ExxonMobil & Pertamina Moving Forward on Cepu Talks

Pertamina and ExxonMobil have made significant progress in talks about the revenue sharing for the Cepu block in Central Java. Discussions have been ongoing since 2001. Earlier this year President Megawati Sukarnoputri ordered Pertamina to seek better terms and conditions. ExxonMobil has estimated the block's Banyu Urip well holds oil reserves of more than 250 million barrels while Indonesia's energy ministry estimates reserves at around 500 million barrels.

"Among others, we have agreed on an economic model to develop Cepu with ExxonMobil. So we have no need to argue on the investment schedule and production in the future," Pertamina President Director Baihaki Hakim told reporters, describing the agreement as "significant".

"We will talk further with Exxon and we expect to have a win-win solution this year so we can develop Cepu as soon as possible," he added.

The Cepu block is currently under what is known as a technical assistance contract between the two firms. Pertamina announced last October that the contract would not be extended after it expires in 2010.