JAKARTA (XFN-ASIA) - Exxon Mobil Corp has formed a team to renegotiate with the Indonesian government its contract to manage the Natuna D-Alpha gas field, which expired last year, said Kardaya Warnika, chairman of upstream oil and gas regulator, BP Migas.
Warnika said the Exxon team is chaired by Steve Greenly. The Indonesian government team is led by Warnika himself.
He said Greenly met him this week but they have not yet started the negotiations.
He added that he expects the negotiations to last around three months.
'We are ready from all aspects to renegotiate right away. If we talk about terms and conditions, they can be quantified so the negotiations won't take too long, probably three months after we start,' he said.
Exxon had initially argued that the basic agreement allowed two contract extensions, each for a period of two years. So, when the contract expired in 2005, it still had two extensions available to it.
The Indonesian government, however, said the contract could not be extended because Exxon had failed to submit its plans to develop the block and commercialize the gas resources.
The contract was entered into in 1985. Exxon Mobil held 76 pct of Natuna D-Alpha, with the remaining interest held by state-owned PT Pertamina.
aloysius.bhui@xfn.com
© 2006 AFX News
