Govt will not be involved in dispute over Cepu oil block: Purnomo

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has made it clear that the government would not be involve in the dispute between Pertamina and ExxonMobil over the operation of the Cepu oil block in East Java.

"It's up to ExxonMobil and Pertamina to decide which of them to become the operator of the Cepu oil block," he said during a hearing with members of the House of Representatives in Jakarta Wednesday. "The government's task was over with the signing of the new contract for the development of the oil block on September 17, last year," he added.

The minister said that the government had proposed a joint operating committee comprising of representatives of Exxon, Pertamina and the local administration to help solve the difference. "The committee will decide all the action plans that need to be taken developing the oil block. But again this is only a suggestion," he added.

Under the new contract agreement, Pertamina and ExxonMobil will have participating interest of 45 percent in the Cepu oil block, each. The other 10 percent will be allocated to the local government which oversees the territory where the oil block is located. Both oil giants however want to become the operator of the massive oil block.

Pertamina had proposed Exxon to take turn on the operatorship for every five years but the proposal is opposed by Exxon saying it has the rights to act as the sole operator until the end of the 30 year-contract.

Meanwhile Exxon's Vice president for planning, commercial and public affairs, Maman Budiman said that Exxon's unit Mobile Cepu should become the operator under the MoU agreement signed with the government.

"As the follow up of the MoU, Exxon has proposed Pertamina to assign its senior officials to sit in the management of Mobile Cepu," he said, adding that the offer was rejected by Pertamina.

Pertamina's president director Widya Purnama insisted that the government had agreed to appoint Pertamina as the operator of the oil block. According to him, the agreement was made during his meeting with former chief economic minister Aburizal Bakrie, Minister Purnomo and President Susilo Bambang Yudhoyono. (Godang)