Pertamina, ExxonMobil to sign JV agreement on Cepu Block next January: Ariffi

State oil and gas firm Pertamina expects that it will sign with ExxonMobil Corporation next January a joint venture agreement on Cepu giant oil field in Central/East Java, Pertamina president director Ariffi Nawawi said Friday.

?Discussions between the two parties are progressing,? Ariffi told reporters.

Pertamina said earlier that the joint venture agreement could be signed by end-2003 and that the development of the Cepu block could start in December of this year.

Pertamina and ExxonMobil had in principle agreed to operate the block on a 50:50 basis.

The block is located in an area covering parts of Central Java and East Java.

ExxonMobil, through Mobil Cepu Inc. Ltd, operates the block under a technical assistance contract. The contract will expire in 2010.

ExxonMobil had struggled to extend its Cepu contract for another 20 years, while Pertamina had kept asking it for cash compensation and a 50-percent interest in the concession area.

Cepu has potential reserves of two billion barrels of oil and 11 trillion cubic feet of natural gas. (godang)