Locals retract threat to blockade Riau oil block

Locals retract threat to blockade Riau oil block

PEKANBARU, Riau (JP): The people of Riau agreed on Wednesday
to back down on their threats to blockade the oil operation of PT
Caltex Pacific Indonesia (CPI), following a meeting among
community leaders.

Leaders at the meeting, which took place at the secretariat of
the Forum of Communication of Riau Community Leaders on Jl.
Kebangsari Komplek, agreed that the local people would not take
action against the firm's oil operations.

Al Azhar, the coordinator of the alliance of Riau people
(Simpul) which planned to take over the Coastal Plains Pekanbaru
(CPP) oil block, said that they wanted an agreement between the
government, state-owned oil and gas company Pertamina and the
Riau legislature to be signed in Jakarta on Tuesday and published
in an official gazette.

In Jakarta, top officials from the Ministry of Energy and
Mineral Resources and Pertamina met on Tuesday with Riau
legislators. The government agreed to hand over the management of
the CPP oil block to the Riau administration in the future after
the province had the necessary human resources.

Caltex's contract for the CPP oil block, which is managed by
Pertamina, was supposed to expire on Aug. 8, but Pertamina
extended the contract for another one-year term. This had evoked
anger among locals, who have long demanded full control over the
management of the CPP block once the contract with Caltex
expired.

The CPP oil block is one of four blocks operated by Caltex in
Riau. Several years ago the CPP block produced about 70,000
barrels of crude oil per day, but the current production level
has dropped to 50,000 bpd after Caltex halted new investments due
to growing uncertainty over the ownership of the oil block.

"We want this agreement from the government to be legalized,"
Al Azhar said, adding that the point was one of seven recommended
at Wednesday's meeting.

Another recommendation was that the blockade and any action
taken by protesters would not be the responsibility of the
alliance.

Earlier in the day Riau figures Edyanus Herman Halim and
Tabrani Rab said no one could guarantee that the people would
cancel their plan to blockade the oil firm's operations.

Edyanus, the secretary of the Expert Council of Riau and a
lecturer at Riau University, and Tabrani, a leader in Riau, said
at separate interviews on Wednesday that they could not promise
the people would not "take up arms" and blockade the oil firms'
operations.

"They have been cheated many times in this business. And
(Tuesday's) deal which was reached by the Riau legislators and
the central government did not mention any compensation for the
people of Riau. We want US$26 million in compensation, or ten
percent of the expected financial profit to be gained by the firm
from the one-year contract extension. We are not talking about
money, but about people's dignity," Edyanus said.

Tabrani said that the deal was a good start (for Riau), and
hinted that people living in the areas where Caltex distribution
pipings were located held a "grudge" against the oil firm because
of its management of the CPP block.

Tension in Riau over the CPP block dispute has caused the
police there to declare a level one alert around the firm's
operations.

More than 1,000 personnel from the North Sumatra and West
Sumatra Military Commands were deployed to back up the Riau
Police in case there was any unrest. (36/37/sur)