C. Java, E. Java set up a consortium for Cepu block<\/p>\n
ID Nugroho and Suherdjoko, The Jakarta Post, Surabaya\/Semarang<\/p>\n
The East Java administration will get a bigger share in
\nparticipating interest compared to neighbor Central Java from the
\nuntapped Cepu block, as a result of a meeting between the
\ngovernors of the two provinces presided over by the President.<\/p>\n
East Java Governor Imam Utomo said in capital Surabaya that
\nthe province would get 6.7 percent of the total 10 percent
\nallocated for regional administrations while Central Java would
\nget the rest.<\/p>\n
The meeting held late on Tuesday was also attended by Central
\nJava Governor Mardiyanto, President Susilo Bambang Yudhoyono,
\nCabinet Secretary Sudi Silalahi and Minister of Energy and
\nMineral Resources Purnomo Yusgiantoro.<\/p>\n
The President expressed hope in the meeting that the block,
\nlocated on the border of the two provinces, would be productive
\nin 2008.<\/p>\n
\"The President emphasized that any policies made on the Cepu
\nblock should be for the benefit and welfare of the people,\"
\nMardiyanto said separately in Semarang, Central Java.<\/p>\n
Sudi said the details would be discussed further based on
\nArticle 34 of Law No. 35 on oil and gas.<\/p>\n
\"The government will issue a presidential regulation to
\nstipulate the details of the split,\" he said.<\/p>\n
Both Central Java and East Java administrations have also
\nagreed to set up a consortium to handle the 10 percent revenue of
\ntheir interest participation in Cepu block and the sharing
\ncapital.<\/p>\n
Under the memorandum of understanding (MOU) signed in June,
\nstakeholders -- Pertamina, Exxon and regency administrations --
\nwill get 15 percent of all output and the government 85 percent
\nif oil prices average over US$45 in a year. If the price of oil
\nfalls below $35 it will be a 30-70 split.<\/p>\n
Both Pertamina and Exxon also agreed on a participating
\ninterest of 50 percent in the Cepu block, with 5 percent
\nallocated to each of the relevant local administrations.<\/p>\n
Part of the Cepu block is in Blora regency, Central Java, with
\n895 million barrels of oil reserves while another part is in
\nBojonegoro regency, East Java, with over 1.5 billion barrels of
\nreserves.<\/p>\n
Cepu is expected to produce 170,000 barrels of crude oil per
\nday when it reaches peak production, about 18 percent of current
\noutput nationwide.<\/p>\n
Bojonegoro had demanded that the government not split the
\nrevenue with other regencies, as most of Cepu block lies in this
\narea.<\/p>\n
Mardiyanto said both provinces' administrations as well as the
\nadministrations of Bojonegoro and Blora had agreed to provide
\nsharing capital of Rp 2.5 trillion (US$255.10 million), mainly
\ndue to their limited regional budgets.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/c-java-e-java-set-up-a-consortium-for-cepu-block-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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