ExxonMobil has been in talks with Indonesian state-owned oil company, Pertamina, over control of Cepu – the nation's largest untapped oilfield – for almost four years. Cepu is due to come online in 2008 at an initial rate of 180,000 barrels per day.

According to Chinese news agency Xinhua, the Indonesian Minister of State-Owned Enterprises denied there was pressure coming from the US.

“There is no pressure from the US (Government) ... I swear to God I’ve never heard such rumours,” Sugiharto told Xinhua.

Xinhua said Sugiharto had described the competition between Pertamina and ExxonMobil as “a beauty contest in which the parameters are clear" to select the winner.

“I have been standing behind Pertamina since the beginning, but we must be realistic,” he said.

Pertamina has said it wants to be operator of the block for the first five years but ExxonMobil has reportedly rejected the demand.

Earlier in the week, Sugiharto told Xinhua he would be forced to intervene if the two companies could not come to an agreement.

The Indonesian government is reportedly keen to speed up first production from the block to lift its flagging oil industry.

According to AFX, Indonesian Vice President Jusuf Kalla hinted a decision on who will operate the block would be made this week if ExxonMobil and Pertamina were unable to reach a deal.

The four-year dispute had appeared close to resolution after the companies signed a 30-year production-sharing contract last September.

ExxonMobil has reportedly insisted on being the sole operator for the project, while Pertamina wants the two companies to operate the block in five-year rotations.

Pertamina chief executive Widya Purnama said in November that his company refused to hold further meetings with ExxonMobil.

ExxonMobil and Pertamina each hold a 45% stake in the field, with the local government owning the remaining 10%.