ExxonMobil boss to meet Purnomo over Cepu oilfield contract extension
Tuesday, February 5 2002 - 06:50 AM WIB
Purnomo did not say the name of the executive, while ExxonMobil office in Jakarta could not be confirmed.
State oil and gas firm Pertamina and ExxonMobil had been in talks over the oilfield for months. Pertamina insisted on acquiring 35 percent working interest in Cepu Technical Assistance Contract (TAC) in return for contract extension for the oilfield. Originally, Pertamina was only entitled to get 10 percent participation. ExxonMobil had thus far declined to give the 35 percent to Pertamina.
Cepu oilfield, which has at least 250 million barrels of reserve, is scheduled to commence production in 2003, with peak production of more than 100,000 barrels per day.
A source in Pertamina said Pertamina said that if ExxonMobil wanted to extend the contract without giving Pertamina 35 percent working interest, it must change its contract from Techical Assistance Contract - which was originally designed only for local player- to standard production sharing contract (PSC). Under the TAC scheme, contractor will get 30 percent of net oil revenue, while under PSC, contractor will only get 15 percent.
ExxonMobil acquired Cepu oilfield through acquisition of Ampolex (Cepu) Pty, which had 49 percent interest in the field. The remaining 51 percent interest was controlled by Humpus Patragas, a joint venture between Pertamina and Humpuss, which is controlled by former president Soeharto?s youngest son Hutomo Mandala Putera or Tommy.
Ampolex later bought Humpus?s stake in the oil joint venture, making ExxonMobil the majority shareholder of the oil block.
?The granting of the TAC contract to Tommy was rife with collusion, corruption and nepotism. We don?t want to end up in jail some day for extending faulty contract,? said the source. (godang)