PT PERTAMINA, Indonesia's state oil company, plans to pick at least one partner by next month to develop the nation's biggest natural-gas area to counter dwindling energy supplies, chief executive officer Ari Soemarno said.

The company shortlisted eight suitors for 60 per cent of the Natuna D-Alpha gas field development in Indonesian waters east of Peninsular Malaysia, Soemarno said. The area was discovered in 1973 although production has been delayed because more than 70 per cent of the deposit consists of carbon dioxide, making the gas expensive to extract. "We hope we can conclude the selection of a partner some time in January," Soemarno said in an interview in Kuala Lumpur on Monday. "It has to be more than one partner. It's too big."

Indonesia, Southeast Asia's biggest oil and gas producer, is trying to entice explorers to develop gas areas including remote fields to boost production and make up for falling crude-oil output that has forced the nation to leave the Organisation of Petroleum Exporting Countries. Soemarno said it will cost at least US$10 billion (RM36.4 billion) to extract less than one per cent of Natuna's gas.

Disputes with Exxon Mobil Corp over Natuna and the Cepu oil field on Java island have delayed increasing Indonesia's energy output. The shortlist for Natuna includes "all the super majors" except BP plc, and one of the partners will own a larger stake than the other, Soemarno said.

The Natuna field is estimated to hold 46 trillion cubic feet of gas, Soemarno said. That's more than a third of Indonesia's reserves of 106 trillion cu ft at the end of 2007, according to the BP Statistical Review of World Energy report.

Pertamina has shortlisted Royal Dutch Shell plc, Exxon Mobil Corp and Total SA among the companies, LNG Intelligence reported in November. The list also includes Chevron Corp, Eni SpA, StatoilHydro ASA, China National Petroleum Corp and Petroliam Nasional Bhd, the trade daily said, citing upstream director Karen Agustiawan.

Pertamina is retaining 40 per cent of Natuna after the Indonesian government cancelled Exxon's holding of 76 per cent in the area in 2006 for failing to provide a feasibility study.

Production may include the construction of pipelines to transport the gas to land, or the building of liquefied natural gas plants including floating units, he said. "It's in the middle of nowhere," Soemarno said. The nearest landmass is 400 km away, he said. Explorers are also expected to invest in costly technology to remove and store carbon dioxide, an air pollutant, released during the extraction of natural gas.