Development plan for Cepu oil block rejected

BP Migas, the regulatory body for oil and gas exploration and production, has rejected the plan of development (POD) for the Cepu oil block proposed ExxonMobil and state owned oil and gas company Pertamina for being incomplete, Kompas reported on Wednesday.

Deputy for operation of BP Migas, Achmad Luthfi, confirmed in Jakarta on Monday that the POD for the Cepu oil block had been returned to Pertamina and ExxonMobil for being incomplete.

"We have returned the POD to the Joint Operation Committee (JOC) of Pertamina and ExxonMobil for correction," he said, adding that the POD which comprised only of 10 pages was too brief given the large scale of the works to be carried out in the development of the Cepu oil block.

He hoped that the POD which contains the working agenda for the first five years of the development of the Cepu oil block could be resubmitted to BP Migas in the middle of this month so that the agency could soon process it and submit it to Minister of Energy and Mineral Resources for approval.

Pertamina and ExxonMobil agreed last month to jointly develop the untapped oil block for 30 years. With the agreement, the government hopes that the development of the oil block which is estimated to contain oil reserves of about 600 million barrels could be begun next year so that the oil block can begin production in 2007.

The Cepu oil block is expected to be able to produce between 165,000 and 170,000 barrels per day during its peak production at the end of 2008.

Lufthi said that Pertamina and ExxonMobil had not also filled in the key positions in JOC which would oversee the development of the Cepu oil block. "ExxonMobil has appointed its senior executive as the general manager of JOC, but the positions under the GM are still vacant," he said. (*)