Indonesia in talks with Exxon over production sharing at Cepu

Indonesia in talks with Exxon over production sharing at Cepu

Indonesia in Talks with ExxonMobil Over Production Sharing at Cepu Block

The Indonesian government has extended ExxonMobil’s operating license for the Cepu Block in Central Java until 2055, contingent on a $10 billion investment commitment from the U.S. energy giant. The original contract, set to expire in 2035, was renewed under the Reciprocal Trade Agreement between Indonesia and the United States, signed in February 2026. Energy and Mineral Resources Minister Bahlil Lahadalia confirmed the extension, emphasizing that the agreement includes negotiations on a revised cost and revenue-sharing framework for the block, though specifics remain undisclosed.

The Cepu Block, operated jointly with state-owned Pertamina and four government entities under the Badan Kerja Sama (BKS) PI Blok Cepu, accounts for approximately 30% of Indonesia's oil production, equivalent to 170,000–185,000 barrels per day. Over the past two decades, the block has contributed $35 billion in economic value and produced over 700 million barrels of oil. ExxonMobil’s investment under the new agreement aligns with broader U.S.-Indonesia trade commitments, including Indonesia’s pledge to import $15 billion in energy commodities from the U.S. by 2027.

The revised terms also reflect Indonesia’s strategic shift toward energy self-reliance, including biofuel mandates and plans to reduce fossil fuel imports. While the government seeks to finalize the revenue-sharing structure, the extension underscores ExxonMobil’s role in maintaining Indonesia’s energy security amid regional supply challenges.

ExxonMobil has previously highlighted the Cepu Block’s significance as the lowest-cost oil production asset in Indonesia, with operations supported by advanced technology and strong local partnerships.

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