Pertamina says Natuna D-Alpha project delays persist

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Dec. 30 -- Indonesia's state-owned PT Pertamina may delay its decision to seek partners for developing the Natuna D-Alpha gas block in the Riau Islands. It is facing obstacles regarding the status of former operator ExxonMobil Corp.

"Yes, it [the decision] may be delayed," said Pertamina upstream director Karen Agustiawan, adding that the company might not be able to announce its partners for the block in January as scheduled.

"We will once again write to the government asking for confirmation (of the status of ExxonMobil)," the director said, adding, "We want to know whether [the ExxonMobil contract] has expired or not."

ExxonMobil operated the Natuna block until the government, claiming the firm had failed to make adequate development progress, withdrew its contract.

ExxonMobil denied the claim, saying its rights remain after investing some $400 million.

Data access blocked
Karen also said Pertamina is facing difficulties accessing data about the block. "The data is supposed to be available at the directorate general of oil and gas. I have requested the data, but it is not available."

"If the government exposes the technical data, the managements of the eight potential partner companies can immediately make an evaluation and submit proposals to us," Karen said.

Earlier this month, Pertamina Vice-pres. Director Iin Arifin Takhyan said ExxonMobil still had far more complete technical data than Pertamina's.

"If the government permitted the opening of technical data at the moment," he told the Bisnis Indonesia newspaper, "Exxon with its technical data would have bigger chance to get interest and work together again with Pertamina to operate the Natuna D-Alpha block."

According to government sources, however, neither Pertamina nor ExxonMobil has returned the data.

Pertamina seeks partners
After revoking ExxonMobil's contract, the government ordered Pertamina to develop the block and to seek partners, as investment costs for the project would come to at least $52 billion.

As the block operator, Pertamina has a 40% interest in Natuna, with the remaining 60% to be allocated to partners. At the time of the government's decision, ExxonMobil held a 74% stake in the block, while Pertamina held the remaining 26%.

Last July, Karen said that Pertamina would appoint consultancy Wood Mackenzie to advise it on selecting a partner to develop the Natuna D-Alpha gas block.

"We will appoint Mackenzie to look at 10 potential bidders to develop Natuna," Karen said. "Mackenzie will see the strength of each bidder, as it has good data on them."

Pertamina has since shortlisted 8 prospective companies for potential partnership, including Royal Dutch Shell PLC, Chevron Corp., Eni SPA, Total SA, StatoilHydro ASA, China National Petroleum Corp., Petronas, and ExxonMobil.

Contact Eric Watkins at hippalus@yahoo.com.

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