Govt may propose joint operatorship on Cepu

Government discussed on Friday the possibility of a joint operating agreement in a bid to resolve a row between U.S. oil giant Exxon Mobil Corp. and state oil firm Pertamina over the Cepu block, the state enterprises minister said.

Pertamina and Exxon have been disputing for months who will operate giant oil block, which has more than 250 million barrels of recoverable oil.

"Until now we are still discussing the content of a joint operating agreement, we haven't decided who the operator is," Sugiharto told reporters, after a limited cabinet meeting chaired by President Susilo Bambang Yudhoyono.

"But the spirit of power to control is 50-50," he said, without elaborating.

Earlier on Friday, a presidential spokesman said the meeting would include a report from the vice president on various options to settle Cepu.

But Andi Mallarangeng had declined to speculate when a decision on Cepu might come. "I don't know yet," he said.

Vice President Jusuf Kalla said on Thursday the final decision would be up to Yudhoyono.

The president lashed out at Pertamina on Thursday as ineffective, slow and in need of reform.

Even so, local media said that in comments on Cepu Yudhoyono had suggested joint operation might be the best solution.(*)