ExxonMobile wants to sell shares in A Block: Minister

ExxonMobile wants to sell shares in A Block: Minister

Leony Aurora, The Jakarta Post, Jakarta

U.S. energy giant ExxonMobil plans to sell its shares in gas-rich
A Block in Lhokseumawe, Nanggroe Aceh Darussalam, according to
Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

The company, which holds 50 percent of participating interests
in the undeveloped block, has said it would farm out its shares
to interested parties, Purnomo said on Monday.

ConocoPhillips, which holds the other half of the concession
rights and acts as the operator of the block, was currently
studying the possibility o also selling its interests, he added.

"We need their decision as the block has to start to be
developed immediately," said Purnomo.

ExxonMobil's spokeswoman Deva Rachman said that the company's
subsidiary Mobil Block A Ltd. (MBAL) was not committed to divest.
"However, if another company sees more value than MBAL in Block
A, then MBAL will consider divestment," she said.

ConocoPhillips has reportedly stalled the block's development
because it wanted a bigger share of the gas output. If the
company does not start construction by next year, the government
will have the right to invite other investors.

The government usually gets 65 percent of gas produced in a
field. The split scheme in A Block differs as it has relatively
small gas reserves and the gas contains a high amount of sulfur,
which therefore, makes it more expensive to exploit.

PT Medco Energy International, the country's largest locally
controlled oil and gas firm, said in a separate occasion that it
would be interested in buying the rights to exploit the block.

"We will participate in the open tender," said president
director Hilmi Panigoro. "We will possibly invite a partner to
share the risk (in developing) the block," he added.

Hilmi further said that the government's offer to take 52
percent of the output while the block owner got the other 48
percent was "very attractive".

The development of the block is seen as critical to ensure the
survival of fertilizer firms in Aceh. Output from the giant gas
field Arun -- which is operated by ExxonMobil -- in the province
is in decline, forcing fertilizer plants there to slow down or
even halt production.

Aside from Medco, PT Energi Mega Persada, the country's second
largest local oil company, has also reportedly interested in
developing A Block.