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March 18, 2009

Indonesian state oil firm to pick gas block partners in a month or two
Indonesia's state-run oil firm, Pertamina, plans to decide on its technical partners for the giant Natuna D-Alpha gas block this month or the next, Reuters quoted a company official as saying Tuesday.

The Natuna block contains around 222 trillion cubic feet (tcf) of gas reserves, of which about 46 tcf are thought to be commercially recoverable.

"Hopefully this month. Maybe also in April. We would like to speed things up," Gunung Sardjono Hadi, the firm's vice-president for upstream business development, told Reuters at a conference in the Malaysian capital.

Indonesia appointed Pertamina as the operator of Natuna, but the firm does not have the capacity to develop the gas field alone, with an estimated investment of $40 billion required.

The decision will be based on the findings of an independent consultant. Last year Pertamina selected Wood Mackenzie to advise on picking partners to develop the giant gas field.

"We have some requirements in this aspect (of picking a partner), because Natuna has huge potential," Hadi said. "The partner has to have capability in carbon dioxide removal, developing offshore projects and to produce the end-product."

The Southeast Asian country in January rejected a proposal by Exxon Mobil Corp to develop the Natuna field, since it believes the contract held by the US oil major expired in 2005.

Last year, Pertamina named eight international oil and gas companies it would consider as partners, including Exxon Mobil, Chevron and France's Total. Royal Dutch Shell, Norway's StatoilHydro, Italy's Eni, Malaysia's Petronas and China National Petroleum Corp are the rest.

The block, which is about 1,100 kilometres (680 miles) north of Jakarta and 200 km east of the West Natuna fields that feed gas to Singapore, accounts for about a quarter of Indonesia's total commercially recoverable gas reserves of 182 tcf.

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