Jakarta – Indonesia warned yesterday that protests disrupting production by one of the country's largest oil producers could damage the budget and the economy. Jobless locals demanding work have blocked the entrance to PT Caltex Pacific Indonesia (CPI) oil field in Riau province on Sumatra island, hitting operations.
"Caltex oil production should be maintained," Mines and Energy Minister Purnomo Yusgiantoro told reporters in Jakarta. "If the production is affected then it would affect the national budget and then affect our economy," Reuters quoted the minister as saying.
Lawlessness is on the rise as Indonesia lurches through its transition to democracy. Foreign companies operating outside the main island of Java are a particular target because of their wealth.
A small bomb yesterday exploded at the Mataram office of copper-gold miner PT Newmont Nusa Tenggara on the eastern island of Lombok, blowing a hole in a wall but injuring no one, a company official said. But the blast did not affect the company's mining operations, which are on a neighbouring island.
Mr Yusgiantoro said he had taken the security problem up with Vice-President Megawati Sukarnoputri and Chief Security Minister Susilo Bambang Yudhoyono and security forces would be ordered to do more to protect businesses.
Caltex produces about half Indonesia's oil output, but unrest in Sumatra has hit its operations. Caltex's output was 690,000 barrels per day (bpd) in September, compared with a target of 740,000 bpd.
Indonesia, the only Asian member of the Organisation of Petroleum Exporting Countries (Opec), produces about 1.30 million bpd. Indonesia's Opec quota is 1.36 million bpd. "Our economy still relies on oil," Mr Yusgiantoro said. "Therefore, we have to keep our oil production working and even increase it to meet our Opec quota."
The latest trouble follows a series of incidents that have plagued the oil company, jointly controlled by Chevron Corp and Texaco Inc. According to a report in the Indonesian Observer yesterday, Riau villagers have been blocking the entrance to the oilfield for a week.
One group has occupied a water treatment plant run by the company, the area's only source of clean water. Most villagers demonstrating against CPI said the company should employ them, rather than outsiders. But the company pointed out that its workers must have certain skills and qualifications.
"Although we are unable to predict the outcome, CPI remains hopeful that discussions will lead to a win-win solution for all parties," the company said. It is appealing to the protesters to cease the blockade as their action is affecting its business.