Pertamina says deal with ExxonMobil over Cepu block ?near?

State oil and gas company pertamina said negotiation with US oil giant ExxonMobil Inc. over Cepu giant oil, gas block had progressed ?significantly? hoped deal could be clinched within the next few months.

?Both parties had more understanding on each others? position and there are signs that negotiation could be settled within months,? said Pertamina president Baihaki Hakim Thursday. Baihaki, however, refused to go into specifics.

Industry sources said basically. Pertamina and ExxonMobil had agreed on 50:50 partnership on the block. One of the major stumbling blocks was Pertamina asked US$ 400 million as cash bonus while ExxonMobil was only willing to settle for much less.

ExxonMobil discovered oil reserves of around 600 million barrels and around 6 TCF of gas in Cepu block, which belongs to Pertamina. ExxonMobil had been asking to extend the block?s contract for another 20 years after the contract expires in 2010 to enable it to economically exploit the block.

Another source said Pertamina is trying to settle down negotiation with ExxonMobil before Pertamina company status would be changed to limited liability and would fall under the jurisdiction of ministry of state owned enterprises.

?President Megawati had authorized Pertamina to carry on negotiation independently. Pertamina fears situation might changed when it would fall under jurisdiction of ministry of state owned enterprises,? said the source. Pertamina is scheduled to change into limited liability company in April this year. (godang)