Exxon Mobil says 500 MBO estimates in Cepu block premature

US oil giant Exxon Mobil Corp. said on Thursday that it was still too early to confirm the government?s estimates that Cepu oil block in Central Java has reserves of 500 million barrels of oil.

"We need to do more drilling activities to know more about the specific reserve number there and it looks like very large resources but appraisal drilling works are needed to know how much oil and/or gas has been discovered in the Cepu Block," said Harry Longwell, Exxon Mobil executive director after a meeting with President Megawati Sukarnoputri.

A government revealed Tuesday estimated that recoverable reserve in the whole Cepu block, including unexplored ones, could reach up to 500 million barrels.

Exxon Mobil had earlier announced discovery of oil in excess of 250 million barrels in Cepu block after conducting five exploration drillings.

Exxon Mobil is currently delaying exploration and appraisal works in Cepu block pending the results of negotiations with state oil and gas Pertamina.

Exxon Mobil is seeking for contract extension for Cepu block, which will expire in 2010, while Pertamina is trying to get higher than 10 percent equity participation in the block in return of contract extension.(alex)