ExxonMobil has yet to agree with Pertamina on Cepu oil block
Thursday, August 8 2002 - 02:49 AM WIB
Pertamina?s director of upstream operation Iin Arifin Takhyan said in Jakarta on Wednesday that terms and condition proposed by Pertamina for the extension of the contract had not received a response from Exxon.
He said that Pertamina?s board of commissioners would soon decide what steps to be taken so that the talks related to the extension of the contract of the Cepu oil block could be settled.
Pertamina has proposed to have higher interest in the oil block, which was taken over by ExxonMobil from Humpuss, one of business groups owned by former president Soeharto?s youngest son Hutomo Mandala alias Tommy who is now in jail for his involvement in the murder of a senior judge.
Pertamina also demands an extra cash from Exxon in compensation for the early extension of the contract which according to the existing agreement will expire until 2010. Under the technical assistance contract, the government has a 65 percent interest in the Cepu oil block, Pertamina (10 percent) and Exxon (25 percent).
Pertamina was reported to demand at least 17.5 percent interest. This will reduce Exxon?s interest to 17.5 percent as the government?s ownership should to be maintained at the current level of 65 percent.
Earlier media reports said that the Cepu oil block was expected to start operation by 2003, with capacity of 50,000 barrels per day. The production would be increased to 200,000 barrels per day. The oil block, which is directly operated by Exxon?s subsidiary Mobil Cepu Ltd, has proven oil reserves of about 2 billion barrels. (*)