Pertamina asks govt to revoke Exxon gas field incentives

State oil and gas company Pertamina has asked the government to revoke the incentives awarded to American oil and gas company Exxon-Mobil for operating the gas fields of the Natuna islands in South China Sea.

The special incentives also allow Exxon-Mobil to retain 40 percent of proceeds from the gas field's output rather than the standard 30 percent in usual production sharing contracts.

``That special treatment was granted during the administration of former President Soeharto, and deviates from standard production sharing contracts. Pertamina wants the contract returned to standard,'' Pertamina's exploration and production Gatot K. Wiroyudo was quoted as saying by Sidick A. Nitikusuma, spokesman for Pertamina's foreign contractors management body (BPPKA).

According Sidick, Minister of Mines and Energy Susilo Bambang Yudhoyono has sent a letter to President Abdurrahman Wahid asking him to issue a decree to revoke the special treatment.

The Natuna Islands' area is believed to contain a huge gas resource. Gas fields in the western part of the area, also called West Natuna, is being developed a consortium comprising Conoco Inc. of the United States, Gulf Resources of Canada and Premier Oil of Britain, which have signed a gas-sale-and-purchase agreement with Singapore Power.

Exxon-Mobil has been awarded a contract to develop the so-called Alpha Block in the eastern part of the islands -- also called East Natuna --, where it had discovered an estimated 222 trillion cubic feet (TCF) of gas, of which 46 TCF were commercially recoverable.

Pertamina currently has a 24 percent stake in the Natuna field and Exxon Mobil has 76 percent. (*)