Riau 'To Manage Its Own Oil Fields'

                 The province can manage its oil riches when the
                 present contract expires in 2001 and the central
                 government will give its backing, says
                 Abdurrahman

                 JAKARTA -- Indonesian President Abdurrahman
                 Wahid has agreed to sign a decree allowing the
                 province of Riau to manage its oil and gas riches
                 when PT Caltex Pacific Indonesia's contract expires
                 in 2001, a report said yesterday. "If you can really be
                 competitive, the central government will guarantee
                 that," Mr Abdurrahman said during a dialogue with
                 local civic, public and religious leaders.

                 The President advised the local authorities to form a
                 company to manage the resource, adding that he
                 would beg for the approval of investors abroad if
                 necessary.

                 "If the signature of a minister is not enough, the
                 President himself will sign it," he said.

                 Riau is home to the base operation of PT Caltex
                 Pacific Indonesia which has been exploiting the area's
                 intensive onshore oil resources under a contract
                 signed in 1963 and extended in 1991.

                 The province produces about 800,000 barrels of
                 crude oil per day.

                 Caltex is operating under a production sharing
                 contract with the state oil and gas company
                 Pertamina, and proceeds go to the state coffer and
                 only a small portion of the revenue trickles back into
                 the province.

                 With the fall of former President Suharto in 1998,
                 demand for greater shares of the revenues from the
                 province's oil riches have been on the rise.

                 Various groups have since demanded a federal state
                 status for Riau, others wanted broad autonomy while
                 a few have demanded that the province breaks away
                 from Indonesia.

                 Mr Abdurrahman visited Pekanbaru, capital of the
                 province on Saturday, where he also addressed a
                 religious meeting held at the city's main Anur mosque.

                 His visit to Pekanbaru was slightly marred by a street
                 demonstration by some 1,000 students who sought to
                 meet the President and hold a dialogue with him.

                 Police however disbanded them by force, firing
                 warning shots and teargas canisters. No serious
                 injuries were reported.

                 Meanwhile, Australian Prime Minister John Howard
                 said on Saturday he wanted to mend the country's
                 relations with Indonesia and expressed interest in Mr
                 Abdurrahman's proposal to hold a summit with East
                 Timor leader Jose Alexandre "Xanana" Gusmao.

                 This was in response to Mr Abdurrahman's earlier
                 comments that he wanted to join Mr Howard and Mr
                 Xanana in talks to strengthen ties among the three
                 countries. -- AFP
 
 

                 No control over profits

                 RIAU produces about 800,000 barrels of crude oil a
                 day.

                 Caltex is operating under a production sharing
                 contract with the state oil and gas company
                 Pertamina, and proceeds go to the state coffers and
                 only a small portion of the revenue trickles back into
                 the province.

                       Adapted from The Straits Times, 1 May 2000.