Oil & Gas Body Negotiates Natuna Contract Termination
Tuesday, 16 January, 2007 | 15:31 WIB

TEMPO Interactive, Jakarta: The negotiation of Natuna D-Alpha Block gas field management between the Upstream Oil & Gas Executing Body (BP Migas) and ExxonMobil Oil Indonesia Inc. has not yet resulted in any decision. So far BP Migas is still in discussion with the United States oil company.

According to BP Migas Chairman, Kardaya Warnika, the negotiation of the contract termination with ExxonMobil is not yet finished. “If it isn't finished yet, we can't say anything,” he said yesterday (15/1). According to him, his side is still discussing the government's answer regarding BP Migas' letter dated December 8, 2006, with the profit-sharing contractor.

In the letter, he suggested the termination of ExxonMobil contract in Natuna D-Alpha Block. Kardaya, concurrently the government's negotiation team chairman, said the government has already given an answer about the contract termination. “Now we're discussing it with Exxon,” he said.

ExxonMobil said that it would not bring the Natuna contract resolution to international arbitration and that it still wanted to manage the largest gas field in Indonesia. According to ExxonMobil Oil Indonesia's spokesperson, Deva Rachman, his side wanted a resolution which is peaceful and beneficial for the government and ExxonMobil. “It's not true that Exxon will (claim) arbitration because we want a negotiation beneficial for both sides,” he told Tempo last week.

The Energy and Mineral Resources Department has given ExxonMobil time until June 2007 to complete its obligation with third parties in Natuna D-Alpha Block until the end of last year. The obligation includes drilling payment and the data return process. Natuna Block's status will be determined after all Exxon's obligations are completed.

Director General of Oil and Gas, Luluk Sumiarso, said there are three options for the government to determine Natuna Block's status. First, to put up Natuna as an open area so that Pertamina has the privilege to manage it according to provisions. Second, to put the block on tender. This means Pertamina will loss its privilege and must compete with other contractors. Third, to offer it directly to investors . “Cooperation to manage Natuna is open for everyone, including ExxonMobil,” he told Tempo last weekend.

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