Pertamina airs stance in parliament over Cepu block

State oil and gas firm Pertamina will manage and operate the entire working interest in Cepu oil block in Central Java if U.S. oil and gas company ExxonMobil Indonesia Inc. refuses to pay it US$400 million for 50 percent of the block, Pertamina president director Baihaki Hakim told House members on Thursday.

?If their offer is not interesting, Pertamina will get itself ready to manage and operate the block. This is our corporate stance,? Baihaki said.

ExxonMobil presently holds 100 percent interest in Cepu block, and its contract for the block will expire in 2010. It had asked for a 20-year contract extension.

Pertamina refused to extend the ExxonMobil?s contract, and offered the U.S. company 50 percent of the block. Pertamina demanded US$400 million for the 50-percent interest, which ExxonMobil refused to fulfill. ExxonMobil offered only $40 million.

Exxon said it had discovered oil reserve of 250 million barrels in the 1,670 sq kilometer Cepu block. Meanwhile, state oil and gas research center LEMIGAS put the figure at 450 million barrels. (godang)