Exxon Mobil, Medco close to sign Aceh gas block deal

US oil major Exxon Mobil Corp. would likely sell its 50 percent working interest in Block A gas block in the northern part of Sumatra to JSX-listed oil firm PT. Medco Energi Internasional Tbk, a Petromindo source said.

The source said that Exxon Mobil and Medco are now in final talks to negotiate terms and conditions of the interest transfer. ?The deal is expected to be closed soon,? said the source without further elaborating.

Earlier report said that Exxon Mobil had short-listed 7 bidders to buy its interest in the block.

Both of ExxonMobil Oil Indonesia and Medco?s officials declined to comment on the matter when contacted.

The block is operated by another US oil major ConocoPhillips, which is also reportedly in the process of selling its interest. ConocoPhillips has 50 percent interest in the block.

Block A contains some 500 billion cubic feet of gas reserves and is designated to be sold to Aceh fertilizer maker PT. Pupuk Iskandar Muda (PIM). Operator ConocoPhilips owns the other 50 percent interest in the block. The government expects to have natural gas flowing from Block A by 2008. (godang)