FYI
Pertamina opposes establishment of joint venture with ExxonMobil Saturday, January 14, 2006 - 09:06AM GMT+7 State oil and gas company Pertamina has opposed the government's plan to establish a joint venture with ExxonMobil Indonesia to develop the disputed Cepu oil block in East Java, Bisnis Indonesia reported on Saturday. Pertamina's Vice President said in Jakarta on Friday that the establishment of the joint venture to develop the oil block would not solve the problem because there was no clear indication who would become the operator of the oil block. "It is impossible to develop the oil block through a joint venture if both companies want to become its operator," he added. The government recently signed the new contract for the development of the Cepu oil block with its operators Pertamina and ExxonMobil Indonesia recently after prolonged negotiations. Under the new agreement, Pertamina and ExxonMobil will each have participating interest of 45 percent in the Cepu oil block. The other 10 percent will be allocated to the local government which oversees the territory where the oil block is located. Both oil giants however want to become the operator of the massive oil block. Pertamina later proposed Exxon to take turn on the operatorship for every five years but the proposal is opposed by Exxon, saying it has the rights to act as the sole operator until the end of the 30 year-contract. ExxonMobil formerly operated the Cepu oil block under technical assistance contract with Pertamina. The contract should have ended in 2010 but the oil giant demanded the earlier extension of the contract for the certainty of its investment in the oil field for another 20 years. (*)
