Pertamina wants more than 50 percent ownership in Natuna

State oil and gas company PT Pertamina wants more than 50 percent stakes in the Natuna D-Alpha block in South China Sea that is now controlled by American energy firm ExxonMobil Corp.

Pertamina?s president Ari S. Soemarno said on Thursday during the Indogas 2007 Conference that as a state owned company, the government should protect Pertamina?s interest and push ExxonMobil to hand over some of its shares in the gas rich block in the current negotiation on the review of the contract on the block.

?If the government does not protect Pertamina?s interest, it will be a loss for the government,? he said, adding that Pertamina has invested a lot of money in the block.

Under the existing contract, the block is 76 percent owned by ExxonMobil and 24 percent by Pertamina. Discovered in 1973, the block?s wells are said to hold 222 trillion cubic feet (TCF) of natural gas resources, of which only 46 TCF is thought to be commercially recoverable. However, the gas is said to have a high CO2 content, which makes it very expensive to be exploited. That?s why ExxonMobil has delayed the development of the block for many years.

ExxonMobil has agreed to renegotiate the contract following pressure from the government who claimed t the existing contract has expired and is ?unacceptable? because, different from other contracts, it gives no production share to the government.

In October last year, Ari said the ExxonMobil-Pertamina consortium had invested US$250 million, including $60 million, or 24 percent of the total amount, of Pertamina?s contribution.

Ari said that many companies had voiced readiness to cooperate with Pertamina to develop the block, including Malaysian firm Petronas, Thai firm PTT, Norwegian firm Statoil ASA, French firm Total SA, and Anglo-Dutch firm Shell.

Meanwhile, Kardaya Warnika, head of oil and gas regulator BP Migas, which is renegotiating the contract with ExxonMobil on behalf of the government, did not rule out the possibility of the government giving a larger stake to Pertamina.

He noted however that he could not guarantee that the government would make the move because the government is not negotiating with individual companies but ExxonMobil and Pertamina as a PSC partnership. (Alex)