POD for Cepu block approved

Government has approved the development plan for the $2.6 billion Cepu oilfield, allowing work on the OPEC member's biggest untapped discovery to begin after years of delay.

"The development has been approved, we are proceeding with the field development," Pertamina President and CEO Ari Soemarno said Monday. "We hope we can start (producing) late 2008 or early 2009.? he added.

"Peak production will be 150,000-170,000 barrels per day. It will not take too much time to get there, only a year or less, to reach full production," Soemarno said, confirming earlier estimates of the field's potential output.

The approval allows the project to move into the drilling phase, but Soemarno gave no further details

Pertamina had submitted the Cepu plan to oil and gas upstream authority BP Migas on May 5, with approval expected about a month later.

Cepu is Indonesia's largest oil discovery in the past 30 years. Located in East and Central Java, Cepu's five fields hold estimated reserves of 600 mln barrels of oil and 1.7 trln cubic feet of gas.

ExxonMobil has a 45 percent stake in the Cepu field; while Pertamina also owns 45 percent and the remaining 10 percent is held by the local governments overseeing the area where the field is located. (*)