CPI may close troubled oil field

The Jakarta Post, Jakarta

American oil company PT Caltex Pacific Indonesia (CPI) was considering closing its troubled oil field in Jorang, Rokan Hulu Regency, Riau if local residents continued to block the main access road to the field, according to a senior CPI executive.

"We will first calculate the benefit and losses, before deciding to discontinue the field's operation," CPI spokeswoman Jeni Simandjuntak told the Jakarta Post by phone from Riau.

She added that the blockage had forced the company to stop operating two rigs there.

Jeni noted however, that the company was still trying to negotiate with the villagers to end the road block.

CPI produces about 3,000 barrels of oil per day from the field out of the company's total oil production of about 600,000 bpd.

The villagers blocked the road to pressure Caltex into meeting their demands for the company to pave the village's roads, which are used by the company on a daily basis. The locals also wrested control of 20 pieces of heavy equipment belonging to the company.

The villagers, upset with the dust pollution caused by the traffic on the unpaved road, argued that the company should be responsible for improving the road.

Caltex was previously reluctant to pave the road, claiming that the road is used mostly by illegal loggers. However, the company later reached an agreement with the villagers to asphalt some sections of the road.

Some villagers were, however, unsatisfied with the agreement and decided to block the access road as a means of protest.

Caltex has seen its fields blocked by the local people many times over the past several years amid the breakdown of law and order following the resignation of president Soeharto in mid- 1998.