PetroVietnam and Petronas are interested in buying natural gas from Natuna D- Alpha block in Riau Island amidst the incomplete negotiation between the government and ExxonMobil about the profit split.

Previously, PTT Pcl Thailand has also expressed its interest in buying gas from the block. Minister of Energy and Mineral Resources Purnomo Yusgiantoro stated the two oil companies were even ready to take some of Pertamina's share in Natuna D-Alpha block. "We have reached progress with the two oil and gas companies, but the agreement has yet been final since we still need to discuss other things, such as price," he said yesterday

According to Purnomo, the certainty about buyers was the key to complete negotiation with Exxon. In the meantime, Vice President Director of PT Pertamina Iin Arifin Takhyan revealed PetroVietnam and Petronas had informally expressed their interests. "However, we have yet talked about the price. We hope this can proceed to MoU, head of agreement (HoA), and contract," he informed Bisnis yesterday.

Three Scenarios
At a public hearing with the House Commission VII in November 2007, the Minister of Energy and Mineral Resources told the government had three scenarios to develop Natuna D Alpha. block

First, the government can make negotiation with ExxonMobil and the Head of BP Migas is appointed as the head of the negotiation team. Second, the government prepares PT Pertamina as production sharing contractor. "Since this is a negotiation between the government, in this case BP Migas, and the contractor, we have Pertamina there. However, this has yet been final," asserted Purnomo.

The third scenario is the government can directly sell gas from Natuna, which has high carbon dioxide rate, since the exploration requires huge investments and production costs. Latest data exposes gas from Natuna, which has 6% carbon dioxide rate, is sold at around US$9 per mmBTU on well head.

Source :Bisnis Indonesia