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Exxon, Pertamina Sign Deal to Jointly Develop Natuna

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Dec. 3 (Bloomberg) -- PT Pertamina and Exxon Mobil Corp., the largest U.S. oil company, signed an agreement today to jointly develop the Natuna D-Alpha natural gas block in Indonesia, officials said.

“This is the first step for the development of Natuna,” Karen Agustiawan, president director of Pertamina, told reporters in Jakarta. “With this signing, hopefully we can immediately start the project.”

Jakarta-based Pertamina is in final talks with other potential partners and expects to sign similar deals next week, Mochamad Harun, a spokesman at the state-owned oil and gas company, said by telephone.

The decision on the partners may help Indonesia to speed up the development of the project, which had been delayed after the government canceled Exxon’s drilling rights in October 2006, saying the company failed to provide a feasibility study. Irving, Texas-based Exxon, which previously held a 76 percent stake, denied the claim.

Pertamina has shortlisted six other potential partners for the Natuna block including Chevron Corp., Total SA and Royal Dutch Shell Plc, Edy Hermantoro, a director at the Ministry of Energy and Mineral Resources, said in July. Indonesia expects gas production from Natuna, off the western coast of Borneo island, to start in 2018, Hermantoro said.

Natuna, discovered in 1973, is estimated to hold 46 trillion cubic feet of the fuel, according to estimates by Pertamina. That’s about 41 percent of the country’s reserves of 112.5 trillion cubic feet as of the end of 2009, based on the BP Statistical Review of World Energy.

To contact the reporters on this story: Bambang Djanuarto in Jakarta at bdjanuarto@bloomberg.net; Yoga Rusmana in Jakarta at yrusmana@bloomberg.net

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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