Cepu Block located between Centre Jawa and East Java. It is known as a rich block because it has a source of oil and gas. Block Cepu, where geographically located between three districts, Blora (Centre Java), Bojonegoro and Tuban (East Java) has given a contribution to national budget (APBN) and respected local government budget (APBD). About 33 per cent of the land of Cepu Block is owned by Blora, 67 per cent owned by Bojonegoro and the rest is owned by Tuban. Ironically, however, although 33 per cent of the Block belongs to Blora, the district does not receive any financial income from the oil exploration. There is no resources share fund from Cepu Block. Moreover, the district has to deal with the negative impacts of exploration activities at the Block Cepu such as damaging of infrastructure, environmental pollution, and social disturbance. Blora District has protested to Centre Government, but so far there is no outcome. Centre Government asked that this problem should be studied first. The central government argue that if it is approved, then there will be domino impact: other districts will do the same like Blora. Blora district is struggling to get equality in resources share fund (dana bagi hasil). Efforts have done, seminars and workshops, lobby to DPD (Upper House) to find a solution. Now the district government is proposing judicial review to constitution court. This research examines the history of Block Cepu. It reveals the history of the block from the colonial era up to the reformation era. Further, the research aims to know how the tension between local government (Blora Government) and central government regarding Blok Cepu oil exploration. The research suggests that there is injustice in the distribution of revenue from the exploration and it is understandable if Blora district government struggle to get proportional revenue sharing.
Effect of Natural Resources Share Fund on Economic Growth, Unemployment and Poverty in Producing Regions in Indonesia
