ExxonMobil, Indonesia's Pertamina sell 10 pct of Cepu Block to local governments

CNNMoney, February 22, 2008: 06:11 AM EST

JAKARTA, Feb. 22, 2008 (Thomson Financial delivered by Newstex) -- ExxonMobil (NYSE:XOM) Corp and Indonesia's state-owned oil and gas company PT Pertamina on Friday agreed to sell a combined 10 percent interest in the country's largest oil project, Cepu Block, to four local government-owned companies.

Exxon's stake in the block, held by its units Mobil Cepu Ltd and Ampolex Pte Ltd, has been reduced to 45 percent from 50 percent. Likewise, Pertamina's stake, held by its unit Pertamina EP, has been cut to 45 percent from 50 percent.

Mobil Cepu and Pertamina EP are the joint operators of the block.

The four companies are PT Sarana Patra Hulu Cepu owned by the Central Java provincial government, PT Asri Dharma Sejahtera owned by Bojonegoro Regency, PT Blora Patragas Hulu owned by Blora Regency and PT Pegro Gas Jatim Utama Cendana owned by the East Java provincial government.

Cepu, located in east and central Java, has estimated reserves of 600 million barrels of oil and 1.7 trillion cubic feet of gas.

Oil production from the field is expected to rise to an average of 160,000 barrels of oil per day, or nearly 16 percent of Indonesia's current nationwide output, in two to three years from an initial production of 10,000 barrels of oil per day.

The block is expected to begin production at the end of this year.

(1 US dollar = 9,169 rupiah)

roffie.kurniawan@thomson.com