Pertamina: "Exxon has gone too far in its activities in Cepu oil block"
Friday, February 14 2003 - 03:28 AM WIB
Pertamina?s director for downstream operation Iin Takhyan said in Jakarta on Thursday that Exxon Mobil which acted only as a technical assistance provider had no rights to carry out exploration activities in new oil fields.
"The task of the company is only to help boost production in existing wells," he was quoted as saying by the newspaper. If the company carried out exploration activities to find new oil fields, it would be strange because none of the existing companies that provide technical assistance carried out such activities, he added.
Exxon Mobil?s spokesman Deva Rachman denied that the company had acted over the limit. "All our activities related to Cepu oil field had been reported to Pertamina," he added.
ExxonMobil has proposed the government to extend the contract to operate the Cepu oil field, which would end in 2010 for another 20 years because it feels that without the extension, the company would face difficulty to recover its massive investment.
Some government officials have, however, opposed the extension proposal and prefer to transfer the operation of the oil field to local companies or Pertamina.
Pertamina has also said that it would reject the extension of the contract unless the company is given extra cash as the compensation for the 50 percent of the interest in the Cepu oil field, which was formerly owned by former president Soeharto?s youngest son Hutomo Mandala Putra alias Tommy
ExxonMobil Indonesia has reportedly offered US$40 million for the compensation of Pertamina?s 50 percent interest in Cepu oil field, or only 10 percent of the US$400 million demanded by the state owned oil and gas company.
The compensation is part of the conditions required by Pertamina for the extension of ExxonMobil?s contract over the 1,670 sq kilometer-oil concession which is located in Cepu, Central Java. (*)