Oilfields development
Indonesia's Pertamina May Sign Natuna Contract by Aug: Official
Indonesia's state-owned oil and gas company Pertamina may sign the Natuna production sharing contract with the government by August this year, an energy ministry official said Friday.
"We are still negotiating with Pertamina on terms and conditions ... The government and Pertamina may sign the Natuna production sharing contract over June-August this year," oil and gas director general at the energy and mines ministry Evita Legowo said.
Pertamina has chosen three potential partners for the East Natuna block development -- formerly called Natuna D-Alpha -- ExxonMobil, Total and Malaysia's Petronas.
The East Natuna block was initially awarded to ExxonMobil in 1995, but the Indonesian government terminated the contract in 2006, after it failed to provide a development plan by the 2005 deadline. Pertamina became the sole owner of the block in 2008.
The Natuna gas block contains an estimated 222 Tcf of gas, but with a high carbon dioxide content of around 70%. About 46 Tcf of gas is thought to be recoverable, although the separation of carbon dioxide is technically challenging and costly.
Industry estimates have pegged the block's development costs in the range of $30 billion-$40 billion, and Pertamina said in 2009 it needed an oil price of at least $85/barrel to make the project economically viable.
Pertamina had originally expected to start development by early 2010. But the company said in 2009 that it now expects the gas from Natuna to be brought into production by 2017-2018.
