Govt expects negotiation on Block A gas field can be finalized this week

The government expects negotiation on the development of the Block A gas field in Aceh with oil and gas firms ConocoPhillips and ExxonMobil could be finalized this week, according to Director General of Oil and Gas Iin Arifin Takhyan.

Speaking to reporters on Friday, Iin said that the negotiation would focus on two main lingering issues: production split of the gas output and the selling price of gas allocated for local fertilizer firms.

"We hope our differences can be resolved soon so that the negotiations can be finalized this week," he said.

ConocoPhillips and ExxonMobil have demanded a 50 percent split from the gas production of the Block A gas field and a price of US$3.2 per million cubic feet for the gas to be sold to fertilizer companies.

According to Takhyan, the government's share from thegas production should exceed 50 percent.Regarding the selling price of gas for local firms, Iin acknowledged it must economically viable for the development of the Block A gas field. "But it (the price) should also be affordable for the fertilizer companies," he added.

The government hopes that the development of the Block A gas field would help cope with the protracted problem of natural gas supply shortage faced by manufacturing firms in Aceh particularly fertizer firms, which use the commodity as raw material for fertilizer production.(godang/maya)