Pertamina and ExxonMobil here last Friday signed a head of agreement on the joint development of the field in the presence of Energy and Natural Resources Minister Darwin Saleh. Under the agreement, the field has been renamed East Natuna.

Mr Saleh said ExxonMobil had been chosen through a selection process conducted by Pertamina.

"There's a possibility that new partners will get on board in accordance with the short listing process being done," he said.

He added the name change from Natuna (D-Alpha) to East Natuna would be mentioned in a more "contextual" contract. As a follow up to the signing of the head of agreement, both companies would hold more detailed dicussions on the commercial aspects of the project.

The minister made it clear that gas from Natuna would be sold in the domestic market by taking into account the economic aspects of the cooperation as the joint venture would involve a huge investment and high technologies.

The alteration of the name from Natuna (D-Alpha) to East Natuna had something to do with the expiry of the old contract and because the geographical location of the field was in the eastern part of the Natuna islands, according to Evita Legowo, director general of oil and gas affairs at the Energy and Mineral Resources Ministry.

The president of Asia Pacific Middle East ExxonMobil Exploration, Mike Cousins, told the press the agreeemnt signed on Friday covered the first phase of a process to commercialize Natuna's oil and gas. He said his company would wait for the results of the next phase of negotiations with Pertamina and the government before developing Natuna to the maximum.

He said a cooperation contract on exploiting East Natuna gas with Pertamina was expected to be signed within the next six months.

Cousins said East Natuna actually had gas reserves totaling 200 trillion cubic feet but the exploitable amount would only be some 45 trillion cubic feet due to its CO2 content of up to 70 per cent.

The Indonesian government appointed Pertamina as the party to develop East Natuna in Energy and Natural Resources Minister's letter number 3588/11/MEM/2008 dated June 2, 2008 on the status of Natuna (D-Alpha) gas. Based on this letter, the state oil and gas company sought out partners to jointly develop the field.

Because it was extremeLy difficult to extract gas from the deep sea of East Natuna, the endeavor would need an investment of at least US$52 billion.

Based on studies conducted by Edinburgh-based energy consultant Wood McKenzie contracted by Pertamina, eight oil and gas multinational corporations were actually deemed suitable to become Pertamina's partner to develop East Natuna.

The eight companies were ExxonMobil Corporation, Royal Dutch Shell Plc, Total SA, Chevron Corp, StatOil, China National Petroleum Corp (CNPC), Petroliam Nasional Berhad (Petronas) and Eni SpA. CNPC eventually withdrew from the candidacy.

Source: www.ordons.com