ConocoPhillips in talks to swap Aceh gas asset

US oil firm ConocoPhillips is in talks with a number of E&P firms over the possibility to swap its 50 percent interest and operatorship in Block A PSC in Aceh with another Indonesian E&P asset, BPMIGAS chairman Kardaya Warnika said on Wednesday.

Kardaya said that the companies included state oil and gas company PT. Pertamina, JSX-listed E&P firms PT.Energi Mega Persada and PT.Medco Energi Internasional Tbk.

Kardaya said that the process is expected to be completed by the end of next year?s first quarter.

ConocoPhillip is seeking to farmout the block but would want have the block swapped for another Indonesian assets, said Kardaya.

Another participant of block A US oil major ExxonMobil is also in the process of divesting its 50 percent interest in the block, which is believed to contain around 500 BCF of gas, which would be supplied to Aceh fertilizer firm PT. Pupuk Iskandar Muda (PIM). Kardaya said ExxonMobil also targeted to conclude divestment by the end of first quarter next year.

Kardaya said gas negotiation with PIM is nearly concluded with gas price range already narrowed. He did give detail but said that the price would be above US$3 per MMBTU.

PIM, which had relied its entire gas supply from ExxonMobil?s Aceh gas fields had been scrambling for new gas source as ExxonMobil?s gas reserves are declining. PIM would need some 120 MMCFD of gas for its two units.

Block A participants had 48 percent split on the block due to its high CO2 content, which makes the field more expensive to develop.

Kardaya also said that Italian firm ENI, which operates Krueng Mane Block offshore Aceh also asked the government to improve its split from 30 percent currently to 48 percent to enable the company to proceed with the development and to also supply its gas to PIM. Krueng mane is reportedly having 200 BCF of proven gas. ?BPMIGAS is studying ENI?s proposal,? said Kardaya. (alex/godang)