ExxonMobil opposes results of Lemigas?s study on Cepu oil block

State owned oil and gas Pertamina and ExxonMobil Indonesia have failed to agree on the result of study conducted by Lemigas, the government-owned oil and gas research center, on the estimated volume of oil and gas reserves on the Cepu oil block in Central Java.

Lemigas has been appointed as an independent research company to carry out study on the potency and the volume of oil and gas reserves on the oil block. The study will be used as the basis of negotiations for the extension of the contract which is currently held by ExxonMobil Indonesia?s subsidiary Mobil Cepu Limited.

Exxon, however, opposed the result of the study made by Lemigas particularly those related to the volume of the oil reserves on the oil block during a meeting held in Jakarta on Wednesday, sources told Petromindo.

According to Lemigas?s study, the oil block has proven oil reserves of about 450 million barrels, which are almost the same with Pertamina?s own research. But ExxonMobil said that the estimated oil reserves volume was only about 250 million barrels.

Both Exxon and Pertamina declined to reveal the results of the meeting. "There is no agreement yet. The negotiation is underway," Pertamina?s director for upstream operation Iin Arifin Takhyan. ExxonMobil?s spokeswoman Deva Rahman also make a similar comment. "We hope the negotiations will give fare benefits the government, the Indonesian people, Pertamina and Exxon," he said.

ExxonMobil is proposing the extension of its contract on the Cepu oil block which will expire in 2010 to another 20 years. But the planned extension of the contract has become controversies after some top government officials and oil and gas experts said that the future operation of the lucrative oil block should be better given to Pertamina or other local companies to provide utmost benefits to the Indonesian people. (godang)