Caltex blockade ends in Riau

Caltex blockade ends in Riau

Tom Wright
Dow Jones
Jakarta

PT Caltex Pacific Indonesia, the country's largest crude oil
producer, said on Friday that operations had returned to normal
at its facilities in Riau province after a three-day blockade by
local villagers.

Caltex, which is a unit of U.S.-based Chevron Texaco Corp.
(CVX), said the villagers began blocking the roads around one
small crude oil field Monday, demanding Caltex improve the roads
in the area. The protesters dispersed on Thursday after police
intervention, Caltex said.

The company said in a statement that it lost only 5,400
barrels in crude production due to the blockade, a small amount
compared with its daily average output in Riau of 630,000 barrels
a day.

Caltex has faced numerous disruptions to production in Riau
from locals that have complained for years that they see little
of the benefits from the extraction of natural resources in the
area.

Decentralization laws two years ago - an attempt by the
central government to buy off the country's most restive
provinces and keep the country in one piece - have stoked
discontent among villagers.

Part of the problem is that decentralization laws have given
huge new powers to the provincial government in Riau, by handing
it greater control over revenues from natural resources.

Critics of the decentralization law say much of this money is
spent on prestige products, or is corrupted, leaving little to
improve the life of villagers.

In its defense, Caltex says it has improved the infrastructure
in Riau province, including building roads, schools, and a sports
stadium.