The developer of Aceh's Block A gas field to get special privilege

Vice President Jusuf Kalla has promised that the government will provide a special right or privilege to the developer of the Block A gas field in northern Aceh, Bisnis Indonesia reported on Saturday.

"We will offer the oil block to other companies if the current operator ConocoPhilips quit the gas field," the vice president said when he was asked to comment on the plan of ConocoPhillips to pull out from the gas project which is now on exploration stage.

Jusuf said that there would be no problem, if Conoco pulled out from the gas field because many companies would be more than happy to take over such a promising gas field.

Coordinating Minister of Economy Aburizal Bakrie confirmed that Conoco and its partner ExxonMobil Indonesia would pull out from the Block A gas field.

"There is no problem. We will open a competitive bidding to find out the right developer to resume gas exploration in the field," he added.

The government and Conoco are currently negotiating the production sharing scheme for the development of the gas field. The government wants 52 percent of the gas production and the remaining 48 percent for Conoco. But Conoco demands a 50:50 production split. According to Conoco, the production activities at the filed will be more costly because the gas in the area has a high CO2 content.

The production from the field is expected to cope with the shortage of gas supplies to the Arun LNG plant and two fertilizer producers PT Pupuk Iskandar Muda and Aceh Asean Fertilizer.

According to the newspaper, several companies have indicated their interests to take over the Block A gas field including local firms Kondur Petroleum SA and Lapindo Ltd.(*)