Jan 23, 2007 (Dow Jones Newswires)
A dispute was developing Monday between Indonesia and French oil giant Total SA (TOT), after the Indonesian government said it would seek to renegotiate the terms of its contract for the Mahakam oil and gas block off the coast of Borneo, the Financial Times reported on its Web site.
The conflict began as Total chief executive, Thierry Desmarest, announced his company will invest an extra $6 billion in the block over the next five years after meeting with Indonesian President Susilo Bambang Yudhoyono in Jakarta.
Indonesia's energy minister, Purnomo Yusgiantoro, said he had told officials to prepare to negotiate for better terms for his country when the Mahakam block contract expired in 2017, FT reported.
"We will evaluate the development of Mahakam block. We will see what is the best for Indonesia if we extend it, including the split and participating interest," Yusgiantoro said.
Total said it saw no reason to change anything. Total Indonesia spokesman Ananda Idris said 92% of the gas was exported. "In our view there's no reason to change this," he said. "When we take on an investment we want at least a return on our investment."
Copyright (c) 2007 Dow Jones & Company, Inc.
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