Speaking out: Indonesia's Vice President Jusuf Kalla
ExxonMobil 'has first dibs' on Natuna
Indonesia will give ExxonMobil top priority to renegotiate a new operating contract for the huge Natuna offshore gas field, the country's Vice President Jusuf Kalla said today.
Earlier, Indonesia's Oil Minister Purnomo Yusgiantoro said Jakarta had terminated the operating contract for the natuna D-Alpha field, off Borneo, because the US supermajor had failed to find a market for the gas.
ExxonMobil has disputed this and said the contract allows for two more years for it and Indonesian state-run Pertamina to satisfy conditions or proceed with development even if the terms for development of the field are not met by 8 January next year.
"The president will decide policy on how the country can obtain as much benefit as possible from Natuna," Kall told Reuters.
"The contract has legally already expired. Certainly we will give ExxonMobil first priority to renegotiate (on terms and conditions)," he added.
ExxonMobil has a 76% stake in D-Alpha, with Pertamina holding the mreainder.
The copany added it has made significant progress marketing Natuna gas to credible buyers.
An official at oil watchdog BPMigas, who declined to be identified, said today that the terms of the agreement that Indonesia says has expired did not benefit the country enough.
Natuna D-Alpha holds around 222 trillion cubic feet of gas, of which 46 Tcf is thought to be recoverable, but the field contains about 70% carbon dioxide, making it expensive to develop and difficult to sell.
Indonesia and ExxonMobil signed a basic agreement in 1995 covering an estimated $40 billion to be invested in the offshore gas project in the South China Sea.