Pertamina, Exxon Mobil end years of row over Cepu block

US oil giant Exxon Mobil Corp. and state oil and gas company Pertamina will announce that they have reached final agreement on giant Cepu block on Monday (today).

?Yes, ExxonMobil and Pertamina have reached settlement on Cepu block operations,? ExxonMobil Oil Indonesia (EMOI) spokesperson Deva Rachman over phone interview. She declined to give detail, but another EMOI senior official Maman Budiman that the block?s top position will be given to Exxon Mobil. The top position in the block would mean that Exxon Mobil would become the operator of the giant block.

Pertamina president Ari Soemarno confirmed on Monday that the company had reached agreement with Exxon Mobil but declined to give detail. ?Pertamina and Exxon Mobil had concluded joint operations agreement (JOA),? he said.

A source familiar with the situation said that the JOA will be signed on Wednesday, paving the way for speedy construction of the block, which has recoverable oil resrebes of more than 250 million barrels and would produce 180,000 BPD when fully onstream in 2008.

ExxonMobil has a 45 percent stake in the Cepu field; while Pertamina also owns 45 percent and the remaining 10 percent is held by the local governments overseeing the area where the field is located.

The two sides signed a production-sharing agreement last September but the block's much-needed development has stalled over who should operate it (alex/godang)