East and Central Java get 6.7% and 3.3% interest in Cepu oil block
Thursday, December 22 2005 - 02:41 AM WIB
The agreement was made following a meeting between President Susilo Bambang Yudhoyono and governor of East Java Imam Utomo and governor or Central Java Mardyanto on Tuesday.
Imam Utomo said that East Java province received a larger participating interest because most parts of the Cepu oil blocks are located within the East Java territories.
He said that 40 percent of the participating interest allocated for East Java would go to Bojonegoro regency, where most parts of the Cepu oil blocks are located.
Under the latest agreement, ExxonMobil will have 45 percent interest in the oil bock, while state oil and gas firm Pertamina another 45 percent. The remaining 10 percent will be allocated to the local government which controls the territory where the block field is located.
Both provinces claimed earlier that they had the rights to take part in the operatorship of the oil block which occupies territories of both provincial administrations. Some of the oil block is located in Blora, Central Java while the other part is located in Bojonegoro, East Java.
Both ExxonMobil and Pertamina are also still disputing the operatorship of the oil block. Both oil giants have insisted that they have the rights to act as the operator of the oil block which is estimated to have oil reserves of about 1.57 billion barrels.
But sources said that two oil giants had made an agreement in the operatorship of the oil blocks. “The joint operation agreement between the two companies will be signed in January,” he said.
Meanwhile, Peramina said that it was seeking offshore loans worth about US$300 million to finance new oil and gas exploration activities including those in the Cepu oil block.
The company has appointed Credit Suisse First Boston (CSFB) as the lead underwriter to raise the loans. (godang)