Exxon?s negotiation on gas sales faces deadlock

The negotiations between the Aceh-based gas producer ExxonMobil Indonesia and fertilizer producers in the province including PT Pupuk Iskandar Muda, PT ASEAN Aceh Fertilizer were halted due to disagreement over the price proposed by the gas producer, Koran Tempo reported on Friday.

The daily reported that Exxon proposed to sell its gas at US$1.5 per million British thermal unit but the offer was rejected by the two fertilizer producers which insisted only to buy the gas at below US$1.5 per MMBTU.

Vice President of BPMIGAS, the government?s agency in charge on oil and gas exploration and production, acknowledged that Exxon and the two fertilizers had not renewed their contracts due to difference in prices.

He said that although the gas sales contract between Exxon and the two fertilizer producers expired in December last year, the gas supply still continued. ?We have asked Exxon to continue the gas supply despite the absence of the contract agreement,? he said.

President Director of PT Pupuk Iskandar, Hidayat Nyakman said that the company could not meet Exxon?s demand to but its gas at US$1.5 per MMBTU. ?The price is too high,? he said, adding that the price should be lower than US$1.5 per MMBTU. (*)