ExxonMobil, ConocoPhillips urged to further develop Aceh gas field
Tuesday, February 17 2004 - 04:00 AM WIB
Agusman Effendi, deputy head of the House's Commission VIII for energy affairs, said in Jakarta on Monday that if exploration activities in the concession were intensified, the shortage of gas supply to Pupuk Iskandar Muda (PIM) and Aceh ASEAN Fertilizer plants could be resolved.
According to him, gas deposit at the Block A field alone is still adequate to meet the gas need in the area for at least 10 years.
ExxonMobil and ConocoPhillips which owns 50 percent interest respectively in the gas field has the right to develop the gas field until 2010. The field is operated by ConocoPhillips.
According to Suara Karya, the two companies could not intensify their exploration activities due to security uncertainties in the troubled province. However, Dow Jones said the firms are seeking to increase its revenue share from the field.
Dow Jones quoted Agusman as saying that both firms want to increase their revenue share to 50 percent from 35 percent, saying the high sulfur content of the gas in the block boosts production costs. If Exxon Mobil's proposal is approved by the government, the government will get 50 percent of the revenue from the block, which hasn't begun producing gas yet.
Currently, gas supplies in the province come mostly from the Arun field owned by ExxonMobil. However, gas supplies to the two fertilizer plants has been discontinued because the Arun existing production is only enough for LNG producer PT Arun NGL Co. to meet its export commitment. As the consequence, the government has to import LNG from foreign sources to meet Arun's export committement and the Arun gas can be supplied to the fertilizer plants.
"If they refuse to further develop the gas field, it will be better for them to return back the gas field to the government. The gas field could be then be given to those who want to develop it," he said. (*)