Pertamina, Exxon in Dispute Over Oil Field Operating

The Indonesian government may take over a dispute between the state oil firm Pertamiona and U.S. oil company Exxon Mobil on Tuesday, if the two companies cannot reach an agreement on the operatorship on the 2 billion dollar Cepu oil field in East Java province, a minister said here Monday.

"If until Tuesday, Pertamina and Exxon Mobil can not settle the case, so in accordance with the advise of president and vice president, I and the minister of Mines and Mineral Resources will intervene," State Minister for State Enterprises Sugiarto told reporters here.

Minister Sugiharto said that until Monday the two companies have not reached an agreement on the operatorship of the block, which is to begin production in 2008.

Pertamina has said that it wants to be the first five years operator of the block, but Exxon rejects the demand.

The block, which is one of the Exxon's 10 biggest undeveloped oil findings, is targeted to produce about 180,000 barrels per dayand can lift 20 percent of the country's current production of 1.05 million barrels per day.

Exxon Mobil and Pertamina have decided to establish a joint committee to decide the operatorship of the block, according to Minister of Energy and Mineral Resources Purnomo Yusgiantoro.