Exxon Mobil still expects to manage Indonesia`s Natuna gas block

On February 19, the Indonesian government asked Pertamina to replace Exxon as manager of the Natuna block after talks to retain Exxon's contract were halted without the issue having been resolved.

Exxon Mobil holds a 76 percent interest in the block while Pertamina owns the rest.

Indonesia terminated Exxon's contract in 2006 on the grounds that Exxon had failed to begin development on the block after 20 years.

Exxon Mobil has argued that the basic agreement allowed for 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.

BP Migas, the regulator for the upstream oil and gas business in Indonesia, ceased negotiations with Exxon earlier this month after the parties failed to reach an agreement that would allow Exxon to manage the block.

Deva Rachman, spokeswoman for Exxon Mobil Oil Indonesia Inc, said Exxon recently received a letter from the Indonesian government regarding the Natuna block and it is currently evaluating the content of that letter.

Rachman declined to say what the contents of the letter were.

She said Exxon Mobil remains committed to progressing the development of the Natuna resource and maximizing its value in partnership with Pertamina and the Government of Indonesia.

"We have been in discussions with the government within the framework of the Natuna production sharing contract (PSC) and believe these are appropriate structures that would advance the project in a manner that is satisfactory to all parties."

"ExxonMobil is uniquely positioned to develop ...