Local govt urged to soon issue IMB permits for Cepu oil project

The Energy and Mineral Resources Minister Jero Wacik has called on the local administration of Bojonegoro regency in East Kalimantan to soon issue building permits (IMBs) for the construction of several production facilities in the Cepu oil block.

Jero warned that the permits should be soon issued to ensure that the Cepu oil block would be able to begin full operation in 2014. The minister said that the local government should support the development of the Cepu oil block because in the long-run it would give a significant contribution to the local economy.

?The Cepu oil project will bring positive impact on the local economy especially as it would open job opportunities for the locals,? he was quoted as saying by Kontan business daily.

At least three major projects including the construction of production facilities, pipeline network and desalinization facility could not be commenced because of difficulties in obtaining permits from the local government which often asked for unrealistic requirement to be first fulfilled for the issuance of such permits.

As earlier reported, PT Tripatra Engineering, a subsidiary of PT Indika Energy, in cooperation with Korean company Samsung Engineering Co. Ltd has won a tender to build production facilities worth about $746.3 million at the Cepu block. A consortium of PT Inti Karya Persada Tehnik and PT Kelsri won the tender for the construction of pipeline network worth about$60 million, while PT Hutama Karya and PT Rekayasa Industri will jointly build desalinization facility worth about $95.58 million. (*)