[Kabar-indonesia] Exxon Exec: Natuna Contract Not Terminated Or Expired [2 updates]

[Joyo at aol.com]

also: Exxon Exec: Close To Natuna Gas Supply Deal With Petronas

Exxon Exec: Natuna Contract Not Terminated Or Expired

JAKARTA, October 12 (Dow Jones)--A senior Exxon Mobil Corp. (XOM)
executive said Thursday the firm's development contract for the Natuna
D-Alpha gas block hasn't expired or been terminated.

"We believe the contract is still in existence," said Robert W.
Haines, Exxon Mobil's international senior advisor for Asia Pacific.

Indonesian officials have said the government has terminated Exxon
Mobil's contract to develop the Natuna D-Alpha gas block in
Indonesia's East Natuna Sea.

Corrected October 12, 2006 04:43 ET (08:43 GMT) [ 12-10-06 0813GMT ]

Exxon Mobil's International Senior Advisor for Asia Pacific is Robert W. 
Haines.

("Exxon Exec: Nathan Contract Not Terminated Or Expired", published at
0813 GMT, misstated the name and title of the executive.) [ 12-10-06
0842GMT ]

Haines was speaking to reporters on the sidelines of a press briefing
of the U.S.-Asean Business Council Inc.

His comments are a response to assertions by two senior government
officials this week that Exxon Mobil had lost its contractual rights
to develop the Natuna block.

The chairman of the official upstream oil and gas regulator BPMigas,
Kardaya Warnika, told reporters Wednesday that Exxon Mobil's Natuna
contract had "expired" in 2005. That followed Minister of Energy and
Mineral Resources Purnomo Yusgiantoro's comments Tuesday that the
government had "terminated" Exxon Mobil's Natuna contract.

Exxon Mobil has responded to those comments by insisting that it has
the contractual right to continue development until 2009 of the Natuna
block, which the firm estimates holds 46 trillion cubic feet of
recoverable natural gas reserves.

In December, Exxon Mobil Indonesia Inc.'s president and general
manager, Peter J. Coleman, told reporters that the company was
proceeding with a "four-year plan" to deliver natural gas from the
Natuna D-Alpha block to foreign buyers by 2014.

Coleman told Dow Jones Newswires Thursday that the government hadn't
yet directly informed Exxon Mobil that the Natuna contract had expired
or been terminated.

Exxon Mobil still has two years remaining on its existing Natuna
contract, he said, without elaborating.

At a separate event Thursday, Exxon Mobil reinforced its intention to
fulfill its contract to develop Natuna.

"Exxon Mobil is committed to continuing implementing the Natuna
(contract) with the objective of commencing development activities as
soon as possible," a statement issued by the company said.

"The Natuna production sharing contract obligates all parties,
including BPMigas, to conduct diligent efforts to satisfy conditions
for (Natuna's) development."

The statement said Exxon Mobil and state-owned Pertamina (PTM.YY), the
joint contractors for the Natuna block, had already spent $400 million
to "delineate and commercialize" Natuna, without elaborating.

The Natuna spat has unsettling echoes of the lengthy disagreement
between Exxon Mobil and Pertamina over a joint operating contract to
tap the massive Cepu block in East Java. That dispute became a symbol
among foreign investors and analysts of the perils of contract
enforcement in Indonesia before it was finally resolved in March.

Haines said he was confident that the current disagreement over Natuna
would be resolved, without providing any specific timetable.

"We have a dialogue going with (the government) and we'll have this
resolved like we've resolved other issues," Haines said, without
elaborating.

--------------------------------------------------------------------------

Exxon Exec:Close To Natuna Gas Supply Deal With Petronas

JAKARTA, October 12 (Dow Jones)--Exxon Mobil Corp. (XOM) is close to
sealing a deal to supply natural gas from Indonesia's Natuna D-Alpha
block to Malaysia's Petroliam Nasional Bhd. (PET.YY), or Petronas, an
Exxon executive said Thursday.

Exxon Mobil hopes to sign a gas supply memorandum of understanding
with Petronas by the end of 2006, Maman Budiman, Exxon Mobil Indonesia
Inc.'s vice president of Public affairs, told reporters.

Efforts by Dow Jones Newswires to contact a Petronas spokesman for
confirmation were unsuccessful. [ 12-10-06 1038GMT ]

Budiman said Indonesian government statements this week that Exxon
Mobil's contract to develop Natuna had expired or had been terminated
had spooked some potential buyers that Exxon Mobil is in talks with.

Exxon Mobil had "explained its position" to those firms and
negotiations continue, he said, without elaborating.

Those comments reflect how Exxon Mobil is going on the offensive to
deflect Indonesian government assertions that the U.S. firm has failed
to adequately prepare the Natuna block for development.

Exxon Mobil likely wants to highlight progress the firm has made in
sourcing potential buyers to underscore the potential damage that a
possible government decision to re-tender the Natuna production
sharing contract might inflict.

The chairman of the official upstream oil and gas regulator BPMigas,
Kardaya Warnika, told reporters Wednesday that Exxon Mobil's Natuna
contract had "expired" in 2005. That followed comments by Minister of
Energy and Mineral Resources Purnomo Yusgiantoro Tuesday that the
government had "terminated" Exxon Mobil's Natuna contract.

Exxon Mobil has responded to those comments by insisting that it has
the contractual right to continue development until 2009 of the Natuna
block, which the firm estimates holds 46 trillion cubic feet of
recoverable natural gas reserves.

The Natuna spat has unsettling echoes of the lengthy disagreement
between Exxon Mobil and state-owned Pertamina (PTM.YY) over a joint
operating contract to tap the massive Cepu block in East Java. Prior
to its resolution in March, the dispute became a symbol among foreign
investors and analysts of the perils of contract enforcement in
Indonesia.

In December, Exxon Mobil Indonesia Inc.'s president and general
manager, Peter J. Coleman, told reporters the company was proceeding
with a "four-year plan" to deliver natural gas from the Natuna D-Alpha
block to foreign buyers by 2014.

Coleman said Thursday that the government hadn't yet directly informed
Exxon Mobil that the Natuna contract had expired or had been
terminated and that the U.S. firm hopes to begin construction of
extraction infrastructure by 2009.

Exxon Mobil still has two years remaining on its existing Natuna
contract, he said, without elaborating.

The U.S. firm believes that a pipeline from Natuna to Thailand,
Singapore or Malaysia would be the most commercially sound option for
getting the block's reserves to market, Budiman said, without
elaborating.

------------------------------------------
Joyo Indonesia News Service
------------------------------------------