House objects govt decision to hand over Cepu operatorship to Exxon Mobil

Some factions in the House of Representative had been planning to exercise inquiry right over the government?s decision to give Cepu giant oil block operatorship to Us oil giant Exxon Mobil Corp, Koran tempo reported on Wednesday.

Ami Taher, a legislator from Moslem-based Partai Keadilan Sejahtera (PKS) said that intitiative plan had gained support from 5 factions in the in house including PDI Perjuangan, Partai Amanat Nasional (PAN), Partai Kebangitan Bangsa (PKB), Bintang Pelopor Demokrasi and PKS. Ami said signature collection for the initiative would commence next week. Inquiry right can be proposed to the House with the backing of at least 10 members.

Ami said indicated that the decision to give operatorship of the giant block to Exxon Mobil would inflict loss to the state and was a violation of Constitution.

Exxon Mobil and Pertamina agreed to end its row over the block?s operatorship on Monday and would sign joint operations agreement (JOA) for the block Wednesday. Under the JOA Exxon Mobil will be given top General Manager position while Pertamina will get deputy GM position.

Oil from Cepu, which is located in the border of Central and East Java, is expected flow in late 2008 with peak production rate of 170,000 BPD reached the following year. The block is said to have 600 barrels of oil and 1.7 TCF of natural gas.

Each of Exxon Mobil and Pertamina has 45 percent working interest in the block with the remaining 10 percent shared by local governments where the block is located (*)