Pertamina, Exxon may use sliding scale scheme in East Natuna

By Godang Sitompul

The Ministry of Energy and Mineral Resources allows state owned oil and gas firm PT Pertamina (Persero) and American firm ExxonMobil Corp to use the dynamic split or sliding scale scheme in their contract on East Natuna block in Riau Islands.

?(Issues related) to terms and condition have been settled. They may use dynamic split or sliding scale scheme,? Djoko Siswanto, Director for the Management of Upstream Activities at the Directorate General of Oil and Gas, told Petromindo.com

Djoko also said Pertamina, Exxon are now in the process of signing memorandum of understanding (MoU) with the Bandung Institute of Technology (ITB) on partnership to separate carbon dioxide (CO2) elements from the block?s gas.

Formerly called Natuna D-Alpha, East Natuna block is believed to contain 200 trillion cubic feet (tcf of gas) but only 45 tcf of the gas is recoverable due to the high CO2 contents of the gas. The development of the block will require advanced and thus more expensive technology to remove the carbon dioxide.

?In-depth study is in progress on technology to separate the CO2 which accounts for 70 percent of the gas reserve. The issues include the location of the injection of the CO2,? Djoko said.

Several companies were initially interested to co-develop the block aside from Pertamina and Exxon. They included Petronas and Total, but Petronas has decided to withdraw from the project.

Editing by Johannes Simbolon