Exxon submits PoD for Natuna giant block, claiming contract still in force
Thursday, January 8 2009 - 04:40 PM WIB
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Evita Legowo said on Thursday that ExxonMobil Oil Indonesia (EMOI) had submitted the PoD on December 30, 2008.
?The decision whether to accept or reject the PoD is in the hands of Minister of Energy and Mineral Resources,? Evita said.
The dispute over the D Alpha block surfaced several years ago when the government, which was angry over the fact that American firm had yet to start developing the block, announced that its contract on the block had automatically expired in 2005. The firm however insisted it still has rights over the block because it has extended the contract through January 2009. Under the contract, ExxonMobil has 76 percent stake in the block with Pertamina as partner having the remaining 24 percent.
In a Cabinet meeting in February 2008, the government decided to terminate ExxonMobil's contract. It was followed by a letter sent by Minister of Energy and Mineral Resources Purnomo Yusgiantoro in June this year, assigning Pertamina to develop the block.
Pertamina then short-listed eight international oil, gas firms to become partners to develop the block. The talks with the potential partners were hampered by the fact that Pertamina had no technical data on the block.
"We firmly believe that Natuna D-Alpha contract remains in force. Natuna is still feasible to be developed, commercially and technically," Budiman said as quoted by Reuters .
He said that according to the contract, the submission of the PoD is the next step that must take place before the deadline on January 9. Submission of PoD is the next step to get the contract extended.
Natuna D-Alpha block is believed to have recoverable gas reserves of 46TCF.
Total investment to develop the block is estimated to reach over US$25 billion.(godang/bernard)