INDONESIA’S state oil and gas firm Pertamina will seek partners to develop the giant Natuna D-Alpha gas field after being appointed operator by the government, its chief executive says.

Indonesia says talks with ExxonMobil, which has controlled the block since the 1990s, have stopped on the offshore gas project, estimated to need investment of about $40 billion, due to disagreements on how to split the gas output.
Other unresolved issues with ExxonMobil on the block, estimated to hold about a quarter of Indonesia’s commercially recoverable gas reserves, included the length of the US firm’s contract.
“I have received a letter from the government that Pertamina has been appointed as operator in Natuna,” Ari Soemarno, the company’s chief, says.
“Pertamina will launch a beauty contest to select partners to develop the Natuna field,” he says, adding that several companies had shown interest in participating, including Exxon Mobil.
Indonesia says that ExxonMobil’s contract giving it a 76 per cent share has expired, whereas the energy major has said the contract is valid until 2009.
Deva Rachman, spokeswoman for ExxonMobil Indonesia, declines to comment on Pertamina being appointed operator, but said the firm remained committed to the project.
“We remain committed and we want to be a partner with Pertamina. We believe we are in a good position, because we have long term cooperation with Pertamina,” she says.
Malaysian state oil and gas firm Petronas, Royal Dutch Shell and French oil and gas firm Total SA have also expressed interest in Natuna.
“We want partners that have experience in offshore development, has also technology and financing,” Soemarno says.
The Natuna D-Alpha block has around 222 trillion cubic feet (TCF) of gas reserves, of which about 46 TCF are thought to be commercially recoverable.
The block, which is about 1,100 km (680 miles) north of Jakarta and 200 km east of the West Natuna fields that feed gas to Singapore, accounts for about a quarter of Indonesia’s total commercially recoverable gas reserves of 182 TCF.
The energy minister said last year that the price of Natuna gas, which contained around 70 per cent carbon dioxide, was still too high, making it expensive to develop and difficult to sell.
But another Pertamina official says the current high oil price has made Natuna economically viable.