ExxonMobil sets target for Cepu oil block

JAKARTA (JP): U.S.-based ExxonMobil Oil Indonesia Corp. hopes to produce up to 100,000 barrels per day (bpd) from the Cepu oil block in Central Java and East Java.

"The production rate will be around 100,000 bpd by the year 2004," a company official said on Tuesday.

Last week, ExxonMobil announced that its subsidiary Mobil Cepu Limited had discovered new oil reserves at the Cepu technical assistance contract (TAC) block. The reserves are believed to amount to about 250 million barrels of oil.

Although other officials at ExxonMobil declined to comment on Cepu's estimated production rate, the company's website confirmed the official's statement.

However, while the website said Cepu would reach a production rate of 100,000 bpd by 2003, the source said this rate of production would be reached by 2004.

ExxonMobil's vice president of production, Lance Johnson, also said initial production at the oil block could begin as early as 2003.

"That will be ahead of a full field development program, but we will try to get some early production on a more limited basis by the year 2003," he said.

At present, drilling at Cepu has been completed only on the Banyu Urip number three well, which is one of eight wells in the block.

State oil and gas company Pertamina has said it has agreed to accept a 10 percent stake in the project.

"It will be a 10 percent participating interest. That is the basis of negotiations between Exxon and Pertamina," Johnson said.

He said ExxonMobil and Pertamina were still discussing the value of the 10 percent stake. Johnson declined to say when the two companies would come to an agreement, only saying they would proceed as quickly as possible.

The Cepu block, which covers 1,670 square kilometers, was owned by Pertamina before it was transferred to Humpuss Patragas in 1990 under the TAC scheme. Humpuss Patragas was, at the time of the transfer, controlled by former president Soeharto's youngest son Hutomo Mandala Putra. Humpuss later sold 49 percent of the block to Australian firm Ampolex Pty Ltd., which is a unit of ExxonMobil.

ExxonMobil bought out Humpuss's remaining 51 percent share in 1999, following pressure from the government for Soeharto's family and associates to no longer take a role in Pertamina's businesses.

Separately, the vice president for exploration and production at Malaysian oil and gas company Petronas, Dato' Mohamad Idris Mansor, said his company was looking at 23 new oil blocks in Indonesia that were recently opened for bidding.

"We're looking at the new blocks offered by the government and I think we will make a lot of studies, and if it looks positive than we will bid for the blocks," Mansor said.

He declined to say which block were of particular interest to Petronas.

Last month, the government opened the tender for 23 new oil blocks, including deep-sea blocks in the potentially oil-rich Makassar Straits. (bkm)