Land clearance hampers oil production in Indonesia's Cepu

U.S.-based oil giant Exxon Mobil has delayed oil and gas production in the Indonesian major block of Cepu from its initial schedule of the first quarter of 2009 due to land clearance problems, an official said Monday.

Head of Executive Agency for Upstream Oil and Gas Activity (BP Migas) Kardaya Warnika said the delay was particularly caused by the difficulty faced by Exxon Mobil in carrying out land acquisition.

"Land acquisition is difficult because the block is located in residential areas and rice fields," Kardaya was quoted by the national Antara news agency as saying.

BP Migas, however, demanded that Exxon Mobil try to produce oil on schedule by utilizing production facility owned by the Joint Operating Body (JOB) between state-run oil firm Pertamina and Petro China East Java Ltd.

He said the facility is located close to the Central Java block to be jointly exploited by Exxon Mobil and Pertamina.

The Cepu block is expected to produce 20,000 barrels of oil per day in its early operation and its production will be gradually increased to 165,000 barrel par day.

Source: Xinhua