ExxonMobil, Pertamina have to sign MOU by May 20: Government

The government has pushed Amerian energy firm ExxonMobil and state oil and gas PT Pertamina to speed up their talks on the future of the Cepu oil and gas block, giving them until May 20 this year to sign an agreement.

?A memorandum of understanding (between ExxonMobil and Pertamina) over the Cepu block must be signed by May 20 this year,? Rizal Mallarangeng, a spokesman for the Coordinating Minister for the Economy, said on Wednesday after the meeting between ExxonMobil and the Indonesian negotiation team. Rizal is also the spokesman for the negotiation team formed by the government.

The Cepu block, which is located in the border areas of Central Java and East Java, is believed to contain huge oil and gas resources. It initially belonged to Pertamina. ExxonMobil who took over the contract over the block several years ago wants to extend the contract that is due to expire in 2010. However, Pertamina demanded high compensation, bringing the talks on the contract extension into an impasse last year.

Rizal stressed that President Susilo Bambang Yudhoyono had ordered the resumption of the talks between both companies and wanted Pertamina to quickly reach an agreement with ExxonMobil over the block

?A quick solution is in the interest of the nation. It will be good for the nation?s investment climate and it will allow the government to get revenue from the block more quickly,? Rizal said.

He noted however the government also wanted the negotiation between both parties to be carried out in ?good faith, good will and with the goal of reaching a win-win solution.?

He further said negotiation teams from Pertamina and ExxonMobil would start ?technical discussions? on Thursday. (Godang)