Pertamina-ExxonMobil still divided over Cepu ownership

State-owned oil and company Pertamina and ExxonMobil have not yet reached agreement on three main issues in the development of Cepu oil block in Central Java.

Pertamina?s director for upstream operation Iin Arifin Takhyan said Monday in Jakarta that Pertamina?s demand to have a 35 percent interest in the oil block, for example, had not been approved.

?The amendment of the contract related to the operation of the oil block has not been settled also,? he said, adding that basically Pertamina wanted to maintain the existing technical agreement contract (TAC) but the government and ExxonMobil wanted to change it into a production-sharing contract.

Pertamina?s president Baihaki Hakim said recently that he had discussed the possible change in the contract with ExxonMobil, which operates the Cepu oil block through its subsidiary Ampolex (Cepu) Pty Ltd.

According to Baihaki, under the TAC contract, Pertamina will receive only 70 percent from the oil production. If the contract is converted into PSC, Pertamina will be able to get at least 85 percent from the oil production is reported to have reached billions of barrels.

The Cepu oil field is operated by ExxonMobil Indonesia through its subsidiary Ampolex (Cepu) Pty. Ltd under a technical assistance contract.

The oil field was formerly operated by a joint venture between Exxon (49 percent) and Humpus Patragas (51 percent).

Humpus Patragas was a joint venture between Pertamina and Humpus, which is controlled by former president Soeharto?s youngest son Hutomo Mandala Putera or Tommy.

Ampolex as the operator of the oil block later bought Humpus?s stake in the oil joint venture making ExxonMobil as the majority shareholder of the oil block. The company recently announced massive oil finding in the oil block, which will make it one of the country?s largest oil block.(Godang)