Pertamina sticks to its gun on Cepu

State oil and gas company PT. Pertamina is sticking to its gun not to extend contract of Cepu giant oil block when it expires in 2010, the company?s top official said Thursday.

?ExxonMobil can operate Cepu block until 2010, but beyond that Pertamina will not extend the contract and we will either develop the block by alone or with partnership with third pary,? said Pertamina president Widya Purnama after a meeting with top officials of ExxonMObil Oil Indonesia.

ExxonMobil is trying to lobby Pertamina to revive talks to jointly develop Cepu block, after the latter formally stated that it had decided to drop joint venture negotiation.

?However, said Widya, Pertamina is still open if ExxonMObil wanted to come in a joint venture to develop the block when the blocks was returened to Pertamina in 2010. ?Any third party can propose joint venture with Pertamina (to manage the block) as long as the partnership gives benefit to Indonesia and to Pertamina,? he said.

Pertamina had unilaterally decided not to extend Cepu TAC block contract when it expired in 2010 and cancelled joint venture plan between both companies to develop the block, which is believed to contain 600 million barrels of recoverable oil.

The technical assistance contract held by ExxonMobil to operate the Cepu oil field will terminate in 2010. But the oil giant demanded an earlier extension of the contract for another 20 years for the certainty of its investment in the oil field. ExxonMobil thus far had invested some US$450 on Cepu block.

Reports in local media said that companies several international companies such as PetroChina had been lobbying Pertamina get their shares of interest in the block.(godang)