Indonesia, ExxonMobil resume talks on Cepu block

After months of delay, American energy firm ExxonMobil met today (Wednesday) with the negotiation team formed by the Indonesian government over the future of Cepu block.

?ExxonMobil confirms that today (Wednesday) it has met with the negotiation team designated by the Government of Indonesia for Cepu block. ExxonMobil remains interested to develop the block further,? ExxonMobil?s spokesperson Deva Rachman said in a statement.

The Cepu block located in the border areas of Central Java and East Java is believed to contain huge oil and gas resources. The block was initially owned by state oil and gas company Pertamina. ExxonMobil who took over the contract over the block several years ago wants to extend the contract that is due to expire in 2010. However, Pertamina demanded high compensation, bringing the talks on the contract extension into an impasse last year.

A governmental official said President Susilo Bambang Yudhoyono had ordered the resumption of the talks.

"There is a direct order from the president to solve this issue as soon as possible," Rizal Malarangeng, a spokesman for the Coordinating Minister for the Economy, was quoted by Wall Street Journal as saying. "Our crude-oil production is declining while global prices are very high. We are going to try to solve this issue as soon as possible."

Minister of Energy and Mineral Resources Purnomo Yusgiantoro refused to give much comment about the negotiations, saying, ?The negotiation is handled by the office of the Coordinating Minister for the Economy?.

The negotiation team, comprising Pertamina and governmental officials, is headed by Coordinating Minister for the Economy Aburizal Bakrie. (Godang)