Govt wants Pertamina to chair Cepu management committee

Government wants its state energy firm to chair a joint operating committee with the local unit of US giant ExxonMobil that would supervise development of the Cepu oil block, a minister said Monday as quoted by agency.

ExxonMobil and Pertamina have been embroiled in a dispute over who will operate the block, Indonesia's biggest oil discovery in decades, despite signing a production-sharing agreement last September.

State Minister for State Enterprises Sugiharto said that the two firms were still negotiating a joint operation agreement.

"We're trying to have Pertamina lead the joint operation committee," he told reporters.

Pertamina and ExxonMobil have been locked in talks since June, when the government agreed to grant them a 30-year contract to jointly develop the Cepu block.

ExxonMobil has suggested that its unit operate Cepu, with Pertamina holding key positions in the company, while Pertamina wants the two firms to take turns as operators, a proposal which the government and ExxonMobil had dismissed.

The Cepu oil block is expected to produce some 170,000 barrels of oil per day.

President Susilo Bambang Yudhoyono indicated last week that he may push the two sides to jointly operate the block.(*)