CORRECTION: Cabinet to decide on ExxonMobil's Block A gas field in Aceh
Wednesday, June 23 2004 - 05:09 AM WIB
Below is the complete corrected story:
Cabinet to decide on Block A gas field in Aceh
The government's decision whether or not ConocoPhillips and its partner ExxonMobil will be allowed to further develop the Block A gas field in Lhokseumawe, North Aceh will be made during the upcoming cabinet meeting, Investor Daily reported on Wednesday.
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 the joint venture demanded a higher production split from the gas field.
"ExxonMobil and ConocoPhillips 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 the joint venture 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.
The Block A PSC is operated by ConocoPhillips in a 50:50 percent partnership with ExxonMobil. The joint venture 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.
The joint venture 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 the joint venture, 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 the joint venture 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. (*)