ExxonMobil to delay Cepu gas development

A senior official of ExxonMobil Oil Indonesia (EMOI) has said that the firm and its partner state oil and gas company PT Pertamina would not soon develop the gas reserve of the Cepu block as they would focus on finding more reserve there.

Budiono, who is exploration director of EMOI as well executive director of Mobil Cepu Ltd, said on Sunday that exploration activities had thus far found 1.7 trillion cubic feet of gas at one well of the block.

?We hope to find more,? Budiono said at a press conference to announce the agreement between ExxonMobil and Pertamian on their cooperation to develop the block located in the border areas of Central Java and East Java.

Budiono also said the Cepu gas ?is not cheap to develop? given that the carbon dioxide (CO2) element in the gas reach 30 percent.

On Monday, Pertamina and ExxonMobil announced the end of their years-long dispute over the block with Pertamina agreeing to let ExxonMobil to become the operator of the block over the contract period of 30 years. The previous president of Pertamina, Widya Purnama, earlier insisted that the state-owned company should become the operator of the block. He was replaced by the government with Ari Sumarno several days ago in a bid to remove the stumbling block for ExxonMobil to become the operator of the block.

Pertamina and ExxonMobil?s subsidiaries Mobil Cepu Ltd and Ampolex Cepu Ltd will sign the Joint Operation Agreement (JOA) for the block on March 15. The joint venture expect to start developing the 600 million barrel oil reserve of the block in 31 months from now. The block is expected to produce up to 170,000 barrels of oil six months after the first production. (Alex/Godang)