Govt vows to continue negotiations on Cepu block

The government will continue the negotiations with U.S. energy giant ExxonMobil Oil Corp. on the management of the Cepu oil and gas block despite the House of Representatives’ rejection of such talks, the Investor Daily Indonesia newspaper reported in its Saturday edition.

Most probably, Exxon will get less than 15 percent share in the block’s output

“President (Susilo Bambang Yudhoyono) has asked for the continuation of negotiations in order to get the best result for national interest, Pertamina’s interest and region’s interest,” Coordinating Minister for Economy Aburizal Bakrie said after meeting President and Vice President Jusuf Kalla along with the members of the negotiating team on Friday in Jakarta.

The team briefed the President about the case.

According to Aburizal, the talks have almost reached the final stage and Exxon will get less than 15 percent stake. Under the production sharing contract, the government and operator of the block will get 85 percent and 15 percent respectively from the total production.

The team, which is chaired by Martiono Hadianto, members are M. Ikhsan, Lin Che Wei, Minister of Energy and Mineral Resources Purnomo Yusgiantoro and Minister of Finance Jusuf Anwar and State Minister of State Enterprises Sugiharto.

Aburizal said the government is giving a small share to Exxon for the sake of the national interest.

“The national interest means our interest, region and Pertamina’s interests,” Aburizal emphasized.

Earlier, the House announced that it would not recognize the negotiating team. But Kalla said it was the government’s domain and asked the House not to interfere in the negotiations.

The Cepu block is estimated to have two billion barrels of potential oil reserves and 11 trillion cubic feet of potential gas reserves, which is expected to boost Indonesia’s oil output by 18 percent. Output has been declining over the last five years.(*)