US energy ExxonMobil Corp. may accept the revenue sharing scheme proposed by the Indonesian government and end its prolonged row with state oil and gas firm PT Pertamina in developing the oil-rich Cepu block in Central Java province, Vice President Jusuf Kalla has said.

Kalla said that the government may agree to pay ExxonMobil 13.5 percent of the revenue derived from the block, which is less than the usual 15 percent share for the contractor.

"The final result will be that figure (13.5 percent). There is a formula to calculate the (revenue) split, but the end result will be more or less similar to that," Kalla was quoted Saturday by the Jakarta Post daily as saying.

The Vice President said that the government was hoping to wrap up the negotiations with ExxonMobil with a view to extending the company's contract for developing the field as well as the revenue composition split within the next one or two days.

With that, the government will gain a 70 percent share of the revenue, with the remaining 30 percent allocated for the field contractors, in this case Pertamina and ExxonMobil, as well as the local administration.

It is expected that the Pertamina share will be the same as that offered to ExxonMobil, with the local administration expected to obtain the rest.

The Cepu block, owned by Pertamina but operated by ExxonMobil Indonesia under a technical assistance contract (TAC), has vast oil reserves.

The block is estimated to contain 2 billion barrels of potential oil reserves and 11 trillion cubic feet of potential gas reserves, which is expected to increase Indonesia's oil output by 18 percent. Output has been declining over the last five years.

ExxonMobil has said that the block could produce oil at a rate of 170,000 barrels per day (bpd). The block is expected to start producing oil by 2008.

However, the development of the block has been stalled since 2001 as negotiations between ExxonMobil and Pertamina continued on, among other things, a contract extension and revenue split.

ExxonMobil will be able to extract oil from the block until 2035.

Source: Xinhua