JAKARTA (RambuEnergy.com) – US major oil and gas company ExxonMobil has decided to pull out from a consortium to develop East natuna oil and gas project, an official at the Energy and Mineral Resources Ministry (ESDM) said.
The other consortium member to develop the block are Pertamina, Indonesia’s state owned energy company, and Thailand’s PTT. The three companies have conducted feasibility of the project since early 2016.
ExxonMobil initially was the concession owner to develop the block, previously known as Natuna D-Alpha in 1980. However, its contract expired in 2007, prompting the government to handover the block to Pertamina since 2008.
Director General for Oil and Gas at the Energy and Mineral Resources Ministry I Gusti Nyoman Wiratmaja said his office will summon ExxonMobil next week to seek clarification. Media reports saying that ExxonMobil pulls out on grounds that the project is not commercially viable.
Vice President of Public and Government Affairs Exxon Erwin Maryoto has said that ExxonMobil would not carry on the East Natuna project, but committed to carry on other existing projects in Indonesia.
Among major project being operated by ExxonMobil is the Cepu Block in East Java which currently produces around 200,000 barrels of oil per day, contributing around a quarter of Indonesia’s current oil production of over 800,000 bpd.
The development of East Natuna has been delayed for over twenty years due to high content of carbon-dioxide (CO2) element, around 60-70% which needs to be separated. This requires technology and high investment.
The production sharing contract (PSC) of the block was supposed to be signed late last year, but it didn’t happened. (*)
Edited by Roffie Kurniawan (email@example.com)