CORRECTED-Indonesia regulator says Cepu oilfield faces setback

Mon Jan 28, 2013 4:37am EST

(Corrects headline to include sourcing, clarifies that regulator wants Exxon to replace local CEO, not Exxon plans to replace him)

JAKARTA Jan 28 (Reuters) - ExxonMobil Indonesia's Cepu block will likely not reach full production until August or September 2014, behind the initial schedule for May 2014, an official from the oil and gas regulator told Reuters on Monday.

"Initially we were expecting the project would deliver (full) production in May 2014, but I'm not sure if we can deliver it in May or not ... Probably going up to August or September," said Gde Pradnyana, operations controller at the regulator.

Cepu is producing 24,000 barrels per day and its target production of 165,000 is hoped will boost Indonesia's dwindling crude output.

Separately, the regulator for the first time confirmed reports in local media that it would not renew the work permit for Exxon Mobil's local chief executive, Richard Owen.

"He's been here for one year and we think it's probably better for Exxon to nominate somebody else, to replace him," Pradnyana said.

Exxon representatives were not immediately available to comment on Monday.

Pradnyana said Cepu was a top priority for the government, and that its management and delays in production were one of the reasons why the regulator had decided not to extend Owen's work permit. (Reporting by Fergus Jensen; Editing by Simon Webb and Mark Bendeich)

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