Pertamina soon reach deal to raise $1b for Cepu project

State owned oil and gas company PT Pertamina said on Friday it was close to deal to raise US$1 billion to finance the development of Cepu oil field in Central and East Java.

"I am optimistic the deal could reached in late September or early October. The financing will be provided by local and foreign banks," company's financial director Frederick Siahaan said, but refused to name the banks.

He said the $1 billion amount was the portion of investment required from Pertamina to develop the huge oil field together with its equal partner American oil and gas giant ExxonMobil Corp.

Earlier, Frederick said both firms had appointed BNP Paribas as advisor to raise financing to develop the oil field.

Pertamina and ExxonMobil have each 45 percent stake in the field, with the remaining shares owned by the local govenrments. The field is expected to start production in 2009 with initial production of 10,000 BPD. Peak production of 165,000 BPD would be achieved in 2-3 years after first production. (Bernard)