BPMIGAS, Exxon say Natuna gas block negotiation ongoing

Upstream oil, gas authority BPMIGAS denied on Tuesday report that said negotiation between the government and US oil, gas giant Exxon Mobil on Natuna D Alpha gas block had been halted

?Negotiation is still ongoing, with both parties are reviewing their positions,? BPMIGAS Vice-Chairman Abdul Muin told reporters. He did not give detail.

Separately, ExxonMobil Oil Indonesia spokesperson Maman Budiman also denied the report.

Reuters ran a story on Tuesday, citing unidentified BBMIGAS source that both parties had halted negotiations on the disputed gas block.

The agency quoted the source as saying that the two sides stopped talking recently because they could not agree on how to split the gas produced from the block.

"Indonesia wants a 65 percent split for the government and 35 percent for the contractor. Exxon has rejected the proposal because it wants more," the official said.

Exxon controls a 76 percent stake in the Natuna block while Indonesian state oil and gas firm, Pertamina, owns 24 percent and would like to increase its stake to half.

Indonesia also says that Exxon's contract giving it that 76 percent share has expired, whereas the Exxon has said the contract is valid until 2009.

The Natuna D-Alpha block has around 222 trillion cubic feet (tcf) of gas reserves, of which about 46 tcf is thought to be commercially recoverable. (godang)