Pertamina, ExxonMobil officials to hold talks over Cepu block next week
Saturday, May 3 2003 - 02:49 AM WIB
Baihaki said their talks with the ExxonMobil officials would focus on two proposals from Pertamina and three from the American company. He refused to provide the details, however.
?What is clear is that Pertamina and Exxon will negotiate all those proposals,? Baihaki told reporters.
Baihaki earlier said negotiation over the block?s contract extension had been progressing significantly. Industry sources said Pertamina and ExxonMobil had in principle agreed on 50:50 joint venture as compensation of 20 years contract extension. The main stumbling block for negotiation, said the sources, is the US$ 400 million cash bonus Pertamina asked for extending the block?s contract. Thus far, ExxonMobil was reportedly willing to pay only US$ 45 million.
ExxonMobil and Pertamina had been in negotiation for years over the former?s proposal to extend Cepu technical assistance contract (TAC), where ExxonMobil had discovered crude reserves in excess of 250 million barrels and significant volume of natural gas.
Under the TAC, ExxonMobil is allowed to operate Cepu oil block, which is owned by Pertamina. The contract of Cepu block will end in 2010.
Initially, ExxonMobil planned to start producing oil in Cepu Block this year, at around 150,000 barrels a day. But, the company later asked Pertamina to extend its contract, arguing that without contract extension it would not be able to recover its massive investment.
Pertamina insisted that the Cepu contract could be extended only if ExxonMobil give it extra cash of US$400 million as compensation for 50 percent interest in the Cepu block. (godang)