Riau Police declare top alert in Caltex operation

Riau Police declare top alert in Caltex operation

JAKARTA (JP): Police in oil-rich Riau province were on top
alert on Tuesday to anticipate a planned blockade by angry local
people on the oil operation of PT Caltex Pacific Indonesia (CPI).

Riau Governor Saleh Djasit said on Tuesday the top alert
status was made to better protect CPI's operation in the
province.

"Don't be surprised with the move...it's for the sake of
everybody," Saleh was quoted by Antara as saying.

A "general gathering" of Riau people on Saturday threatened to
blockade CPI's operation, in particular the CPP oil block if
central government in Jakarta did not immediately revise its
recent decision to extend the contract with CPI to manage the
Coastal Plains Pekanbaru (CPP) oil block. The blockade is
scheduled to start on Thursday.

The protesters also planned to sabotage CPI's oil operation by
creating leaks in crude oil pipelines and occupying sites.

Meanwhile, CPI spokesman Renville Almatsier said the police
had deployed more than 1,000 personnel to safeguard several
operation areas of the company, particularly in Dumai, Duri and
Rumbai because they were located relatively close to local
villages.

Other operations in Minas are quite safe, he said, adding that
the CPP oil block was also comparatively safe because of its
remote location.

"We're quite worried if the action is carried out on Thursday,
particularly if it is at the Dumai oil tanks," he told the
Jakarta Post, adding that the oil tanks at Dumai are located at
the oil terminal ready for shipment.

Renville said that if the Dumai oil tanks are sabotaged, CPI
would be forced to halt oil production from all its oil fields,
prompting a potential loss to CPI of US$9 billion a day.

He hoped the ultimatum would not materialize because it would
damage the country's reputation in the international business
community.

CPI's contract with the CPP oil block was supposed to expire
on August 8 but President Megawati Soekarnoputri issued a decree
earlier in the month extending the contract for another year.

Riau has long demanded control over the management of the CPP
oil block once the CPI contract expires. But central government
has insisted that the extension of the CPI contract was crucial
to ensure the continuity of production as Riau neither has the
financial resources nor the skills to operate the oil block for
now.

But the protesting Riau people have demanded that if the CPI
contract was extended, 30 percent of the net profit from the
operation of the CPP oil block should be transferred to the
province and that more local people should be employed by the
company.

The government said on Monday it would maintain its recent
decision despite the intensifying protest.

Top officials from the Ministry of Energy and Mineral
Resources, Pertamina met with senior members of Riau provincial
legislative council on Tuesday. The government agreed to hand
over the management of the CPP oil block to Riau in the future
after the province has the necessary resources.

The CPP is one of four oil blocks operated by CPI in Riau
province under a production-sharing contract with state oil and
gas company Pertamina.

Several years ago, the CPP block produced around 70,000
barrels per day (bpd), but the current production level has
dropped to 50,000 bpd after CPI decided to halt new investment
last year due to growing uncertainty over the future ownership of
the oil block.

Caltex, a joint venture of United States-based oil companies
Chevron and Texaco, produces around 700,000 bpd of oil at
present, making the company the largest crude oil producer in
Indonesia.(05)