Indonesia Gave Up Hope?

Indonesia and ExxonMobil have halted negotiations on the disputed Natuna D-Alpha gas block, now controlled by the US company, an official at energy watchdog BPMIGAS said yesterday.

Talks on the offshore gas project, estimated to require investment of about $40 billion, have run into several problems, attracting the attention of foreign investors who are already wary of committing money to Southeast Asia's biggest economy because of its weak legal system, bureaucracy and corruption.

The most recent setback over Natuna has arisen because the two parties involved cannot agree on how to split the gas produced, the official said, but other unresolved issues include the length of Exxon's contract.

The Indonesian side is waiting for the government to issue new instructions before talks can resume.