Pertamina seeks to farm into ExxonMobil’s oil and gas fields

PT Pertamina is hoping it will be allowed to obtain an interest in ExxonMobil’s overseas oil and gas blocks in exchange for the interest it will give to the US energy giant in the state oil and gas company’s massive gas field in the Natuna Sea.

Pertamina president director Karen Agustiawan said the upstream asset swap was one of the requirements to enable ExxonMobil to join a joint venture that will be set up by Pertamina to develop the field.

“When they [ExxonMobil] enter into our assets, we must also be able to enter into their production assets,” Karen said recently.

Pertamina and ExxonMobil signed a head of agreement on Dec. 3 to jointly explore the Natuna block. However, the percentage of interest to be given to the American oil giant is not mentioned in the agreement.

“We will see what we can get from them. If we get nothing, we will not continue with the cooperation,” said Karen, adding that Pertamina insisted that the company must hold the majority interest in the block and must be the block operator.

The East Natuna block, previously known as the Natuna D Alpha block, is estimated to have a total deposit of 500 million barrels of oil and 222 trillion cubic feet (tcf) of gas, making it the world’s largest gas deposit.

From the more than 200 trillion tcf estimated gas deposit, only 46 trillion tcf can be explored due to the site’s high carbon dioxide content.

For ExxonMobil, the recent agreement with Pertamina is its second visit into the block.

Previously, ExxonMobil held 74 percent participating interest in the block, while state-owned oil and gas company PT Pertamina owned the remaining 26 percent. However, the government revoked ExxonMobil’s rights in 2005 after the company was deemed to have failed to make sufficient progress in developing the block.

ExxonMobil can return to the block after it passes Pertamina’s selection process. Pertamina reportedly has short-listed three possible partners from eight potential partners. ExxonMobil is one of the three chosen companies. Director General of Oil and Gas Evita Herawati Legowo said Pertamina would sign more heads of agreement on the Natuna project Monday next week. She refused to mention other selected partners.

In addition to ExxonMobil, Pertamina said it would select more partners to jointly develop the East Natuna gas block.

Earlier reports said eight companies had been short-listed as potential partners for Pertamina to develop the East Natuna block. They were ExxonMobil, Statoil (Norway), Chevron (the United States), Total E&P (France), Shell (Netherlands), Petronas (Malaysia), China National Petroleum Company and ENI (Italy).