Govt cannot cancel Exxon's contract over Natuna gas field : BP Migas

The government does not have any rights to cancel the contract of ExxonMobil Indonesia over the D-Alpha gas field in Natuna Sea, although the company has not yet begun the development of the gas field, Bisnis Indonesia reported on Wednesday.

"The contract could be terminated only if Exxon did not ask for its extension. But Exxon had asked for the extension as required. So the government cannot cancel it even though the company has not yet begun the development of the gas field," Kardaya Warnika, the head of BP Migas, the regulatory body for oil and gas exploration and production, said in Jakarta on Tuesday.

Kardaya said that the agency had required Exxon to carry out a feasibility study on the development of the gas field as part of the requirement of the extension of the contract. "Up to now, Exxon has not yet begun the feasibility study. Even so, the government has no rights to cancel its contract," he added.

The D-Alpha gas field is jointly owned by ExxonMobiland Pertamina, with interest of 76 percent and 24 percent, respectively. The gas field with estimated gas reserves of about 46 trillion cubic feet was found in 1973, while the production sharing contract for the development of the gas field was signed in January 1980.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has asked BP Migas to unveil the current status of Exxon's contract over the gas field.(*)