Government summons ExxonMobil over East Natuna project

The Ministry of Energy and Mineral Resources plans to hold talks with ExxonMobil next week over the East Natuna block project after the company sent a letter to Minister Ignasius Jonan that it has decided to pull out from the planned project.

Director General of Oil and Gas at the ministry, IGN Wiratmaja Puja said on Wednesday that the meeting will further discuss the ExxonMobil decision. He added that state-owned oil and gas firm PT Pertamina, which leads the East Natuna consortium, will also be present in the meeting.

As reported on Wednesday, ExxonMobil Indonesia Vice President for Public and Government Affairs, Erwin Maryoto said that the company has made the decision following recent completion of the technology and market review, which suggests that the project is not commercially feasible under the current terms and conditions.

Wiratmaja said that in the letter, ExxonMobil said it was ready to help the government of Indonesia in the planned development of the East Natuna block as the company has the required technology and technical capacity. ?The assistance (from ExxonMobil) can be in various forms such as technology supply, providing data, etc. That?s in the letter,? he said.

ExxonMobil is part of a consortium led by Indonesia?s state-owned oil and gas firm PT Pertamina assigned by the government to develop the gas-rich East Natuna block. The other member of the consortium is PTT of Thailand.

The East Natuna block in Riau Islands Province, formerly called D-Alpha, is estimated to hold up to 200 tcf of gas reserves, the largest gas reserves ever found in Indonesia. However, only 46 tcf of the gas is said to be recoverable due the high CO2 element contained in the reserve. In the early phase, the consortium aims to accelerate oil production with a target of 7,000-15,000 bopd once the PSC has been signed.

Editing by Reiner Simanjuntak