Susilo gives green light to ExxonMobil

President Susilo Bambang Yudhoyono has indicated in Washington that ExxonMobil?s contract to operate Cepu oil and gas block in Bojonegoro, East Java, would be extended, the Koran Tempo newspaper reported in its Saturday edition.

?We have already worked with ExxonMobil and the negotiations are continuing. Once there was a deadlock but I revived it,? Susilo said during a press conference in Washington.

He also emphasized that the outcome of the negotiations must be beneficial to Indonesia, for both Pertamina and the government.

?From the negotiations, there are signs that certain points, which according to Indonesia are fair, are emerging," Susilo said.

According to an estimate, Cepu block has 2 billion barrels of oil reserves and 11 trillion cubic feet gas reserves.

Thanks to Cepu?s potentials, ExxonMobil has sought for the extension of its contract, which will expiry in 2010, for 20 years. But ExxonMobil faced strong opposition from the House of Representatives, who propose Pertamina operate the oil field itself.

President mentioned that Indonsia needed to increase its oil and gas output to maintain its status as an oil and gas exporting country.

Susilo said Indonesia preferred ExxonMobil operating the r Cepu block given its management and technology.

If there is a new investor, there will be no guarantee that Cepu will start operating in 2010. On the contrary, if the he negotiations are smooth, it is expected that Cepu wil begin its operations by 2007 and increase Indonesia?s oil production, according to Susilo. (*)