Govt and Exxon to renegotiate contract on Natuna gas field

The government and the United States-based firm ExxonMobil will renegotiate the company's contract on the development of the Natuna D-Alpha gas field in order to give more benefits to the Indonesian people, Kompas reported on Wednesday.

The plan to renegotiate the contract over the Natuna D-Alpha gas field was unveiled during a meeting in New York between Vice President Jusuf Kalla and Exxon's top executives including Senior Vice President Stuart R. McGill, Asia Pacific Vice president for Exploration Steve Greene, President and GM of ExxonMobil Oil Indonesia Peter J. Coleman.

Vice President Kalla, who was in New York on an official visit, said that the government agreed to renegotiate the possibility of extending ExxonMobil's contract to develop the Natuna D-Alpha gas field on the condition that the new contract would give more benefits to the Indonesian people.

ExxonMobil has asked for the extension of the current contract, which should have been expired in 2007. Although the contract is considered much more attractive than those in other gas fields in the country, ExxonMobil has not started its exploration activities.

Exploitation of the resources is a complex technical challenge and high cost due to the large size of the field and a gas composition of approximately more than 70 percent carbon dioxide.

The Natuna D-Alpha gas field has estimated recoverable hydrocarbon resources of 46 trillion cubic feet (TCF) of natural gas.

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