BP Migas says Pertamina cannot operate Cepu block alone

State oil and gas firm PT Pertamina cannot unilaterally operate the Cepu oil fields in the event that it fails to reach a deal on joint operation with ExxonMobil Oil Indonesia Inc, Kompas reported, citing an industry regulator.

"Pertamina and ExxonMobil own equal shares of 50 pct each (in the operation of the the fields) so all development plans must be approved by both sides," Kompas quoted Trijana Kartoatmodjo, deputy head of the Upstream Oil and Gas Regulatory Board (BP Migas)as saying.

Operation of the Cepu block can only proceed after ExxonMobil and Pertamina sign a joint operation agreement which they have so far failed to do.

Kompas quoted Pertamina chief Widya Purnama as saying if agreement cannot be reached the state firm is likely to push ahead with its own operation of the block and will file a development plan to BP Migas next month.

He added that Pertamina is aware that such a decision is likely to prompt legal action from ExxonMobil.

The Cepu block in east and central Java is expected to start producing oil in 2008 with estimated output of 160,000-180,000 barrels per day.(*)