Govt wants development of Cepu block soon

The government intends to bring into production oil from Cepu block in Central Java in the near future arguing that it will support significantly to Indonesian oil output.

"The development of Cepu block is important for Indonesia, it will add production significantly to Indonesian oil output and we need it to be developed in the near future," Minister Energy and Mineral Resources Purnomo Yusgiantoro told reporters on Tuesday.

Purnomo confirmed that Chief Economics Minister Aburizal Bakrie had asked state oil and gas firm PT Pertamina to start renegotiation with ExxonMobil, which has been seeking an extension of its contract in managing the Cepu block. The extension of this contract, which expires in 2010, is crucial to allow ExxonMobil makes new investment to develop the block.

Pertamina said in August it would not extend the contract as ExxonMobil could meet the terms and conditions set out by the state company.

Cepu's Banyu Urip field, according to ExxonMobil's finding, contains in excess of 250 million barrels of recoverable oil and 5.9 trillion cubic feet of gas.

The field was originally planned to be developed to flow oil at an initial rate of 25,000 barrels per day (bpd) in 2004 ramping up to its full capacity of 150,000 bpd. But prolonged negotiation between Pertamina and ExxonMobil put the development on halt. (godang)