Amahl S. Azwar, Jakarta – Students from Riau University on Tuesday rallied before US-based oil and gas giant Chevron Pacific Indonesia's headquarters in Pekanbaru, Riau, demanding the central government hand over operation of the Siak oil block to the local administration.
The protest escalated as the students burned tires and broke the five-meter high metal gate at Chevron's Rumbai camp, however, the Antara news agency reported the rally remained under control.
Rally coordinator Yopi Pranato, a member of Riau University's Students Executive Board, said the protest was intended to push the government to "nationalize" the Siak block.
"This foreign domination of our natural resources has increased in recent years thanks to our regulations, which support free competition. As a consequence, local companies must become 'the step-children' when it comes to exploiting the resources," Yopi said as quoted by Antara.
By letting the Riau administration handle the exploitation of the Siak block, he added, the government would start the country on the road to rule its own resources.
Located in four Riau regencies: Kampar, Rokan Hulu, Rokan Hilir and Bengkalis. Siak is just one of the blocks run by Chevron.
Chevron Indonesia is the largest crude oil producer in the country, beating Indonesia's state-owned PT Pertamina and French giant Total SA's local subsidiary, Total E&P Indonesie.
The 2,480-square kilometer Siak block contract will expire on Nov. 27. It currently produces 2,000 barrels per day (bpd) of crude oil or equal to 0.6 percent of Chevron's total average production of 330,000 bpd, which is 40 percent of Indonesia's total oil output.
It was earlier reported that Chevron, which operates mostly in Sumatra, proposed a contract extension in 2010. Meanwhile, the Riau provincial administration expressed its willingness to take over operations through PT Riau Petroleum, which is owned by the local government.
The Energy and Mineral Resources Ministry's oil and gas chief Edy Hermantoro told The Jakarta Post on Tuesday the government was still evaluating the block's economic and technical aspects.
"Loads of aspects need to be discussed," he said in a text-message without revealing when the government would announce the decision about Siak.
Separately, Chevron's communications manager Tiva Permata said the firm's operations at the block were based on the production-sharing contract between the contractor and the Indonesian government. As for the future of the Siak block the corporation would let the central government decide its final fate.
The Siak block is among 29 concessions due to expire between 2013 and 2021. Other blocks include Mahakam in East Kalimantan, currently operated by Total E&P Indonesie, which is set to expire in 2017.
Petitioners behind the dissolution of the now-defunct upstream watchdog BPMigas late last year also used the "nationalism" card over the gas-rich Mahakam block, demanding the government let PT Pertamina handle the block.