Cepu crude oil might be better for exports: Pertamina

Crude oil to be produced from the Cepu oil field in East Java might be better used for exports rather than being processed at the Cilacap refinery plant in Central Java, according to a senior official of state owned oil and gas company PT Pertamina. Kompas reported Saturday.

Edi Setianto, Pertamina's deputy director for processing said Friday that if the crude oil from the Cepu oil field were processed at the Cilacap refinery plant, the transportation cost would be too high.

"There are some ideas arising that it would be more profitable if the crude oil from the Cepu field is used for exports, because the high transportation cost will make the processing at the Cilacap refinery expensive," he said.

The other alternative, according to Edi, is to build a new refinery plant, within the Cepu oil field so that the transportation cost could be reduced.

At present, the Cilacap refinery plant processes 348,000 barrels of crude oil per day. At least 70 percent of the crude oil is imported.

Pertamina and ExxonMobil Indonesia said earlier that they planned to carry out drilling activities on 10 wells in 2007 as part of the development plan for the Cepu oil block, which is estimated to have oil reserves about 600 million barrels. The production is expected to begin in 2009. (*)