President summons governors of East and Central Java over Cepu dispute

President Susilo Bambang Yudhoyono has summoned the governors of East and Central Java to settle lingering dispute over rights to take part in the development of the Cepu oil block, Koran Tempo reported on Monday.

Teguh Dri Paryono, a senior official of the Central Java's mining office, said in Semarang last week that the governors of the two provinces had been requested to meet the President in Jakarta on Tuesday to discuss their different views on the rights to be involved in the development of the oil block.

Both provinces claims they have the rights to take part in the operatorship of the oil block which occupies territories of both provincial administrations. Some of the oil block is located in Blora, Central Java while the other is located in Bojonegoro, East Java.

Under the latest agreement, ExxonMobil will have 45 percent interest in the oil block, Pertamina another 45 percent. The remaining 10 percent will be allocated to the local government which controls the territory where the block field is located.

Bojonegoro regency claimed that it has the rights to get the 10 percent interest in the Cepu oil field, but the Central Java government said it should share the 10 percent interest because parts of the oil fields in the Cepu oil block are located in one of Central Java's regencies.

Both ExxonMobil and Pertamina are also still disputing the operatorship of the oil block. Both oil giants have insisted that they have the rights to act as the operator of the oil block which is estimated to have oil reserve of about 1.57 billion barrels. (*)