Cepu deal may be inked early September

Government will finalise the $2 billion Cepu oil project with Exxon Mobil Corp. in early September after replacing the chief of state oil company Pertamina, a government spokesman said on Friday.

"The government expects to sign Cepu deal with Exxon Mobil in early September," Rizal Malarangeng, a spokesman for the government's Cepu negotiation team said, confirming a target Jakarta had set forth after making a breakthrough in August.

Malarangeng said the signing would happen after the government replaced Pertamina's CEO Widya Purnama who insisted that Pertamina must hold the block's majority interest and operatorship of the block. Another official said this week that the change would happen this month.

Signing the deal would close a four-year saga that had clouded the future of a development with as much as half a billion barrels of reserves and that could add 180,000 barrels per day (bpd) to Indonesia's production.

Pertamina owns the Cepu block but under the deal Exxon Mobil and Pertamina will co-operate the block. Revenue when production begins will be shared by the two companies and the government.

Top candidates to succeed Purnama include Iin Arifin Takhyan, director general of oil and gas at the Mines and Energy Ministry; Martiono Hadianto, head of Pertamina's board of commissioners, or Tubagus Haryono, chief of BPH Migas, the government's downstream oil sector regulator, Malarangeng added.(*)