Pertamina needs $600 million to develop Cepu oil field

State owned oil company Pertamina will need cash of about US$660 million or about Rp 6.5 trillion to develop the Cepu oil field if it decides to take over the operation of the oil field from ExxonMobil Oil Indonesia after the latter?s contract ends in 2010, according to a study released by the government-owned oil and gas research center LEMIGAS, as reported by Republika daily on Monday.

According to the study, Pertamina would need to invest about US$35 million during the first year and the investment would swell to US$254 million in the second year.

In the third year Pertamina should invest another US$257 million and in 2014 or the fourth year, the company should pour another US$114 million. The total investment would reach US$660 million before the company is able to meet the production target of about 150,000 barrels per day. During the 20 year-contract Pertamina will receive revenue of about US$2.361 billion.

ExxonMobil Indonesia, which takes over the oil block from a company owned by former president Soeharto?s youngest son Hutomo Mandala Putra alias Tomy several years ago is proposing for the extension of the contract which will end in 2010 for another 20 years.

Although Pertamina said that it would be more profitable for the government if ExxonMobil continued the operation, many experts and government?s top officials opposed the extension of the contract.

According to a study made by ExxonMobil, the oil reserves in the oil field could reach 2.2 billion barrels although of the total only about 735 million barrels could be pumped out. The gas deposits reach 11.76 trillion cubic feet and about 5.92 TCF of the total could be commercially produced. (*)