Talks continue for Cepu block production start date

ExxonMobil and PT Pertamina are involved in discussions with government authorities aimed at resolving their differences and advancing the start of oil production from Indonesia's Cepu block.

May 16th, 2007

Eric Watkins
Senior Correspondent

LOS ANGELES, May 16 -- ExxonMobil Corp. and Indonesia's state-owned PT Pertamina are involved in discussions with government authorities aimed at resolving their differences and advancing the start of oil production from Indonesia's Cepu block.

Peter J. Coleman, president and general manager of ExxonMobil Oil Indonesia Inc., said the two firms are seeking a way to meet the government's request to begin oil production at the block by yearend 2008, 2 years ahead of schedule.

Coleman said the two sides are in discussions with BPMigas, the country's upstream oil and gas regulatory agency, as well as Lemigas, the government's oil and gas research and development center, in order to meet the government's target.

Indonesia wants to increase the country's oil production by 30% to 1.3 million b/d by 2009 from the current 1 million b/d. To meet that goal, the government has urged the Cepu partners to speed up operations.

Coleman, who said he understands the aim of boosting production, also suggested that the government should assess if earlier production is economically viable given the technical and social problems now facing the two companies.

In January, ExxonMobil officially advised Indonesia of its desire for a 10-month delay for oil production from Cepu in Central Java from its initial target of first quarter 2009 (OGJ Online, Jan. 30, 2007).

Indonesian officials had said earlier that month that Cepu block in the border area of Central and East Java would start producing oil in first quarter 2009, one quarter later than originally scheduled (OGJ Online, Jan 4, 2007).

Contact Eric Watkins at hippalus@yahoo.com.

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