Yesterday, ExxonMobil spokesperson Maman Budiman released a statement confirming ongoing negotiations between the two parties had been completed and a new entity, Mobil Cepu, had now been created to operate the block, according to Reuters.
Under the new arrangement, Pertamina and Exxon will form a joint organisation that will operate the Cepu concession.
An Exxon executive will act as the organisation's general manager, while a Pertamina executive will be its deputy general manager, according to Indonesian officials, said a Dow Jones report.
Pertamina and Exxon will each hold a 45% interest in the Cepu field, while the other 10% will be held by the local governments.
The new joint operating agreement is set to be signed in Jakarta tomorrow.
A production-sharing agreement was signed in September last year but the two parties have been in dispute about who should operate Cepu, off the Java coast, with an initial proposal suggesting alternating every five years.
Ari Soemarno, who took over as Pertamina president director after a management reshuffle last week, confirmed the decision at a press conference in Jakarta yesterday.
An ExxonMobil spokesperson told Reuters production would commence at Cepu in just over two years at an initial rate of 25,000 barrels per day with start-up costs expected to be around $2.6 billion. Ultimate production is expected to be around 180,000bpd while Cepu has previously been estimated to contain around 600 million bbls.
Cepu is on the border of Central and East Java provinces.
