Riau Islands sets up team to take new look at Natuna companies

Fadli, The Jakarta Post, Batam

Riau Islands province has set up a team to evaluate oil and gas production companies in Natuna to determine how best to increase production and revenue.

Riau Islands Governor Ismeth Abdullah told The Jakarta Post the team, consisting of senior staff members from the provincial administration, would be headed by Hamid Rizal, a former Natuna regent from 2000 to 2005.

In addition to cataloging the activities of each operator, the team also will make suggestions on steps the administration can take to boost exploration and production in the Natuna oil and gas field.

"The team will also determine the output capacity of each oil and gas company currently operating in Natuna so as to boost provincial revenue," Ismeth said.

An organization recently set up by the administration will later decide on production sharing schemes with the oil and gas companies, based on the information gathered by the evaluation team.

Ismeth also reiterated an earlier statement by Energy and Mineral Resources Minister Purnomo Yusgiantoro, that the provincial administration would in principle be involved as a stakeholder in the Natuna oil and gas field.

Ismeth acknowledged he was still unsure about the appointment of Transword Exploration Ltd. to explore the Duyung block and Indoreach Exploration the Pari block in the Natuna oil and gas field. However, he expressed confidence both operators would provide concrete contributions to the province if eventually appointed.

"We are looking forward to being involved in production at the D-Alpha block, which is the biggest block in the Natuna oil and gas field. We don't care whether Exxon is reappointed as the operator or a new company is appointed, as long as they make significant contributions to the province we will support them," Ismeth said.

The provincial administration earlier proposed it be involved as a stakeholder in the Natuna oil and gas field. As an initial step, the administration submitted a proposal to the government on its acquiring a stake in the D-Alpha block.

Ismeth said the government was still considering the proposal, adding that Minister Purnomo had expressed his opinion that every province was entitled to own shares in oil and gas exploration sites located in their territory.

In addition to Exxon, Conoco Oil, Premier Oil and Star Oil are involved in oil and gas production in Natuna. Natuna regency contributes about Rp 600 billion (about US$66.6 million) annually to the provincial coffers and another Rp 180 billion to other regencies and mayoralties in the Riau Islands.