ExxonMobil sees Cepu deal to be sealed soon

ExxonMobil Oil Indonesia chief Peter Coleman said he expects a deal with state-run oil and gas firm PT Pertamina on the joint operation of the Cepu oil field "sooner rather than later", AFX News reported Friday.

"All I can say is that negotiations are continuing and we are hopeful that we resolve it sooner rather than later," Coleman told reporters after attending a meeting with President Susilo Bambang Yudhoyono.

Pertamina president Widya Purnama said recently that both parties may sign this month the long-awaited joint operation agreement (JOA) for the development of the Cepu block.

"The positive thing is that we are still talking, we are still moving forward. I think there are positive signals and again we received another commitment today that we continue with those discussions," Coleman added.

Located in East and Central Java, the Cepu block is expected to start producing oil in 2008 with an estimated output of 160,000-180,000 barrels per day.

In June, the government agreed to award Pertamina and ExxonMobil a 30-year contract to develop the Cepu block. But since then, there has been very slow progress in talks between the two firms on a joint operation agreement.

ExxonMobil had been insisting that it should operate Cepu by itself while Pertamina had been suggesting that the operatorship be switched every five years, with Pertamina operating the block for the first five years.(*)