Central Java demands fair share from Cepu oil production

The provincial administration of Central Java has demanded a fair share from the production of the Cepu oil block which is located at the province's border areas with East Java, Bisnis Indonesia reported on Monday.

The Central Java governor Murdiyanto said over the weekend that the government should establish a fair production sharing formula so that the development of the massive oil field would not result in a financial gap within the areas located near the oil block.

Although, the Cepu oil block is geographically located within the area of East Java, the Central Java province should also be given a fair share from the oil field's production, he said.

ExxonMobil Indonesia which operates the Cepu oil block under a technical contract with state owned oil and gas company Pertamina is negotiating with the government for the extension of its contract for another 20 years.

Under the new production sharing contract, Exxon will likely receive 45 percent of the production from the Cepu field, Pertamina 45 percent and East Java's province of Bojonegoro the remaining 10 percent. (*)