Ending five years of wrangling, Exxon Mobil appeared yesterday to have reached agreement with Indonesia's state-owned oil company, Pertamina, clearing the last hurdle to developing one of the country's most promising oil deposits.
One of Indonesia’s last undeveloped oil fields is the Cepu block, located in East and Central Java. ExxonMobil’s local subsidiary discovered 250 million barrels of proven oil reserves in the Cepu Contract Area in 2001, and today the company estimates the area could hold up to 600 million barrels of recoverable oil reserves. ExxonMobil hesitated to develop the promising oil resource, however, because the company’s contract for the area was set to expire in 2010. After several years of negotiations, in March 2006 ExxonMobil and PT Pertamina signed a joint operation agreement (JOA) for the Cepu field. Each company will have a 45 percent stake in the project, with the remaining 10 percent held by provincial governments in East and Central Java. The project is scheduled to begin production in 2008, with peak production expected to reach 180,000 bbl/d.
…During 2006, BP Migas concluded its fifth round of acreage offerings in which it awarded dozens of new exploration and production licenses to companies. During the fifth bidding round, a handful of exploration blocks were awarded to international oil majors, such as ExxonMobil and ConocoPhillips, although the majority of tenders were won by smaller Indonesian firm