East Java sets up company to handle oil exploration activities

The provincial administration of East Java has established a special company to take in charge of the local government's oil and gas related businesses such as in the operation of the Cepu oil block. Kompas reported on Friday.

East Java Governor Imam Utomo said in Surabaya on Thursday that the new company PT Petrogas Jatim Utama (PJU) would operate as the holding company to coordinate and control the local government's oil and gas related businesses

"The company would be for example responsible in managing the local government's interest in the Cepu oil block," he said.

Under the existing agreement, ExxonMobil will have 45 percent interest in the oil bock, Pertamina another 45 percent. The remaining 10 percent will be allocated to the local governments which control the territory where the block field is located.

The government has decided to give 6.7 percent of the 10 percent participating interest allocated for the local administrations from the Cepu oil block to East Java province, and another 3.3 percent to neighboring Central Java province.(*)