It's Pertamina's right to end Exxon contract in Cepu: Purnomo

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that state oil company Pertamina, as the owner of the Cepu oil block, had the right to end the contract of ExxonMobil Oil Indonesia (EMOI) to operate the oil block, Bisnis Indonesia reported on Saturday.

The minister made the statement following a decision made by Pertamina's management not to extend EMOI?s contract over the Cepu block.

"Pertamina has the right to do so since the block is owned by the state firm. Any decision by Pertamina should be reported to the government and ExxonMobil's management," he said.

Minister added that the decision by Pertamina not to extend EMOI's contract would affect the national oil production "trend", but he did not elaborate.

The technical assistance contract held by EMOI to operate the Cepu block will end in 2010. But the oil giant demanded the earlier extension of the contract for the certainty of its investment in the oil field for another 20 years.

EMOI claims to have found 600 million barrels of oil reserves and between 700 billion and 1.25 trillion cubic feet of gas reserves in the block after drilling few exploration wells. (*)