Legislator Says 4 Firms Shortlisted for Natuna, Wants Exxon Out

The Jakarta Globe, Reva Sasitiya, February 11, 2009 

A member of the House of Representatives’ Commission VII on energy affairs claimed during a meeting on Tuesday that state oil and gas firm PT Pertamina had short-listed half of the eight potential partners for the development of the Natuna D Alpha gas block in Riau Islands Province. 

The meeting was being held to allow Pertamina’s new president director, Karen Agustiawan, to introduce herself to the energy commission. 

Commission member Tjatur Sapto Edy said that the short list included Royal Dutch Shell, Norway’s StatoilHydro, the China National Petroleum Co. and the former operator of Natuna, US-based ExxonMobil. 

He also demanded that Pertamina take a minimum stake of 51 percent in the project, and ultimately be appointed operator. 

Pertamina has been named to develop Natuna, but needs to select partners as it is incapable of doing so itself due to the huge cost involved and lack of expertise. The company has said it would be happy with a 40 percent stake in the project, with the rest being divided among a number of private-sector partners, giving Pertamina the final say in the project. 

Natuna is estimated to hold 46 trillion standard cubic feet of recoverable gas reserves and 80 trillion feet of potential reserves. 

Alvin Lie, another commission member, echoed Tjatur’s comments, adding that the block development’s should be free of intervention by third parties. 

“Pertamina should select its partners based solely on their capabilities .?.?. not because of JK’s intervention,” he said, referring to Vice President Jusuf Kalla. 

A local media report on Tuesday quoted Kalla as saying in the Netherlands that the government had short-listed five oil firms for the project: StatOil, PetroChina, Thailand’s PTT, Shell and ExxonMobile. 

Tjatur, who says he obtained his information from a source close to the Natuna negotiations, urged that ExxonMobile be excluded from Natuna. 

“We’ve learned from what Exxon did before in Natuna, and what they did in Cepu,” he said. 

After a protracted dispute with the government, ExxonMobile’s contract for Natuna definitively expired on Jan. 9. The government had repeatedly claimed prior to this that it had automatically come to an end in 2005 after the company failed to submit a feasibility study. 

“We need to give this to companies that have experience in deep-sea gas operations,” Tjatur said. 

Shell has extensive expertise in deepwater projects around the world, including the Silvertip field in the Gulf of Mexico and the Bonga project in Nigeria. Another potential Pertamina partner, StatOil also has long experience of deepwater drilling in the North Sea between Norway and Scotland, and in the Gulf of Mexico. “I would prefer StatOil being appointed a partner in Natuna, after seeing what they have done in Norway,” Tjatur said. 

Evita Legowo, the Energy Ministry’s director general of oil and gas, said on Monday that the ministry had set up a negotiating team to meet with Pertamina representatives later this week. 

Pertamina’s Karen declined to comment, saying only that she would provide a detailed, written statement to the commission in the near future. When pressed further by journalists, she said in English, “Give me a break!”