PT Pertamina (Pertamina) said that it anticipates the Natuna natural gas project to become operational in the next eight to nine years provided it gets government consent in 2010. The Natuna D-Alpha block holds around 222 trillion cubic feet of gas (Tcf) reserves. It will need about $40 billion for development, is the subject of a dispute between Exxon Mobil Corporation (ExxonMobil) and the Indonesian government.
In 2008, the Indonesian government said it had awarded Pertamina operating rights as it said ExxonMobil’s contract giving it a 76% share had expired in 2005. ExxonMobil said the contract is valid until 2009.
Natuna, for Indonesia, is the last jewel, Karen Agustiawan, Pertamina’s president director said.
Indonesia’s upstream oil and gas regulator, BPMigas has not issued Pertamina with an official letter granting it the legal rights to the block, Agustiawan said, adding that instead, the company has a letter from Energy Minister, Purnomo Yusgiantoro.
Agustiawan, who took over the top job at Pertamina earlier in 2009, said the company is now discussing with the government on terms and conditions for Natuna.
If we can get the partner approval and also the terms and conditions by the beginning of next year, which is 2010, then it will take about seven to eight years to bring Natuna on stream, Agustiawan said, adding: We will have more than two partners for Natuna.
Pertamina said it wants to maintain a 40% stake in the Natuna D-Alpha gas project with 60% to be shared among the partners. The company does not have the technical capabilities to expand the project nor the financing.
In 2008, Pertamina picked eight companies that could be potential partners. The companies are Petroliam Nasional Berhad (Petronas), ExxonMobil, Chevron Corporation and Total S.A, Royal Dutch Shell Plc, StatoilHydro ASA, Eni S.p.A and China National Petroleum Corporation (CNPC).
Out of the Natuna D-Alpha block’s 222 Tcf of gas reserves, around 46 Tcf are believed to be commercially recoverable.
The block is located about 1100 kilometers north of Jakarta and 200 kilometers east of the West Natuna fields. It feeds gas to Singapore and accounts for about a quarter of Indonesia’s total commercially recoverable gas reserves of 182 Tcf.