Indonesia sets Tuesday deadline to resolve Cepu dispute

Indonesia has set a Tuesday deadline for state oil and gas company PT Pertamina to resolve its dispute with ExxonMobil Corp. on the operatorship of the oil-rich Cepu block, the Reuters on Monday and the Investor Daily newspaper reported from Jakarta on Tuesday.

The government's inability to broker a deal has been cited as a factor undermining investor confidence in the world's fourth most populous country and Southeast Asia's largest economy.

Sugiharto told reporters the country's energy minister would take over negotiations with the U.S. oil giant over the block after the deadline.

"If by Tuesday,Pertamina cannot solve it,then in accordance with the direction from the president and vice-president, the energy minister and myself will (take over)," said Sugiharto.

Vice President Jusuf Kalla had said earlier this month that President Susilo Bambang Yudhoyono wanted settlement of the dispute over Cepu in a week.

On Thursday, a government official said Jakarta may appoint Exxon as operator of the $2 billion Cepu oil block, which promises to boost the Asian OPEC member's lagging production.

The official said the government was likely to give the operatorship of the block to Exxon because it had the technology to sustain production levels and prevent any fall in output after operations begin. (*)