Govt to prepare lawyers to face Exxon in international arbitration
Thursday, February 28 2008 - 01:47 AM WIB
?I was summoned by (Vice President) Yusuf Kalla last week and he told me to prepare lawyers to face Exxon,? Alan Ferederick, the head of the legal division of the upstream regulatory body BPMIGAS, said in Jakarta Wednesday.
The government and EMOI have been locked in dispute over the block for years with the former claiming EMOI's contract on the block ended in 2005 and the firm had failed to show any progress in developing the field. EMOI however denied the claim, saying it had spent approximately $400 million for exploration of the field, which gave it the right to an extension until 2009.
Two years of negotations, in which the government was seeking to amend the contract so that it can get higher revenue from the block, has failed to bring results, that Yusuf recently said the government would transfer the block to state oil and gas company PT Pertamina, EMOI's existing partner in the block.
On Feb. 19, 2008, the government officially asked Pertamina to make preparations for the development of the block.
While some experts believe that the move could lead to ExxonMobil taking the case to the international arbitration, the firm reiterated on Tuesday its commitment to developing the block.
The firm said it had received a letter from the government on the block but, the firm's spokesperson said: "we are currently evaluating the content of that letter in the context of our discussions regarding the Natuna PSC.?
The block has around 222 trillion cubic feet (TCF) of gas reserves, of which about 46 TCF is thought to be commercially recoverable. The gas has high corbondioxide content ? something that makes the project needs sophisticated technology and huge investment to develop. (godang)