Pertamina expects negotiation with ExxonMobil over E. Java oilfield concluded soon

State oil and gas firm Pertamina expected that negotiation with US giant ExxonMobil over stake at Cepu giant oilfield in East Java would be concluded next month, according to Pertamina?s president Baihaki Hakim.

Pertamina and ExxonMobil had been in talks over the former?s participation in Cepu Technical Assistance Contract (TAC) oilfield where ExxonMobil dicovered at least 250 million barrels of oil reserve. Crude production is expected to commence in 2003 and the peak production would be 100,000 barrels of oil per day.

Pertamina insisted on acquiring 35 percent interest in Cepu while ExxonMobil was offering 15 percent. Baihaki did not disclose how far the two companies had narrowed the gap.

Baihaki went on to say that one of the major differences between the two parties was that ExxonMobil had asked for early contract renewal for Cepu block, which would expire in 2010, while Pertamina had yet approved the request.

He also said Pertamina had yet approved Cepu?s plan of development (POD) because ExxonMobil link the POD with contract extension.

Earlier Baihaki said that there was indication that ExxonMobil wanted to drain Cepu?s crude in only five year?s time. He said that this indication could be seen from the working method proposed to Pertamina: using a secondary treatment system to extract oil.

?Why would they have to propose for the use of secondary treatment system while normal operation could allow the company to get oil?? said Baihaki.(alex/godang)