ExxonMobil, Pertamina face obstacle to appropriate lands in Cepu

American oil and gas giant ExxonMobil Corp and its equal partner state oil and gas company PT Pertamina are facing obstacles in clearing lands for their future oil and gas operation at the Cepu block.

In view of the problem, the partnership has notified the oil and gas regulator BP Migas that they would start production activities at the field 10 months later than the initial schedule of the last quarter of 2008.

?Land appropriation is difficult to carry out since the drilling site is located in the residential areas and rice fields. That?s why they asked for ten months of production delay,? Chairman of oil and gas upstream regulator Kardaya Warnika said in a hearing with the House of Representatives.

Another factor behind the delay is that the partnership had modified the plan for the development of the block become some fields which are originally parts of the block have been transferred to Pertamina in compensation for Pertamina?s willingness to give a 45 percent stake in the block.

In response to the request, Kardaya said BP Migas had asked the partnership to speed up the development of the block to the first quarter of 2009.

The agency suggested the partnership make use of the production facilities owned by Pertamina-PetroChina East Java Ltd Joint Operating Body (JOB) to develop its Banyu Urip field, one of the largest fields found in the block, which is located close to the Sukowati field owned by Pertamina-PetroChina JOB.

?At present, they are studying the possibility of speeding up the production,? Kardaya said.

According to Kardaya, the Cepu block will first produce 20,000 barrels per day and the output will be gradually ramped up to 165,000 bpd. (Godang)