Exxon Mobil confirms plan to sell stake in Aceh gas field

US oil giant Exxon Mobil Corp. confirms that it might sell its 50 percent interest in Aceh Block A gas block and would open tender to find most suitable buyer.

ExxonMobil Oil Indonesia vice president public affair Maman Budiman said on Monday that the company might open tender to sell its interest in the block next month.

US oil firm ConocoPhillips, the operator of Block A and 50 percent interest holder is also considering to sell its interest in the block said Minister of Eenergy and Mineral Resources Purnomo Yusgiantoro, but the ConocoPhillips Indonesia spokesperson TM Razief Fitri would not comment on the matter.

Block A participants have delayed the development of the block, citing that the development of the block was not economically feasible given the high CO2 content of its gas, unless the government offered a more generous production split.

The government then proposed to lower its share of the block?s gas output to 52 percent, offering the remaining 48 percent to Conoco and Exxon. But, both firms insisted on a 50-50 percent production split.

The government?s proposal has apparently failed to satisfy Conoco that it has reportedly planned to sell its stake in the block.

Companies like Energi Mega Persada and Medco Eenergi had openly voiced their interest to buy Block A interest.

Upstream oil and gas regulatory body BP Migas?s Kardaya Warnika earlier said any companies interested to take over the Block A stake should guarantee that they will be capable of commencing production activities by 2008.

"New operator of the Block A gas field should be able to produce gas by 2008. If not, the government will oppose it," Kardaya said.

The government wants a quick development of the block to solve gas shortage in the province. (godang)