ExxonMobil, PTT conduct joint study on Natuna giant gas block
Thursday, May 6 2004 - 09:21 AM WIB
Eddie Purwanto, a senior official at upstream oil, gas authority BP Migas told reporters that the joint study might lead to PTT?s participation on ExxonMobil-operated Natuna D-Alpha block.
ExxonMobil Oil Indonesia spokesperson Deva Rachman confirmed that ExxonMobil is in talks with PTT, but she declined to comment further.
The D-Alpha block, located in the eastern part of the Natuna islands, was one of the darling projects of the former President Soeharto?s government. Soeharto was very proud of the project that he assigned then Minister of Research and Technology BJ Habibie, who later became the country?s President, to lead the project.
The D-Alpha block contains a proven reserve of around 42 trillion cubic feet of recoverable gas, one of the world?s largest. It is touted to become the main supplier of gas for Southeast Asian countries, grouped in ASEAN, which are thinking to build a gas pipeline network across the region.
The problem is that the D-Alpha?s gas contains a high carbon dioxide (CO2) content which must be separated before the gas can be sold, a process, which will drive the price of the gas beyond the price of gas from other field. The owner of the block has been studying for many years to find a technology to reduce the cost of extracting gas from the block.
An ExxonMobil official earlier said that gas production from D-Alpha would be competitive at the volume of at least 1 billion cubic feet per day.
The block is 76 percent owned by ExxonMobil and 24 percent by Pertamina.
Eddie said that Malaysian state oil firm Petronas, which had earlier indicated interest to participate in the block and to buy gas form the block had backed away.
Government sources said that ExxonMobil is scrambling to find ways to speed the development of D-Alpha, as, unless the block was developed, the contract would expire in 2005.(godang)