Chronology of dispute over Natuna D-Alpha block

The Ministry of Energy and Mineral Resources issued on Friday a press statement, detailing the chronology of events leading to the dispute between the government and American energy firm ExxonMobil Corp over the Natuna D-Alpha block in South China Sea.

The press statement states as follow:

1. January 8,1980: State owned oil and gas company PT Pertamina as the then authority to supervise oil and gas contractors (now the function is performed by BPMIGAS) signs a production sharing contract with Esso Natuna to develop the block with a contract period of 30 years. Under the contract, Esso Natuna and Pertamina holds an equal 50 percent interest in the block.

2. 1996: Pertamina hands over a 26 percent participating interest to Mobil Natuna, slashing its interest to 24 percent and increasing ExxonMobil's interest to 76 percent (both Esso Natuna and Mobil Natuna are subsidiaries of ExxonMobil)

3. January 9, 1995: Pertamina (now BPMIGAS) signs Basic Agreement with Esso Exploration & Production Natuna Inc. which amends several chapters in the natuna D-Alpha PSC, which among others extends the deadline for the contractor to submit commitment to develop the block to January 9, 2005. Under the contract, the development commitment can only be acceptable if BPMIGAS and the contractor agree that the field development is commercially viable based on a feasibility study.

4. Esso Exploration & Production Natuna Inc sent a commitment letter before January 9, 2005. The letter was not attached with a feasibility study which can be used to determine the block's commercial viability. Since the contractor could not submit a feasibility study by the January 6, 2005 deadline, the contract was considered to have automatically expired.

In view of the nation's urgent needs for additional gas production, the government later formed a task force to negotiate a new PSC with ExxonMobil. Since no agreement was reached regarding PSC's main provisions, the government then in a Cabinet meeting assigns Pertamina to carry out feasibility study for the development of the Natuna D-Alpha block.

5. January 14, 2009. BPMIGAS sends a letter to reject the plan of development (PoD) sent by Esso Natuna Ltd, citing that the contract has expired. (Godang)