RPT-FEATURE-Indonesia's Texas? Rural Java braces for oil boom

(Repeats story that moved at 0000 GMT)

By Ed Davies

BOJONEGORO, Indonesia, Aug 10 (Reuters) - Few things seem to happen at speed in this sleepy Java town where rickshaws ply the streets. But this rural area of rice fields and teak forests is set to be transformed by Indonesia's biggest oil find in years.

Oil production could start to flow from the huge Cepu field straddling East and Central Java later this month and eventually add millions of dollars to the coffers of local governments, as well as an influx of workers and a wave of new expectations.

The head of the Bojonegoro district, where most of the Cepu field lies, wants people to keep their feet on the ground.

"I don't want my people to have false dreams. Yes maybe it will be like Texas here, but my people can't get access to that," regency head Suyoto said in an interview in his modest offices. Southeast Asia's biggest new oil field is estimated to contain 350 million barrels of crude, currently worth more than $24 billion on global markets. It also has big reserves of gas.

"They imagine that they will become rich with the oil and gas," said Suyoto, 44, who like many Indonesians goes by one name and was previously the rector of a local university.

The Bojonegoro regency, which has a population of about 1.2 million, is currently the 4th poorest district in East Java, relying on a rural economy based on rice, corn and tobacco.

Suyoto wants to prioritise using the district's share of oil revenue, which is due to hit an annual peak of 2 trillion rupiah (about $200 million) in the next few years, to develop its pot-holed roads and upgrade agriculture through irrigation and greater use of livestock such as cattle and sheep.

"Why agriculture? Why husbandry? Because most people can do that," he added, noting many of the oil and gas jobs would be far too skilled for local workers.

Cepu was discovered by U.S. oil giant Exxon Mobil in 2001, but then faced hurdles ranging from land disputes to rows over revenue sharing and the routing of pipelines. The arguments raged despite a dire need for Indonesia to raise flagging oil output.

A deal was finally struck with state oil firm Pertamina in 2006 to jointly develop Cepu with Exxon as operator. Both firms hold 45 percent in the project and the remaining 10 percent is held by four local governments in Central and East Java.

SENSITIVE RESOURCES

Exploiting natural resources in Indonesia, particularly when it involves foreign companies, can often be sensitive.

The huge Grasberg copper and gold mine in Papua, operated by Freeport McMoRan Copper & Gold Inc (FCX.N), has been a frequent source of friction over its environmental impact and the share of revenue going to Papuans. Exxon has also faced pressure over alleged abuses by the Indonesian military guarding its gas project in Aceh on the far northern tip of Sumatra.

Cepu is in the heart of densely populated Java and there have been some protests calling for more local jobs in the project.