ExxonMobil, Indonesia's Pertamina Strike Initial Deal to Develop in South China Sea

FOXBusiness

ExxonMobil (NYSE:XOM) has inked a preliminary deal with PT Pertamina, Indonesia’s state-owned oil and gas company, to co-develop a natural gas block offshore the Asian country, according to media reports.

The two will develop what has been a long-delayed East Natuna gas project, formally called Natuna D-Alpha, located in the South China Sea.

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Pertamina CEO Karen Agustiawan told reporters that the company is still in talks with other potential partners regarding the block, according to the Wall Street Journal, though he did not release specific names.

The project has been delayed since 2006, when Indonesia’s government revoked Exxon’s rights to develop on the block after the US oil giant and government failed to reach an agreement regarding a new revenue-sharing deal.

Federal officials gave Pertamina sole rights to develop on the block in 2008.

Natuna has some 46 trillion cubic feet of natural gas, the largest reserve in Asia; however the gas has a high concentration of carbon dioxide, making the project a costly and high-tech venture.

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