Govt agrees to renegotiate with ExxonMobil over Natuna gas block

Government has agreed to renegotiate with Exxon Mobil Corp. on a new contract to develop a natural gas deposit in the Natuna D-Alpha block, Vice President Jusuf Kalla said Friday.

Kalla told reporters that the government will seek to change the revenue-sharing terms of the old contract, which it has unilaterally claimed to have expired.

"The terms must bring the most benefit for Indonesia," Kalla said.

Earlier, ExxonMobil agreed to talk with the Indonesian government about its contract on the Natuna D-Alpha gas block, as the latter reiterated that the contract was no longer valid.

On Sept 2006, ExxonMobil Oil Indonesia's President and General Manager Peter J. Coleman said the company was proceeding with a "four-year plan" to deliver natural gas from the Natuna D-Alpha block to foreign buyers by 2014. The Natuna gas is said to have high hydrocarbon content, which makes it very expensive to produce the gas.

ExxonMobil owns 76 percent stake in the field and the remainder is owned by state oil and gas company Pertamina. (*)