Cabinet to decide on ExxonMobil's Block A gas field in Aceh
Wednesday, June 23 2004 - 03:24 AM WIB
Minister of Energy and Mineral Resources PurnomoYusgiantoro said in Jakarta on Tuesday that the plan to further develop the Block A gas filed required approval of the Cabinet ministers because ExxonMobil and ConocoPhillips demanded a higher production split from the gas field.
"ExxonMobil and its partner has asked a better term of condition in further developing the gas field as the compensation to meet the government's request to sell the gas from the field to domestic buyers," the minister was quoted as saying.
Earlier report said that ExxonMobil and ConocoPhillips had asked a higher production split of 50:50 from the gas production at the Block A field. The current production split of the Block A gas production is 70:30 in favor of the government.
ExxonMobil and its partner ConocoPhillips which own 50 percent interest respectively in the gas field has the right to develop the gas field until 2010. The two companies have been asked to further develop the field to cope with the shortage of gas to fertilizer plants in the province.
ExxonMobil and its partners could not intensify exploration activities due to security uncertainties in the troubled province. At present, the production is only enough to meet export commitment.
Commenting on the higher production split required by ExxonMobil and its partner, Minister Purnomo said that the proposed production split was still too high. "If the split is set at 65:35, it is still tolerable," the minister said.
If the exploration activities are intensified, Block A gas field will be able to provide the gas needs of local fertilizer plants PT Pupuk Iskandar Muda and PT Asean Aceh Fertilizer, which need between 65 and 75 million cubic feet of gas per day.
The gas supply to the fertilizer plants have been discontinued because the existing gas production is only enough to meet the export commitment of the Arun LNG plant.
The government has said that if ExxonMobil and its partner refused to intensify gas production, it would be better for them to return the gas to the government. The gas field could be then be given to other operators. (*)