Petroliam Nasional Bhd (Petronas), Malaysia’s state oil company, is seeking to drill for gas in an area in Natuna Sea after Indonesia cancelled Exxon Mobil Corp’s rights to explore for the fuel there.

Tan Sri Hassan Marican, president of Petronas, personally came to the Indonesian Energy Ministry to express interest in drilling for oil and gas in the country, including at Natuna, Energy Minister Purnomo Yusgiantoro says.
Explorers like Petronas and Thailand’s PTT have shown interest in developing the Natuna area, which holds a quarter of Indonesia’s gas reserves. The Indonesian government cancelled Exxon’s Natuna drilling rights in October 2006, saying the company failed to provide a feasibility study. Exxon denied the claim.
The ministry earlier gave state oil company PT Pertamina “three weeks” to draw up a plan to pump gas in the area before reclaiming Exxon’s drilling rights, Purnomo says. “It’s up to Pertamina now what plan it’s going to use to develop the area,” he says.
Before the contract was cancelled, Exxon had a 76 per cent share of the area, which is located off the western coast of Borneo island and was discovered in 1973. Pertamina held the remaining 24 per cent. The field is estimated to hold 46 trillion cubic feet of recoverable reserves.
The Irving, Texas-based company, granted the licence to explore the area in 1980, delayed drilling because the field contains carbon dioxide, which makes extraction costly. Indonesia wants to start production as soon as possible to boost revenue as oil output declines.
Exxon was in talks to sell the gas that it pumps from Natuna to Petronas and PTT before its drilling contract was terminated.
Indonesia, the second-smallest member of the Organisation of Petroleum Exporting Countries, wants to push the use of natural gas to cut its dependence on oil.