ExxonMobil insists on holding Cepu operatorship<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
U.S. oil giant ExxonMobil Corp. has vowed to fight for the
\noperatorship of the oil-rich Cepu block following a recent move
\nby the government to revive the negotiating team to end the
\ncontinuing tug-of-war between the company and state oil firm
\nPertamina.<\/p>\n
ExxonMobil Oil Indonesia Inc. president director Peter J.
\nColeman told reporters here on Sunday that his company would
\ncontinue to stick to the memorandum of understanding (MOU) signed
\nin June by the two companies and the government-sanctioned
\nnegotiating team that granted ExxonMobil the right to be the sole
\noperator of the block for the entire duration of the contract.<\/p>\n
\"ExxonMobil will continue to hold out that position (as sole
\noperator),\" Coleman said. \"Let's go back to that (MOU), that's
\nthe basis, and we are ready to move forward.\"<\/p>\n
\"We are committed to continuing to negotiate; we are committed
\nto trying to understand that Pertamina has concerns with the
\nproposal we have put forward.\"<\/p>\n
Based on the proposal, which ExxonMobil considered to be
\nconsistent with the MOU, Pertamina and ExxonMobil would be
\nequally represented in a supervisory body to Mobil Cepu Ltd.
\n(MCL), which ExxonMobil established to build and operate Cepu.<\/p>\n
The supervisory body would oversee MCL and have authority in
\napproving budgets and major expenditures.<\/p>\n
Pertamina, however, was apparently unhappy with this proposal,
\nand wants a larger role in the operational side.<\/p>\n
Responding to Pertamina's concerns, ExxonMobil, according to
\nColeman, offered Pertamina some senior positions in MCL,
\nincluding as deputy manager of the development process, who would
\nbe the second-in-charge of the operation.<\/p>\n
Pertamina was again unhappy, and even demanded that it be
\ngiven operatorship status. Pertamina had also said that
\nExxonMobil could no longer demand sole operatorship as the MOU
\nhad expired, arguing that it was valid only for 90 days from the
\nday of signing.<\/p>\n
But ExxonMobil maintains that the MOU was still valid, noting
\nthat the 90-day stipulation was for Pertamina to report to an
\ninter-departmental steering committee which oversees Pertamina in
\nthe negotiation. Exxon does not report to the steering committee.<\/p>\n
To break through the new stalemate, the government has decided
\nto revive the special inter-ministerial negotiating team, which
\nin June managed to get both firms to sign an MOU to develop the
\nblock, ending a four-year dispute.<\/p>\n
The team also managed to get the two companies to sign a
\nproduction sharing contract with the government on Sept. 17 to
\ndevelop the US$2.6 billion Cepu block, which contains estimated
\nreserves of 500 million barrels of crude oil.<\/p>\n
This time, according to State Minister of State Enterprise
\nSugiharto said, the team would settle the operatorship issue.<\/p>\n
One possibility in settling the dispute, according to
\nSugiharto, would be to establish a joint venture company to build
\nand operate Cepu, but this idea was rejected by ExxonMobil.<\/p>\n
Coleman argued that establishing such a joint-venture company
\nwould just \"delay the project\" as it would take longer to get the
\nlegal work done as well as to recruit new employees.<\/p>\n
More importantly, Coleman said, \"It's a matter of
\naccountability. We feel that if there is one company, that
\ncompany will be accountable for the results. When that company is
\nExxonMobil, ExxonMobil worldwide will be accountable for those
\nresults. We will bring in all resources from around the world,
\ni.e. technology and people, to make sure that the company
\ndelivers.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/exxonmobil-insists-on-holding-cepu-operatorship-1447899208",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}