The Indonesian government has signed a contract with state firm Pertamina and US oil company ExxonMobil Corp to develop Cepu block, Mines and Energy Ministry officials said.

Jakarta estimates Cepu block on Java island could hold more than 500 million barrels of oil and could boost Indonesia’s production by as much as 180,000 barrel-per-day (bpd) – equivalent to about 19 per cent of the country’s current output.
Mines and Energy Minister Purnomo Yusgiantoro said the production sharing contract will boost Indonesian oil output in the near future. The government has said production from Cepu could begin in 2008.
Steve Greenlee, an ExxonMobil official, said the contract would be for 30 years. But he added the parties involved need to work out further details before they can start developing the block.
Pertamina vice-president Mustiko Saleh reiterated Pertamina and ExxonMobil will each have a 45 per cent participating interest, with the remaining 10 per cent going to the regional government. Under a previous scheme, ExxonMobil was the operator of the block under a technical assistance contract with Pertamina that expires in 2010, and has been negotiating for four years to extend the contract and begin development.
Indonesia intends to become a crude oil exporter again in two to three years, Muhammad Lutfi, the Opec nation’s Investment Coordinating Board chairman said. “We’re going to be a net exporter of oil in the near future, at least in the next two to three years,” Lutfi said.
“We’re excited that at least we’re going to have 15 to 20 per cent growth over the next two to three years in our (oil) production,” said Lutfi.