Pertamina plans $500 million investment in Cepu Block

Indonesia's state-owned PT Pertamina plans to spend $500 million in 2009 on the Cepu Block in East Java, a project to be jointly run by ExxonMobil Corp.

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Sept. 23 -- Indonesia's state-owned PT Pertamina plans to spend $500 million in 2009 on the Cepu Block in East Java, a project to be jointly run by ExxonMobil Corp.

Pertamina finance director Frederick Siahaan said the firm will use its own revenues to fund the project due to what he called "unfavorable market conditions these days."

Siahaan's announcement marks a reversal in Pertamina's plans to secure loans of up to $1 billion from foreign institutions to finance the project, estimated to cost some $2 billion.

Pertamina and ExxonMobil are 50:50 partners in the project. The Cepu Block is estimated to hold some 600 million bbl of oil along with 1.7 tcf of natural gas.

Earlier in September, an ExxonMobil representative told Indonesia's parliament that the firm would start producing some 20,000 b/d from Cepu field next year (OGJ Online, Sept. 9, 2008).

Contact Eric Watkins at hippalus@yahoo.com.

More in Drilling & Production