Govt pushes Pertamina to form 50-50 JV to develop Cepu giant oilfield
Monday, September 1 2003 - 09:13 AM WIB
Government said on Monday it had proposed that state oil and gas company Pertamina to form a 50-50 joint venture with ExxonMobil Corp. to develop the Cepu oil block - a huge oil and gas block which had been the source of dispute between the two companies.
Pertamina plans to raise money from bond issuances and other sources to help fund part of the field?s development costs, Energy Minister Purnomo Yusgiantoro told reporters Monday.
"Pertamina will put some money into Cepu?s development," he said.
ExxonMobil had been struggling to retain control over Cepu block, which contract would expire in 2010. Exxon was looking for 20-year contract extension in order to be able to economically develop the field, but Pertamina, the block?s owner, was asking for cash and 50 percent interest in the block.
ExxonMobil had discovered some 600 million barrels of proven crude reserves and some 5TCF of gas in Cepu. Exxon Mobil says it has spent $400 million on the site so far and is willing to invest a further $2.6 billion to get the oil pumping, but will only do so if the government extends its contract.
Negotiations have stalled over Pertamina?s claim for a half share in the project. Exxon Mobil has said it?s willing to accede to Pertamina?s demands, but only if the state-owned company puts in half the development costs. (godang)