Govt steps in to settle Cepu block row, again<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The government has decided to once again try to help unlock the
\nstalled negotiations between U.S. oil giant ExxonMobil Corp. and
\nstate-owned oil and gas firm PT Pertamina over who will be in
\ncharge of managing the oil-rich Cepu block.<\/p>\n
A special interministerial negotiating team, which in June
\nmanaged to get both firms and the government to seal a deal for
\ndeveloping the block ending a four-year dispute, has been
\nreactivated to settle the row, said State Minister of State
\nEnterprises Sugiharto on Wednesday.<\/p>\n
\"The previous interministerial team is now tasked with helping
\nPertamina and ExxonMobil to settle the operatorship issue. I may
\nsay this will no longer be a business-to-business settlement,\"
\nSugiharto said.<\/p>\n
Sugiharto said the composition of the team would be the same,
\nexcept for its chairman Martiono -- Pertamina's chief
\ncommissioner -- who has been replaced by Roes Aryawidjaja, a
\nPertamina commissioner and deputy state minister of state
\nenterprises.<\/p>\n
Other members of the team include Pertamina commissioners
\nMuhammad Abduh and Umar Said, Pertamina president director Widya
\nPurnama, Pertamina vice president director Mustiko Saleh, and the
\nMinistry of Finance's director for oil and gas revenue, Sahala
\nLumban Gaol.<\/p>\n
Also on the team are Lin Che Wei, an expert advisor at the
\nOffice of the State Minister for State Enterprises, Mohammad
\nIkhsan, an expert advisor at the Office of the Coordinating
\nMinister for the Economy, and Rizal Mallarangeng, a political
\nanalyst.<\/p>\n
Sugiharto said the team had recently come up with a possible
\nsolution to the deadlock involving Pertamina and ExxonMobil
\nsetting up a joint-venture company to specifically operate the
\nblock based on a 50\/50 arrangement.<\/p>\n
\"There has been progress made by the team. We have come up
\nwith another option aside from the previous one involving
\nalternating turns as operator every five years ... I am
\noptimistic the issue can be settled soon,\" he said.<\/p>\n
The government-sanctioned team managed to get ExxonMobil and
\nPertamina to sign a production sharing contract with the
\ngovernment on Sept. 17 to develop the US$2.6 billion Cepu block,
\nwhich contains estimated reserves of 500 million barrels of crude
\noil.<\/p>\n
At its peak, the block is expected to produce up to 170,000
\nbarrels of oil per day (bpd) -- roughly 17 percent of the
\ncountry's current annual oil output.<\/p>\n
After the deal, optimisms was high that exploration of the
\nblock would begin quickly without the need for government
\nassistance in the negotiations for a joint operating agreement
\n(JOA) between Pertamina and Exxonmobil.<\/p>\n
However, talks over the JOA have become deadlock with each
\nside holding out for principal control of the block.<\/p>\n
Under the memorandum of understanding (MOU) signed in June by
\nthe two companies and the government-sanctioned team, ExxonMobil
\nwould have the right to become the sole operator of the block for
\nthe entire duration of the contract.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-steps-in-to-settle-cepu-block-row-again-1447893297",
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"sponsor": "Okusi Associates",
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