Exxon gets green light to extend Natuna oil contract

Jakarta (ANTARA News) - The government has given a green light to ExxonMobil to extend its oil exploitation contract over the Natuna D Alhpa oil Block in Natuna’s offshore, Riau Islands.

Head of Up Stream Oil and Gas Regulating Body (Bp Migas), Kardaya Warnika, said here on Monday that the government had asked ExxonMobil to officially submit a request for new contract.

"We have asked ExxonMobil to submit a better contract term and conditions than the one signed in 1990 so that it could continue its exploitation of the oil block field," Kardaya said.

He said that the government was of the opinion that the old contract did not hold advantage for the government anymore.

“Negotiations have been held but ExxonMobil has not offered a new concrete contract term and conditions,” he added.

Kardaya said the government would offer the opportunity to the other party if ExxonMobil did not make a new proposal until a specified time.

The government he said needed to develop the oil field which was previously exploited by the United States company.

Previously, Director General for Oil and Gas of the Ministry of Energy and Mineral Resources, Luluk Sumiarso said that the government had ended the ExxonMobil contract over the Natuna oil block.

After the official contract was terminated and the status of the oil block had become open again, the government would take a first step to offer the oil exploration to state-owned oil company Pertamina.

If Pertamina refused the offer, the government would open the second option for oil block through an open tender.

The last option is to offer the project directly.

Pertamina has confirmed its interest to take over the oil block exploitation, according to its President Director Ari Soemarno.

He said his company was ready to take over at least 50 percent of the shares in the exploitation of the oil field.