Talks on Cepu TAC still continuing: Official

A government official on Friday dismissed allegations that negotiations between state oil and gas company Pertamina and Exxon Cepu Ltd over the latter?s Technical Assistance Contract in East Java have come to a deadlock.

? Their negotiations deal with a business contract and involve many variables and factors. They have to be extra careful,? Kardaya Warnika, assistant to the minister of energy and mineral resources, told reporters.

Kardaya said talks between the two parties are continuing, focusing on whether Exxon?s TAC contract can be extended after it expires in 2010. That many more time would be have to be spent for concluding their negotiations should not become a big issue, the official said.

He further said Exxon may take part in the tender for the Cepu project to be opened before 2010, due to technical considerations.

?For example, Exxon already has adequate data about the Cepu TAC area,? Kardaya said.

Exxon Cepu, which is a unit of ExxonMobil Oil Indonesia, is expected to start producing around 50,000 barrels of oil per day (bpd) in 2003, and later increase the volume to 200,000 bpd.

The Cepu TAC block has oil reserve of an estimated 250 million barrels, and is also believed to contain gas reserve.

Pertamina insists on a revision over the Cepu TAC, which is obviously a prerequisite for considering extension for the contract. Pertamina demands its working interest in the oil block be increased to 35 percent from the current 10 percent.

ExxonMobil however has thus far declined to fulfill Petamina?s demand. (Leo)