Government hopes to end Cepu row<\/p>\n
Rendi A. Witular, The Jakarta Post\/Jakarta<\/p>\n
The government hopes to soon resolve a serious contract row over
\nthe Cepu oil block in Central Java between state oil and gas firm
\nPT Pertamina and U.S. oil giant ExxonMobil.<\/p>\n
Coordinating Minister for the Economy Aburizal Bakrie said on
\nFriday at the State Palace that there was \"progress in the
\nnegotiations\" with the government offering ExxonMobil less than a
\n15 percent stake in the contractor allocation split.<\/p>\n
The government will have an 85 percent stake in developing the
\nproject, with the remaining 15 percent allocated for the field
\ncontractor, in this case Pertamina and ExxonMobil.<\/p>\n
At present, ExxonMobil and Pertamina are still negotiating
\ntheir split of the 15 percent allocation.<\/p>\n
\"We expect to wrap up the negotiation soon. The government
\nremains firm on its stance to offer ExxonMobil a lesser share
\nthan the usual, that is, less than 15 percent,\" Aburizal said.<\/p>\n
The minister made the remark after accompanying the
\ngovernment's negotiating team to report the progress on the
\ndispute settlement to President Susilo Bambang Yudhoyono.<\/p>\n
He said Susilo agreed that the negotiation should continue and
\nthat it should immediately produce results, since the country has
\na shortage in investment in the oil and gas sector.<\/p>\n
\"The President suggested that the team seek the best solution
\nfor the dispute,\" he added.<\/p>\n
Meanwhile, the negotiating team head Martiono said one of the
\nmain stumbling blocks in the negotiation was the percentage share
\nfor ExxonMobil from the 15 percent allocation for the contractor.<\/p>\n
\"There are 11 items that have still not been agreed upon.
\nHowever, the most daunting task of all is the split. If this is
\nsettled then the remaining items will be easier,\" he said.<\/p>\n
Pertamina and House of Representatives Commission VII for
\nenergy and mining agreed on Wednesday to oppose any outcome
\nresulting from the negotiation, pointing to the questionable
\nestablishment of the negotiating team.<\/p>\n
A day later, Vice President Jusuf Kalla told legislators not
\nto interfere in the government's domain, insisting that talks
\nover the dispute would go on for the sake of the people's
\nwelfare.<\/p>\n
The Cepu block -- which is located on the border of Central
\nJava and East Java and owned by Pertamina but operated by
\nExxonMobil Indonesia under a technical assistance contract -- has
\nvast oil reserves.<\/p>\n
However, ExxonMobil has stalled the development of the Cepu
\nblock since 2001 to seek an extension to its contract which is
\nset to expire in 2010, as well as a greater share in the block.<\/p>\n
The block is estimated to have two billion barrels of
\npotential oil reserves and 11 trillion cubic feet of potential
\ngas reserves, which is expected to increase Indonesia's oil
\noutput by 18 percent. Output has been declining over the last
\nfive years.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-hopes-to-end-cepu-row-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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