Govt to offer Exxon priority to develop Natuna gas field

Indonesia will give ExxonMobil Corp. priority to reach a new deal on operating agreement for the offshore gas field Natuna off Borneo island, following the termination of the company's earlier contract with the government, Vice President Jusuf Kalla said Friday as quoted by agency.

"Certainly we will renegotiate. We will give a top priority to Exxon to discuss the matter," Kalla told a press conference.

The vice president said that the next operating contract had to give more benefit to the country, not like the earlier contract which provide zero percent split of profit to the government.

Earlier, Minister Mines and Energy Minister Purnomo Yusgiantoro said the country terminated the contract with Exxon, a U.S.-based oil and gas company, to drill the major offshore gas field, but ExxonMobil said that the contract stood firm as it was extendable and they were still working to develop the field.

The minister cited that the company had failed to submit to the regulator a plan for developing the block and selling the gas, which has a high ratio of carbon dioxide that make it to be difficult to extract.

"We consider the contract has been legally expired," said the vice president."The president later is going to make a policy of how the country get more benefit from the Natuna filed," Kalla said.The block contains around 222 trillion cubic feet (tcf) of gas, 75 percent of which is CO2.(*)