CPI plant blockade causes huge financial losses

The Jakarta Post, Jakarta

Villagers of Rokan Hilir regency in Riau province has blocked a gas plant belonging to PT Caltex Pacific Indonesia (CPI) since February this year, causing massive losses to both the American oil and gas company and the government.

CPI spokesman Hanafi Kadir was quoted by Antara as saying on Friday that the crowds had damaged a compressor machine at the plant, which also produces oil, thus halting production.

"To this day (Friday), the gas plant is unable to resume operations," said Hanafi.

Hanafi said that the month-long blockade had prevented the company from producing some 7 million cubic feet of gas, equivalent to 1,150 barrels of oil per day.

Estimated losses from the interrupted production was about US$920,000, he said.

"Combined with the oil production failure, total production losses are estimated at $1.15 million," he said.

After deducting expenses, the government would receive 85 percent of the oil and gas revenue, while the remainder would go to CPI.

The local villagers began blockading the gas plant on Feb. 17, demanding that CPI repair local roads damaged by trucks carrying heavy equipment.

CPI was seeking contractors to repair the roads in a bid to end the blockade, Hanafi said.

Foreign companies operating in remote areas in the country have often faced local resistance in the past couple of years for various reasons, which is one of the factors discouraging new investment in the country.