CNOOC to pull out from West Madura

Chinese firm CNOOC Ltd has decided to pull out from West Madura PSC block offshore East Java out of disappointment on inconsistent attitude state oil, gas company PT Pertamina (Persero), its partner in the block.

Upstream oil, gas authority BPMIGAS chairman R. Priyono was quoted by Tempo Interaktif as saying that he was still trying to persuade CNOOC to pull out of the block, but the chance was quite remote as the company has been ?heavily disappointed?.

CNOOC is the partner in the block with 12.5 percent interest.

The block?s contract will expire this week, but the government has yet make up its mind on the contract extension, as Pertamina backed by public pressure, is trying to get 100 percent stake in the block.

Currently, the block is operated by Korean firm Kodeco Energy, which also has 12.5 percent stake. Pertamina is now holding 50 percent stake in the block with another 25 percent equally shared by little known two local companies.

Pertamina has been offered by government to have its interest increased to 60 percent in the extension contract and granted operatorship two years after extension, but the state company declined the offer and demanded 100 percent interest.

The government is requiring the new operator of the block to be able to raise production to 30,000 BPD from around 16,000 BPD currently and BPMIGAS has expressed doubts that Pertamina without assistance from CNOOC and Kodeco would be able to meet the requirement. (*)