ExxonMobil to farm out share in Block A<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
U.S. energy giant ExxonMobil will announce the winner of a tender
\nto farm out its 50 percent share in Block A in Nanggroe Aceh
\nDarussalam in the first quarter of next year, a government
\nofficial says.<\/p>\n
Exxon has closed the data room for companies interested in
\nbidding for the block, chairman of the Upstream Oil and Gas
\nRegulatory Agency (BP Migas) Kardaya Warnika said on Wednesday.<\/p>\n
\"The company will announce the winner at the end of the first
\nquarter of 2006,\" said Kardaya.<\/p>\n
Exxon spokesman Maman Budiman said that interested parties
\nwere invited to submit bids before Nov. 16.<\/p>\n
Also, Kardaya said that the country's largest and second
\nlargest privately controlled oil and gas company, PT Medco Energi
\nInternasional and PT Energi Mega Persada, as well as state firm
\nPT Pertamina, had submitted bids to swap concessions for the
\nother 50 percent of Block A owned by ConocoPhillips.<\/p>\n
\"ConocoPhillips wants to invest here still, so it has asked
\nfor a block swap,\" said Kardaya.<\/p>\n
Block A in Aceh is estimated to contain up to 500 billion
\ncubic feet (bcf) of gas reserves. The gas contains a high level
\nof carbon dioxide, which makes exploitation more expensive.<\/p>\n
ConocoPhillips, the block's operator, has reportedly stalled
\ndevelopment as it wants a higher share than the 48 percent offered
\nby the government.<\/p>\n
The development of the block is seen as crucial to securing supply
\nfor the province's Pupuk Iskandar Muda (PIM) fertilizer plants,
\nwhich have been shut down since early September due to lack of
\nnatural gas.<\/p>\n
PIM's president director Hidayat Nyakman said separately that
\nthe company was in negotiations to determine the price for the
\ngas.<\/p>\n
\"We will need 110 million standard cubic feet per day (mmscfd)
\nto run our two plants,\" said Nyakman in a phone interview. The
\nprice will be higher than US$3 per million British thermal unit
\n(mmBtu) but will not exceed $4.<\/p>\n
According to Nyakman, the reserves in Block A would secure
\nsupply for 11 years if the firm continued to operate two plants,
\nand 18 years if it operated only one plant.<\/p>\n
PIM used to purchase gas from Exxon, the operator of the Arun
\ngas field in Aceh, at $2.3 per mmBtu.<\/p>\n
The contract expired in July.<\/p>\n
The government tried to reschedule contracted liquefied
\nnatural gas (LNG) shipments to Asian buyers and buy LNG cargoes
\non the spot market to provide supplies for PIM, but failed.<\/p>",
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"sponsor": "Okusi Associates",
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