Indonesia's state oil and gas company PT Pertamina and US oil company Exxon Mobil Corporation, through their respective sister companies, have signed a contract to set up a joint venture to develop the Cepu Block.

"Yesterday (Saturday), the contract was signed in which all the agreed points would be specified in joint operation agreement (JOA) between Pertamina and ExxonMobil," official news agency Antara quoted Abadi Poernomo, a spokesman for Pertamina, as saying on Sunday.

Later, cooperation mechanism in exploration of the Cepu Block would be established through the JOA by Pertamina and Exxon Mobil, he said.

"JOA will also make a decision on costs before Cepu Block could really produce oil and gas," he added.

The cost as claimed by Exxon Mobil was 450 million US dollars, while Pertamina only approved 150 million US dollars.

Cepu block is expected to enable Indonesia to produce more crude oil from 150,000 to 200,000 barrels per day.

Source: Xinhua