Bahlil Begins Talks on ExxonMobil's Cepu Block Contract Extension

Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia has announced that the government has begun discussions on extending the management contract for the Cepu Block, currently operated by ExxonMobil Cepu Ltd.

In essence, the government is seeking a cooperation scheme that provides balanced benefits for both the state and the production sharing contract (PSC) contractor. “We are discussing the extension of Exxon’s contract. I have asked Mr. Joko (SKK Migas Head Djoko Siswanto) and Mr. Wade (ExxonMobil Indonesia President Wade Floyd) to find a win-win solution, but do not ask for too high a share,” Bahlil said during the CNBC Indonesia Energy Forum in Jakarta on Thursday.

The Cepu Block’s PSC is set to expire in 2035. ExxonMobil Cepu Ltd currently holds a 45 percent participating interest, while PT Pertamina also holds 45 percent. The remaining 10 percent is held by regional government-owned enterprises (BUMD) representing the three regencies of Blora, Bojonegoro, and Tuban, along with the provincial governments of Central Java and East Java.

The contract extension is considered vital for unlocking significant new investment to support the development of oil and gas fields in the Cepu Block working area. Currently, approximately 95 percent of revenue from the block’s production goes to Indonesia under the existing production sharing scheme. ExxonMobil, as the operator, has proposed an increased share for the consortium to provide funding room for further investment and the application of new technology.