Indonesia Cepu Block Peak Output Likely Delayed 2 Yrs To 2014

JAKARTA (Dow Jones)--The Indonesian government has pushed back the scheduled target for the Cepu Block to produce 165,000 barrels of crude oil per day to 2014 from 2012 due to problems related to land clearance and getting permits from the local government, an official said during the weekend.

"The target of 20,000 barrels a day would be reached by the end of the 2009," Abdul Muin, deputy chairman of the upstream oil and gas regulator BP Migas told Dow Jones. "This is also pushed back from the original target of July 2009."

Mobil Cepu Ltd., a venture between Exxon Mobil Corp. (XOM) and the state-owned PT Pertamina, has suspended crude oil production from the Block since late March, as the local government has yet to give a permit to build a pipeline to carry the oil to storage tanks, Eddie Purwanto, BP Migas's deputy chairman for operations told Dow Jones in April.

The latest setback for Mobil Cepu's operations in the block, which is estimated to contain 600 million barrels of oil, could further dim the government's prospects of significantly boosting the country's crude oil production from around 980,000 barrels/day currently, and quickly reclaiming the country's status as a net oil exporter.

By Deden Sudrajat, contributing to Dow Jones Newswires