rupiah, he added.

The incidence of theft and land disputes had been on the rise
over the past several years following the downfall of the
country's former authoritarian president Soeharto in mid-1998.

According to Suwito, the company had increased the number of
its security personnel to about 1,600 by contracting the private
security firm 911 to help protect its oil fields. The results,
however, had not been optimum so far due to the vast area
involved and the limited powers of the security guards.

"It's still difficult to cope with the problem. Our area is
just too large," Suwito said.

However, he admitted that CPI had not allocated a specific
budget for combating the theft problem and other disturbances.

CPI has four operating sites in Riau province covering an area
of about 30,000 square kilometers, namely the Rokan, Coastal
Plain Pekanbaru (CPP), Mountain Front Kuantan (MFK), and Siak
blocks.

CPI established SBUs in 1995 with each one being responsible
for the management and security of one oil block or a part of a
block.

The SBUs include Bekasap, Duri, Minas, which operates the
Rokan block, and Rumbai, which operates the Siak block.

The Duri SBU produces about 235,000 barrels of oil per day
(bopd), Bekasap about 210,000 bopd and Minas 130,000 bopd.

In July this year, the Bekasap SBU suffered potential losses
of about US$70 million due to a drop in oil production of between
10,000 and 15,000 barrels per day (bpd) due to security problems,
Suwito said.

The company also suffered realized losses of $1 million due to
damage to equipment, he added.

Suwito warned that if the local authorities failed to take
serious action regarding the security problems, not only the
local government would suffer but also the whole country as
would-be foreign investors would be reluctant to put their money
into Indonesia.

Meanwhile, Bachtiar A. Fatah, head of operations for the Duri
SBU, said that his SBU was facing similar problems.

"We have done our best to safeguard our fields but the
incidence of theft continues to rise," he said.

He said that about 611 theft cases had occurred between
January and mid-August in the area, causing a loss in production
of about 25,000 bopd.

He added that the Duri SBU had spent $15 million on repair
work and another $1.4 million on the replacement of lost
materials.

Separately, Iptu H. Azrin Pangkat, the chief of Tanah Putih
district police in Rokan Hilir regency, admitted that security in
the area was his responsibility, but warned Caltex not to solely
rely on the police due to personnel shortages affecting the
force.

"We must be realistic here. With only 18 officers, how can we
cover all 19 large villages in the area and the CPI oil fields,"
he said.

Azrin said that the police would adopt a persuasive approach
in dealing with the local people and the seemingly unrealistic
claims they were laying at Caltex's door.

"If we make a mistake, we're afraid that the local people will
burn down our station," he said.

Meanwhile, Abdul Wahab, secretary of Tanah Kote district in
Rokan Hilir regency, said that many of the claims against CPI
were being made by unemployed local people.

Therefore, he urged the company to provide more jobs for local
people and establish a training center to increase the level of
skills in the area.