Conoco offers govt to swap interest in Block A gas block

ConocoPhillips has offered the government to swap its ownership in the Block A gas block with other gas block in the country, instead of selling it to other oil and gas companies.

Kardaya Warnika, the chairman of BP Migas, the government’s regulatory body for oil and gas exploration and production, said in Jakarta on Monday that ConocoPhillips had offered a barter deal for its ownership in the Block A gas block.

“Conoco prefers to swap its 50 percent interest in the Block A gas block rather then selling it,” he was quoted as saying. He, however, did not explain the government’s response to the offer.

Unlike ConocoPhillips, ExxonMobil which also owns the other 50 percent interest in the gas block has agreed to sell its participating interest in the gas block.

The two companies are reluctant to begin the development of the gas field although the government has agreed to reduce the portion of its production split from the oil block to 52 percent from about 70 percent stated in the contract. They said that the development of the gas block is still too costly despite the government’s agreement to lower the production split.

Kardaya also said that the change in the status of the Natuna D-Alpha gas block into an open gas block was still being studied because ExxonMobil planned to extend its contract.

“If Exxon wants an extension of the contract, the company should first find the market for the gas production, and more importantly the company should submit the schedules for its development,” he said.

A number of companies including Medco Energi have expressed interest to take over the gas block which is jointly owned by ExxonMobil and Pertamina, with ownership of 76 percent and 24 percent, respectively. (dino)