National

President Yudhoyono Allocates 10 Percent of Cepu Block to Regions
Thursday, 22 December, 2005 | 12:20 WIB

TEMPO Interactive, Jakarta:Indonesian President Susilo Bambang Yudhoyono has allocated a 10 percent in the management of Cepu block tot eh regions: a 6.5 percent share to the East Java provincial government and a 3.5 percent share to the Central Java provincial government.

Pertamina spokesperson Muchamad Harun said that President Yudhoyono has made this decision regarding the allocation of these shares.

“We received information yesterday that the President had already decided to divide the shares division this way,” stated Harun on Wednesday (21/12).

Pertamina’s Assistant Managing Director Muspiko Saleh confirmed that the decision had been made.

According to Harun, settlement of the 10 percent share has been handed over to the President.

Pertamina, the state oil & gas company was not involved.
The negotiations between Pertamina and Exxon Mobil Oil are not yet settled.

“This is because Exxon still wants to be the operator,” stated Harun.

Pertamina wants to be operator because it will then be able to determine the production costs that are spent and which have be reimbursed by the state.

There are suspicions that Exxon wants to be operator in order to defraud cost recovery.

“The development cost of one exploration well by Exxon can reach US$12 million, whereas, with Pertamina it only costs US$4 million,” stated Harun.

Exxon Public Affair Vice President Maman Budiman denied that each well costs US$12 million.

“Each well will cost around US$4 million. US$12 million would be for a particular well where complete data was required,” stated Budiman.
(Muhammad Fasabeni-Tempo News Room)