Pertamina has yet to decide extension of Exxon?s contract
Wednesday, June 5 2002 - 03:23 AM WIB
"We ask Pertamina not to rush in extending the contract of Exxon, because the oil field contain a large crude oil reserves," Priyo Budi Santoso, a member of the House?s commission on energy and mineral resources, said during a hearing with Pertamina early this week.
He said that Pertamina is deserved to have a larger stake in the oil field currency operated by ExxonMobil. "It is even better if Pertamina operates the oil field by itself to give larger benefit to the people," he added.
Pertamina?s president director Baihaki Hakim acknowledged during the hearing that ExxonMobil had formally applied for the extension of its contract in the Bojonegoro oil field, which would end in 2010. "Basically we do not oppose the extension of the technical assistance contract of PT ExxonMobil," he added.
He said that it would be unfair if the contract was not extended because ExxonMobil had invested a lot of money in the operation of the oil field.
The Bojonegoro oil field was formerly operated by PT Humpus Patragas, one of companies owned by former president Soeharto?s youngest son Hutomo Mandala Putra (Tommy). Due to financial difficulty, in 2000 the company sold the oil field to Mobil Cepu Ltd, a subsidiary of ExxonMobil. The field is estimated to have oil reserves of about 2 billion barrels.
Pertamina has offered two options to ExxonMobil to allow it to extend the contract. One of the options is to give Pertamina a larger share, while the other option is to give additional cash to Pertamina. The options are being negotiated.
Under the technical assistance contract, the oil production split is 50 percent for the government (through Pertamina) and the other 50 percent for the operator, ExxonMobil. In addition, Pertamina receives 10 percent from the operator?s share.
In the future contract, Pertamina has asked an increase in its share from the operator to 30 percent. (*)