Press Release: ExxonMobil gives testimony to DPR Commission VIII over Cepu block
Wednesday, February 26 2003 - 07:16 AM WIB
The testimony provided by the ExxonMobil executives included an overview of the Cepu TAC, a progress report on MCL's very successful exploration activities and a detailed explanation of the significant benefits to the Government of Indonesia, Pertamina and local governments and communities, that would come from continuation of MCL's rights in the Cepu TAC until 2030.
Leading the ExxonMobil delegation was R. I. Wilson, President and General Manager of ExxonMobil Oil Indonesia Inc. Making the presentation on the Cepu TAC for MCL was Budiono, Vice President of Exploration.
"MCL attended this Commission VIII session at the invitation of the Commission Chairman. We are grateful for the opportunity to discuss the issues related to the Cepu TAC with the Commission VIII members. Through this testimony, MCL clarified some of the outstanding issues about its plan to develop the significant oil and gas resources the company has discovered in the Cepu Block," said Budiono.
"We provided factual information on the Cepu TAC and would like to get Commission support for continuation of MCL's rights to fully develop this project on fair and reasonable terms," he added.
Representatives of ExxonMobil continue to meet with Pertamina and other members of the GOI on a regular basis to resolve outstanding issues related to the Cepu Technical Assistance Contract (TAC). ExxonMobil remains optimistic that negotiations can be successfully concluded and that the substantial financial and economic benefits of this project can be realized by the Government, Pertamina and the people of Indonesia.
Some of the financial and economic benefits from this project include:
? An estimated 600 million barrels of oil and significant volumes of gas have been discovered that when developed will provide sizeable revenues.
? If development can begin promptly, it is possible for MCL to begin to produce significant quantities of oil by 2006, up to 180,000 barrels per day, which will help Indonesia from becoming a net oil importer and help Indonesia to fill its production shortfall from OPEC quotas.
? Local governments will participate in a share of the Government's non-tax revenues as a result of the Regional Autonomy Law.
? The multiplier effect will have a positive impact on other parts of the economy. This effect has been observed elsewhere to range from 1.5 to 4 times the size of the investment.
? Production from Cepu will have positive impact on other industries and local communities in Java through increased economic output, more jobs, and community development projects.
? At peak production and assuming the agreement is reached soon, the GOI will receive about US $ 2 million per day, or about US $800 million per year at peak production, and over the life of the contract the GOI will receive about US $7.6 billion.
? Gas will be available from the Cepu TAC Contract area to supply near- and long-term fuel requirements in Java power plants.
"MCL has proposed a win-win solution for the Cepu TAC negotiations that provides tremendous economic benefits to the Republic of Indonesia, accommodates Pertamina's expressed interests and respects MCL's existing contract," said Budiono.
The ExxonMobil family of companies has been part of Indonesia's oil and gas industry for over 100 years. They are committed to participate in the development of Indonesia's considerable natural resources for many years to come.(*)