Signing of East Natuna block contract postponed

The consortium assigned to develop the East Natuna block, in Riau Islands Province, has postponed the signing of the production sharing contract, pending further assessment of the block?s gas reserves.

The Ministry of Energy and Mineral Resources initially expected to be able to conclude the signing of the production sharing contract for the block by end of September at the latest to help speed up the development of the block as demanded by President Joko Widodo.

Kontan quoted Director for Upstream Development at the ministry, Tunggal as saying Monday that the consortium requested for more time to review the reserves in the block before signing into the contract and makes development commitment. ?They (the consortium members) did not want to be pushed (to sign the contract) by us,? he said.

In addition, ExxonMobil, a member of the consortium, wants the completion of technology market review in 2017.

The East Natuna consortium has been mired with problems including in terms of share ownership since the past several years. In December 2015, the consortium comprises of PT Pertamina (35% interest), ExxonMobil (35%), Total E&P (15%), and Petronas (15%), Kontan said.

But Petronas later back down, and replaced by PTT EP from Thailand. In 2013, Total EP backed down from the project. To date, there?s no clarity over the share ownership of the consortium.

This portal reported recently, that Pertamina and ExxonMobil also differs in the strategy in developing the East Natuna block.

The East Natuna block, formerly called D-Alpha, is estimated to hold up to 200 tcf of gas reserve, the largest gas reserve ever found in Indonesia. However, only 46 tcf of the gas is said to be recoverable due the high CO2 element contained in the reserve. (*)