US VP visit to provide ?good news? for East Natuna project: Official

Petromindo|Lucky

Deputy Minister of Energy and Mineral Resources Arcandra Tahar said that the visit by US Vice President Mike Pence to Indonesia today will provide ?good news? for the planned development of the East Natuna block in Riau Islands Province.

?There?s good news for Natuna this month, Pence will be visiting here,? Arcandra said as quoted by Kontan.

He said that Pence will among others discussed with the Indonesian government on US investment in the Indonesian upstream sector particularly in East Natuna block.

The paper said that Pence is expected to help resolve the issue of ownership over the East Natuna block. In a bid to help accelerate the development of the block, the Indonesian government in January decided to transfer the ownership of the East Natuna block to state-owned oil and gas firm PT Pertamina, which is allowed to seek partners including from the East Natuna consortium, whose members include ExxonMobil and PTT Thailand. But under the old contract of the block, which was then called Natuna D-Alpha, ExxonMobil was the operator. ?Exxon considers there are things which are still not yet clear (in the old contract),? Arcandra said.

Meanwhile, Arcandra was quoted by Bisnis Indonesia as saying that following recent talks with visiting ExxonMobil?s Senior Vice President Mark W. Albers, the company promised to send a letter within a month regarding its commitment to accelerate the development of the East Natuna block.

The government of Indonesia has been eager to accelerate the development of the East Natuna block as part of efforts to develop the country?s border area.

Pertamina Upstream Director Syamsu Alam said in January that the East Natuna consortium was still in the process of completing the technology and market review of the planned development of the East Natuna block, expected to be completed in 2018, after which the consortium will decide the next steps including deciding on the shares of the consortium members and the signing of the contract with the government.

He added that the high carbon dioxide content in the East Natuna block has made the project to be more complex both in terms of technology and commercial.

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.

In the early phase, the consortium aims to accelerate oil production with a target of 7,000-15,000 bopd once the PSC has been signed. (*)