Pertamina asked to provide enough funds for Cepu block development

The government as the shareholder of PT Pertamina has asked the state owned oil and gas company to provide enough funds to finance the development of the disputed Cepu oil block, Kompas reported on Friday.

The call was made during the deliberation of Pertamina's annual budget in Jakarta on Thursday, which was attended by all Pertamina's senior officials and the representatives of the government as the single shareholder of the company.

"Pertamina should not only provide the funding for just one or two years, but for the long-term development program of the oil block. The financial problem should not be allowed to affect the ongoing projects," the deputy of the state minister for state owned enterprises, Roes Aryawijaya told reporters following the meeting.

He said that Pertamina should be able to provide funds of between US$50 million and US$100 million during the first year of the oil block development. In addition to this amount, Pertamina should also be ready to provide another funds for the following stages of the development of the oil block, he added.

Under the existing agreement, Pertamina and ExxonMobil would jointly operate the oil block with participating interest of 45 percent each. The other 10 percent are given to local governments. The two companies should provide about Rp 11.25 trillion each to finance the exploration and production activities which are estimated to cost about Rp 25 trillion. The other Rp 2.5 trillion of the total funding should be provided by East Java and Central governments.(*)