Cepu dispute drags on for ExxonMobil

The seemingly long-running war of words between Indonesia's Pertamina and ExxonMobil continue as both companies continue to squabble over the terms of a proposed 50-50 joint venture to exploit the Cepu oil and gas field.

The furore erupted in 2000 when Exxon bought exploration rights from Pertamina for the field, which the state-owned company had spent 30 years trying to exploit to no avail, for US$140 million and then promptly discovered a significant amount of oil and gas estimated to be around 600 million barrels.

Pertamina has asked for 50% stake in the field and has claimed the American giant concealed key information during the negotiation process for the rights. Exxon, on the other hand, is unwilling to invest the required US$2.6 billion for a joint exploration bid if it does not receive a long-term guarantee from the Indonesian government.